Oct 2019 Income At-A-Glance
Gross Income for Oct: $182,208
Total Expenses for Oct: $25,854
Total Net Profit for Oct: $156,354
Difference b/t Oct & Sept: +$48,646
% of net profit to overall gross revenue: 86%
Why We Publish An Income Report
This monthly income report is created for you, Fire Nation!
By documenting the struggles we encounter and the successes we celebrate as entrepreneurs every single month, we’re able to provide you with support – and a single resource – where we share what’s working, what’s not, and what’s possible.
There’s a lot of hard work that goes into learning and growing as an entrepreneur, especially when you’re just starting out. The most important part of the equation is that you’re able to pass on what you learn to others through teaching, which is what we aim to do here.
**We’ll receive a commission on the affiliate links below. If you click on my affiliate link and sign up for the products and services I trust and recommend, then I will earn a commission.
Josh Bauerle’s Monthly Tax Tip
What’s up Fire Nation, my name is Josh Bauerle. I’m a CPA and the Founder of CPA On Fire, where we specialize in working with entrepreneurs to minimize their tax liability while keeping them in line with the ever-changing tax laws.
I’ve been working with JLD & Kate at Entrepreneurs On Fire for years now, and they’ve included me in these monthly income reports with unlimited access to all their accounts so I can verify that what they report here is complete and accurate.
And because they believe in delivering an insane amount of value to you, my job doesn’t stop at the verification level; I also provide a new tax and accounting tip every month!
Josh’s Oct Tax Tip: The benefits of an S Corp
One of the things we have talked about on these income reports several times is choosing the right entity for your business. It is one of the most important tax and legal decisions you will make in your business! And for most profitable entrepreneurs, the right entity will end up being the right choice.
We have discussed the tax benefits of being an S Corp several times here (and we have plans to update those reasons in the very near future!), but the main reason an S Corp is a wise tax move for profitable small businesses is that the profits in the business are not subject to self-employment taxes like they are in a sole proprietor or partnership.
And since that self employment tax is about 15.2 percent, it is a nice chunk of savings for those who are making a decent sized profit.
But the IRS isn’t dumb, and they like to collect that tax money.
So they say that while it is true the profits in an S Corp are not subject to self employment tax, owners in an S Corp who are actively involved in the business are required to take an actual salary from the business.
And why does that matter?
Because that salary will be hit with payroll taxes, which is the exact same 15.2 percent as self employment taxes.
So if you are hit with the same 15.2 percent tax either way, what is the benefit of an S Corp, right?!
Well, you don’t have to pay yourself all of those profits as a salary.
You can take some of them out as distributions, which are not hit with the self employment tax.
Here’s an example:
You have an internet marketing business that has a $100,000 profit.
As a sole prop, you pay the 15.2 percent self employment tax on the entire profit.
But if you are an S Corp, and you pay yourself lets say a $50,000 salary, you are only hit with that 15.2 tax on the $50k salary – not the remaining $50k profits, which you can still take out as a distribution.
The simple takeaway here is to make yourself an S Corp and then pay yourself a tiny salary, right?
Unfortunately, it’s not that simple.
Remember, the IRS likes that tax money, and they say you have to take a “reasonable” salary. And what exactly is reasonable? As with most accounting questions, the answer is: it depends.
There are several factors that can determine what a reasonable salary is to pay yourself, such as your industry, your training and experience, your time working in the business, and the wages you pay to other employees in the business.
But for me there is one overriding question to ask yourself that will determine what a reasonable compensation is:
What would I have to pay someone to replace my role in the business?
So if you own the internet marketing business doing $100k a year and you are working 60 hours a week doing the day-to-day work, how much would you have to hire someone to do the same tasks you do at the same quality you do them?
The best answer you can come up with there is what you should be paying yourself.
And as with any complex tax question, I highly recommend talking with an expert to determine if an S Corp is right for you, and if so, what your salary should be.
As always, please feel free to contact me if you’d like to discuss what would be best for YOUR business. I LOVE chatting with Fire Nation!
What Went Down In Oct
France: 4 stops in 4 weeks
The month of October was filled with more travel for us as we rounded out our 3-month world adventure with stops in Paris, Annecy, Nice, and Bayeux.
France is so beautiful, and so varied in its landscapes!!
Paris greeted us with incredible food, Annecy with breathtaking views, Nice with beautiful weather, and Bayeux with some hardcore history. Each of our stops in France were completely different, and we’re excited to share some of the highlights with you here!
But before we talk about the travel side of things, let’s chat business…
As was the case during our entire 90-day trip, we stuck to our one-two hours per day of work (more or less).
This wasn’t a hard-set limit or a timed thing; it just so happened that with the massive amounts of preparation we did before leaving, that’s how much time we needed each day to stay up-to-date on our daily check-in’s.
Pretty amazing, right?! If you want to check out the details of how we prepared to ensure our work wasn’t controlling our travel, you can do so by visiting our July Income Report!
Alright, now for the highlights!
This wasn’t our first time in Paris, which meant we had pretty high expectations.
And Paris did not disappoint!
We filled our time there with beautiful street walks, jaw-dropping palace tours, strolling the Seine, and finding more amazing food than we were able to eat!
We stayed in a HomeAway right beside Rue Cler, a quaint cobblestoned pedestrian street filled with some of the best restaurants, cheese shops, wine caves, and boulangeries (that’s French for bakeries).
This was a perfect for location for all of these reasons and more! In addition, we were a short 5 minute walk from the Eiffel Tower and close to the metro, which helped us explore beyond the central area.
Aside from our first stop in Paris, we actually stayed exclusively in AirBNB’s our entire trip, and I’ll like to each of those individual places throughout this post. I’d also love to share a couple of my top AirBNB tips when it comes to searching for the best place to stay.
And, if you haven’t used AirBNB before and decide to do so, we’d love for you to use our link to sign up :)
Top AirBNB Search Tips
- Know what you want
Create a list of the things that are most important to you for your stay. Once you have a full list of everything that’s most important to you, sort it by order of priority. For example, on this trip our list of the most important things for us & their priority was:
- Noise level
- Overall look & feel of the place
Once you have this list it’s going to make the following steps so much simpler because you know exactly what you’re looking for.
- Set your criteria
Now that you know what’s most important to you, set your criteria for the type of place you want. For example, “entire place to myself”, “wifi”, set the number of bedrooms and bathrooms you’re looking for, select the dates you’ll be traveling, and so on… This will save a ton of time when it comes to eliminating places right off the bat (and prevent you from finding a place you LOVE, only to find out later in the process it’s not available during your dates).
- Look at the pictures
I don’t know about you, but what a place looks like matters to me. I want to know how it’s set up, what is actually included in the place, how much space it has, whether there are windows in the common areas, etc. So again, be sure you’re clear on what type of place you want to stay in, and make looking at the pictures one of the first things you do.
- Read the reviews
I give a lot of weight to reviews on AirBNB. What others have experienced when renting a particular unit – whether great or negative – is golden knowledge to have going into it. At the very least I look at the reviews from the past 3 months. What do people say about the host? Their checkin and checkout experience? The condition of the place? The location?
Alright, now that you have our top AirBNB search tips, let’s get back to Paris :)
Our favorite things in Paris:
- A FULL walking day around the city with Christine – we met up with her last year on our travels in Berlin!
- A visit to the Palace of Versailles
- Visiting the Rodin Museum
- Walking Montmartre, especially our audio walking tour with Rick of the Pere-Lachaise cemetery
- Exploring the Musee de l’Armee
- …and I’d be remiss to not mention our favorite restaurant, Tribeca, and our favorite pastry shop, Maison Georges Larnicol
Here’s a visual look at our fun in Paris!
This was our first visit to Annecy, and WOW: this is one of most beautiful cities I’ve ever been to! Known literally as the “Venice of the Alps”, Annecy holds a very special place in our memories from this trip.
Situated on the Swiss boarder, you’ll find yourself wandering miles of walking paths while gawking at the alps and crystal green-blue lake view that surrounds you.
This was John’s favorite stop of our entire 90-day trip, and that’s saying a lot because we visited some really amazing places!
We stayed in an AirBNB right on the edge of the Old Town and a 2 minute walk to Lake Annecy. This location was absolutely perfect, and the apartment itself was great.
Our favorite things in Annecy:
- Doing a full-day biking tour (Tour du Lac) around the entire lake (roughly 43 km)
- Exploring the quaint Old Town streets of Annecy and all their beauty
- A boat ride around the Lake to see everything from a different perspective
- The Retour de Alpages
Some fun facts about The Retour des Alpages
The Retour des Alpages is an annual festival we were very lucky to have happened upon while in Annecy; it literally translates to: back from the pastures.
It happens once a year and is a huge tradition in Annecy. It’s when the farmers go up into the mountains to bring their cows, sheep, donkeys, goats – you name it – back down to the farms for the winter. And to celebrate, they do an entire tour through the Old Town here in Annecy.
It was a pretty cool thing to see – especially because the “route” was right on the street below our window! Here’s a video montage so you can see for yourself :)
Here’s a visual look at our fun in Annecy!
Nice was a very welcome warm-weather stop after traveling in pants and layers for weeks. First thing we did when we arrived: changed into shorts and tank tops!
Our AirBNB was right on the edge of the Old Town, about a 10 minute walk to the gorgeous Mediterranean Sea.
Our favorite things in Nice:
- Hiking up Castle Hill for breathtaking views of the Old Town and Mediterranean Sea
- Roaming the daily market in the Old Town
- Our coastal hike from Cap Ferrat to the next town (closest to Nice) called Villefranche-sur-Mer
- Spending a half-day in Monaco and getting to walk through the Jardin Exotique: a garden carved into the hill in the early 1930’s that hasn’t been touched since it was created
Some fun facts about the Jardin Exotique
The entire garden is made up of succulents and cacti – many of which were brought back from Mexico in the 1860’s.
Previously planted in another garden at another location in Monaco, the succulents were relocated to the mountainside garden at the request of the Prince, Albert I.
Since, South African and African succulents and cacti have been added to the collection, bringing the total of different types of succulent and cacti species to over 1,000!!!
Here’s a visual look at our fun in Nice!
Fun fact about Bayeux: it was the first town liberated in France after D-Day, and they’re sure to show their appreciation even today for the freedom they still enjoy.
Bayeux is on the Normandy coast of France – inland a ways – and is a very small and quiet town. So small and quiet that we had trouble finding a restaurant that was open and serving meals one night! It’s the type of town where everything is closed on Sunday, and where all the locals know one another.
We stayed in an AirBNB right in the Old Town on the main street – just across from the square where they hold a weekend Sunday market.
Our favorite things in Bayeux:
- Our 3-stop Museum Pass: Bayeux Tapestry, Art History, and the Battle Museum
- Full-day tour of Mont St-Michel
- A stroll through the botanical gardens in Bayeux
- Half-day D-Day tour
Some fun facts about the Bayeux Tapestry
The Bayeux Tapestry is an embroidered cloth that’s 70 metres in length!
The tapestry tells the story of the events leading up to the Norman conquest of England. The characters: William, Duke of Normandy, and Harold, Earl of Wessex – later King of England. The story culminates with the Battle of Hastings.
The museum was set up well, with the tapestry illuminated behind glass in a dark hallway. We were led thru the 64 scenes via an audio guide that described each of them in a decent amount of detail. Very impressive.
Some fun facts about Mont St-Michel
Legend has it that Mont St-Michel was created thanks to Saint-Aubert, bishop of Avranches, who was encouraged in a dream by the Archangel Michael to build a sanctuary in his name. The bishop shrugged it off until he had the same dream 3 nights in a row, and then decided he better go ahead and make it happen so he would be guided to heaven like a good boy.
That was in 708, and in 966 a community of Benedictine Monks settled on the mount and built the first church. With a growing population, by the 11th century four crypts and a large abbey church were built to accommodate the people appropriately (essentially, the big mass you see today).
It wasn’t until the the French Revolution that the monks abandoned the abbey, and during that time it was transformed into a state prison (it has actually been likened to Alcatraz in San Francisco due to the mount being completely surrounded by quickly rising tides and quicksand). Until 1863 14,000 prisoners passed through the abbey.
Thanks to the restoration in 1874 by the Historic Monuments board, the abbey was reopened to the public that same year.
Here’s a visual look at our fun in Bayeux!
Our lessons learned & returning home
After Bayeux we made our way back to Paris by train in time for one last full day in the city before catching our flight home.
Our travels were so incredible, and while we enjoyed every minute of our time exploring new countries and meeting new friends, we were both very happy to come home.
One of my favorite things about travel is its ability to shed light on a new perspective. Every time I travel – no matter near or far – I always make it a point to focus on the beauty within the many things that make my destination different from my home.
With this practice in mind, here are some of our biggest lessons learned from our time away!
1. It is possible
I spent 28 years of my life wholeheartedly believing that it wasn’t possible to experience lifestyle freedom. I didn’t know that term existed.
But this trip – along with the many other examples in our every day lives that we CHOOSE to live – lifestyle freedom is available, and it’s waiting for you to experience it.
When I was working in Corporate America I was hard-pressed to get 1 week of time off approved so I could book a vacation – on my credit card – that I couldn’t actually even afford.
For five years I’ve been proving myself wrong – and I’ve never been so happy to be wrong about anything.
2. Practice gratitude
This morning I wrote in my Mastery Journal that I’m grateful for my blender. It allows me to whip up an incredible smoothie every morning when I’m home that only tastes great, but that I know is fueling my body with the right food.
What you’re grateful for can range massive – it might be having a lightbulb in your lamp, a hot meal, an extra blanket on your bed… practice that gratitude and actually acknowledge the many, many things you have that shouldn’t be taken for granted.
“The more you express gratitude for what you have, the more likely you will have even more to express gratitude for.” ~ Zig Ziglar
That quote is one of my favorites, and it came up over and over again during our travels. We’ll all face roadblocks in life, and in business, but it’s the perspective that shows us: despite those roadblocks, we have a lot to be grateful for.
3. Know your priority
What is most important to you right now? This very second, what is your number one priority?
During one of my mastermind calls while we were traveling it was my turn to share my 2-minute win.
We were in Krakow, Poland, so pretty early on in our travels (well, maybe about halfway through).
Before I got on the call I didn’t know what I was going to share, and when the camera turned to me, I just said exactly what I was feeling in that moment:
I’m so grateful to be on this trip, and I’m so happy to be fully present for it. I don’t feel overwhelmed, I don’t feel behind with work, I don’t feel like I should be at home taking care of things; I just feel so great being where I am, doing what I’m doing.
Now I recognize that’s a feeling that doesn’t come around often for a vast majority of people, myself included. But honestly, when I thought about WHY I felt that way – what the circumstance were and how the situation had to be for me to feel those things – it was simply because I made being present on that trip my priority.
Your priority might change day to day, and it might even change hour to hour. But it’s critical you know and are aware of what you priority is so that you can show up for it.
If you’re confusing your brain by shoveling multiple projects, to-do’s, and worries on it, then how do you ever expect to feel accomplished, or excited about what you’re working on?
Choose your priority and FOCUS.
4. What are you capable of?
This one is short and sweet: stop doing and living for what you believe other people expect or want from you. Do what YOU believe you are capable of and don’t underestimate your potential.
5. What type of business / lifestyle do you want?
Be intentional. Be intentional about everything. What life do you want to live? What type of business do you want to run? How much money do you NEED to make to turn that intention into a reality?
So many people could not answer the above with clarity and focus. Most would say: ‘more’. But when does more end?
Because I knew the type business I wanted to run, I was able to achieve my specific goals and have the lifestyle I desired.
You can too.
Start with being intentional.
Oct 2019 Income Breakdown*
Product/Service Income: $115,671
TOTAL Journal sales: 481 Journals for a total of $11,744
The Freedom Journal: Accomplish your #1 goal in 100 days!
- TheFreedomJournal.com: $155 (4 Hardcovers)
- Amazon: $3,292 (155 Freedom Journals sold!)
- Total: $3,447
The Mastery Journal: Master Productivity, Discipline and Focus in 100 days!
- TheMasteryJournal.com: $107 (2 Hardcovers & 1 Digital Packs)
- Amazon: $2,402 (109 Mastery Journals sold!)
- Total: $2,509
The Podcast Journal: Idea to Launch in 50 Days!
- ThePodcastJournal.com: $0 (0 Hardcovers & 0 Digital Pack)
- Amazon: $5,788 (210 Podcast Journals sold!)
- Total: $5,788
Podcasters’ Paradise: The #1 Podcasting community in the world!
- Recurring: $18,271 (230 monthly, 1 annual)
- New members: $8,328 (24 new members)
- Total: $26,599
Real Revenue: Turn your BIG IDEA into Real Revenue
- New members: $450 (10 new members)
The Revenue Crew: An Elite Mastermind ON FIRE!
- Currently closed to new members
Podcast Sponsorship Income: $76,660
Podcast Launch: Audiobook: $168 | eBook: $50
Free Courses that result in the above revenue:
Your Big Idea: Discover your big idea in under an hour!
Free Podcast Course: Create and launch your own podcast!
Funnel On Fire: Create a funnel that converts!
Affiliate Income: $66,537
*Affiliate links below – if you click on my affiliate link and sign up for the products and services I trust and recommend, then I will earn a commission.
Resources for Entrepreneurs: $20,128
- Audible: $117
- BlueHost: $330 Step-by-step guide and 23 WordPress tutorials included! Disclaimer: This is my affiliate link and I will receive a commission if you sign up through my link
- Click Funnels: $19,405
- Coaching referrals: $0 (email me for an introduction to a mentor for overall online business or a Podcast focused mentor!)
- ConvertKit: $58
- Disclaimer Template: $118 (legal disclaimers for your website)
- Fizzle Mastermind: $0
- Virtual Staff Finder: $100
Courses for Entrepreneurs: $43,888
- Knowledge Business Blueprint by Tony Robbins: $21,441
- Create Awesome Online Courses by DSG: $921
- Digital Course Academy by Amy Porterfield: $17,391
- ASK by Ryan Levesque: $150
- Boost Blog Traffic by Jon Morrow: $0
- Opesta by Ethan Sigmon: $495
- Closers On Fire by Dan Lok: $3,490
Resources for Podcasters: $946
- Pat Flynn’s Fusebox Podcast Player: $6
- Podcasting Press: $46
- Designrr: $0
- Tim Paige’s Make My Intro: $150
- Libsyn: $683 (Use promo code FIRE for the rest of this month & next free!)
- UDemy Podcasting Course: $61
Other Resources: $1,575
- Amazon Associates: $275
- Other: $1,300
Total Gross Income in Oct: $182,208
Business Expenses: $22,896
- Advertising: $301
- Affiliate Commissions (Paradise): $832
- Accounting: $961
- Cost of goods sold: $2,972
- Fulfillment (Shipwire): $1,482
- Design & Branding: $0
- Dues & Subscriptions: $94
- Education: $82
- Legal & Professional: $300
- Meals & Entertainment: $152
- Merchant / bank fees: $1,508
- Amazon fees: $4,958
- PayPal fees: $255
- Shopify fees: $3
- Office expenses: $151
- Community Refunds: $1,288
- Promotional: $772
- Travel: $3,142
- Virtual Assistant Fees: $3,596
- Website Fees: $47
Recurring, Subscription-based Expenses: $2,958
- Adobe Creative Cloud: $100
- Boomerang: $50 (team package)
- Bonjoro: $45
- Authorize.net: $70
- Cell Phone: $295
- Google Suite: $50
- Focus At Will: $45 (annual fee)
- Internet: $80
- eVoice: $10
- Infusionsoft CRM: $309
- Insurance: $648
- Libsyn: $223
- Chatroll: $49
- Shopify: $68
- Linktree: $6
- Sumo: $29
- TaxJar: $19
- Telestream: $43
- Taxes & Licenses: $523
- Thrive Cart: $37
- Zapier: $15
- Vimeo: $199 (annual fee)
- Xero: $30
- Zoom: $15
Total Expenses in Oct: $25,854
Payroll to John & Kate: $15,900
In our May 2014 Income Report and our June 2016 Income Report, Josh focuses on how to pay yourself as an entrepreneur. Check them out!
Wondering what we do with all of our net revenue? We share all in our April 2017 Income Report :)
Total Net Profit for Oct 2019: $156,354
Biggest Lesson Learned
The words we speak
My biggest takeaway from my one-on-one time with Tony Robbins: how powerful the words are that we speak.
If you’ve watched Tony Robbins in action, then you know he doesn’t beat around the bush. He’s there to make a huge impact, and sometimes that requires saying things that a lot of people would probably feel pretty uncomfortable saying.
The result? You get to face your deepest limiting beliefs head-on.
…And if you choose, you also get to ditch them.
Something that Tony called me out on was the number of times I used the words “scared” or “afraid” when describing what I felt was missing (based on where I’m at right now and where I want to be).
He explained in a way I’ve never considered before that boiled down to:
The words we speak become our beliefs.
I don’t expect this is the first time you’ve heard this, but do you actually hold yourself accountable to it?
It has likely become something that’s completely subconscious for you – I know that’s how it was for me. I didn’t even realize I was littering my biggest dreams and aspirations with words like “scared” and “afraid”.
You know what happens to dreams and aspirations that are littered with words like “scared” and “afraid”? You approach them from a mindset of being scared and afraid.
Now I don’t know about you, but that doesn’t sound like the way I want to approach my dreams and aspirations!
I want to approach my dreams and aspirations with excitement! With confidence! With power!
Give it a try: I encourage you to spend the next week being extra aware of the words you’re speaking. Start a tally, and ask your family and friends to help call you out when you start using negative, low-vibe words.
This is up to you – YOU get to choose how you talk to yourself, to others, and how you approach your biggest dreams and aspirations.
So remember: the words we speak become what we believe.
Alright Fire Nation, that’s a wrap!
Until next month, keep your FIRE burning!
~ Kate & John
Note: we report our income figures as accurately as possible, but in using reports from a combo of Infusionsoft & Xero to track our product and total income / expenses, they suggest the possibility of a 3 – 5% margin of error.
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