Let’s start with the good news: I received $9,630.23 in freelancing income last month and $3.25 in publishing royalties.
Now, the less good news: I also lost a lot of investment portfolio value, like pretty much everyone else with investments. My Vanguard portfolio alone dropped by $9,371.70. (The majority of my investments are in Vanguard, but I have $5,137.87 in a HSA and $5,559.52 in a TIAA 403(b) annuity that I was told I could not roll over into Vanguard—apparently I’m locked into that investment for life, thanks TIAA.)
Which means that my current net worth looks a bit like this:
The actual number, as of this morning, is $157,631.69. That’s $5,104.46 down from last month’s $162,736.15, and YNAB tells me that my total net worth has dropped by $9,400.16 since January 1.
It’s time for another one of these, and I know I didn’t do one last month so don’t go looking for it…
In January, I earned $4,611.63 in freelance income and $0.47 in publishing royalties. Since it’s been two months since my last financial update, I’ll also report that in December I earned $11,833.09 in freelance income and $0.22 in publishing royalties.
January is often a slow month for freelancing; everyone’s ramping back up after the holidays, budgets are getting reconfigured and reshifted, and so on. In my case, I also took some time off for the Writer’s Winter Break conference (but I ended up writing and filing two freelance pieces during the conference because THAT IS HOW I WORK).
And I’ve also got something like $3,050 in outstanding invoices, and $9,000 worth of work already on the schedule for February, so… I’m not worried, financially.
Nor am I worried about the stock-market-related dip in my net worth.
So my net worth over the past three months has gone from $164,475.44 to $167,031.85 to $162,736.15 as of this morning, and I also bought a bunch of Vanguard ETFs this morning because stocks are on sale.
That said, I’m really curious what you’d like to see in these financial updates for 2020. I’d be happy to keep writing about my income and my investments, but if there’s something else you’d like to know about How I Do Money, um… tell me?
Because this monthly roundup doesn’t have to be just about various numbers in various accounts. Maybe I should also tell you the smartest thing I did with my money in the past month and, like, the least smartest.
In January, the smartest thing I did with my money was to switch my Capital One 360 Savings account earning 0.63% APY for a Capital One 360 Performance Savings account earning 1.70% APY. (For the record, Capital One should have highlighted this opportunity in my online dashboard; I should not have had to discover it when I was researching high-yield savings accounts for Lifehacker.)
The least smartest thing was… maybe… spending $13.38 on a bunch of hair clips from Amazon. They turned out to be the wrong shade, and I didn’t like the way they looked, and I keep feeling like I’m too old to wear hair clips anyway. The only thing in my hair at this point in my life should be hair, and a very small amount of smoothing product to prevent flyaways.
Happy December! It’s time for another financial update, so HERE WE GO:
In December, I received $11,024.43 in freelancing income and $2.51 in publishing royalties. My current net worth is $164,475.44, which is up $10,578.49 from last month’s $153,896.95—and, like last month, a lot of that came from stock market gains).
That said, I haven’t put any money into investments for December yet because I’m holding on some numbers from my CPA. We’re doing 2020 tax prep already, in anticipation of me owing more money than, um, anticipated.
Because I just crossed the six-figure mark in gross freelance income for the year, which—well, I’ve known that was coming for a few months, but it still feels very, very weird.
It took me seven years of full-time freelancing to build up to a six-figure income, and there is no guarantee that I’ll earn this much next year (though I’ve got my schedule blocked off through first quarter 2020 and earnings look like they’ll stay pretty level).
But if you are reading this and are, like, “I’m only making $30K as a freelancer,” I want to say keep working and this kind of career is both possible and achievable.
Though I wouldn’t have believed it was possible until I did it myself.
And I have no idea if I’ll be able to achieve the same thing next year. My gross annual freelance earnings have gone something like $20K, $40K, $60K, $80K, back down to $60K, then this year’s $100K, soooooooo… well, all any of us can do is keep working. ❤️
It’s time for another one of these, so let’s take a look at how my finances have changed over the past month:
In October, I earned $14,606 in freelance income and $9.70 in publishing royalties, giving me a new “highest freelance earning month ever.” (This is still weird. It is still very, very weird, and I am just trying to make the most of it while I can.)
The FI calculators are saying I could hit financial independence in five years and eleven months if I only count personal expenses, and eight years and four months if I want to keep running my business after I FIRE.
As always, I am taking all of this with an unhealthy amount of salt, because those calculators assume that both my income and my expenses will remain constant over the next five-to-eight years. (I do run an average of my income/expenses, so it’s not like they calculate this based on the last month alone, but still.)
Anyway, that’s the “finance” part of my career—and tomorrow I’m going to do another post on the “art” side. ❤️
Happy October! It’s time for me to do that thing I do every month, so here we go:
My current net worth is $141,535.98, up from $135,824.34 at the beginning of September. The financial calculators still suggest I’ll hit financial independence in seven years.
Total freelancing income for September was $10,274.50, plus $10.65 in publishing royalties. It looks like I’m going to be hitting $10K months on a regular basis, at least for the near term.
This still feels really weird. I keep waiting for the man whom my brain decides to envision as an old-timey British policeman to jump out from behind a corner and bop me with his billy club, which turns out to be made of cartoon rubber so I’m fine, but still prevents me from freelancing because IMPOSTER SYNDROME.
Now that I am back from FinCon, let’s take a look at how my finances changed over the past month.
(I also promised you a FinCon Cost Roundup, but that’ll come later in the week because some of those charges haven’t hit my credit cards/YNAB yet. Expect the Cost Roundup, plus a What I Learned Roundup, on Wednesday.)
This month I’m more like “let’s look at the results of my highest earning freelance month ever.”
In August, I received $12,981.94 in freelance checks and $4.14 in publishing royalties. This is due in part to a few higher-paying gigs, but it’s mostly the result of my taking on a lot of extra work this summer. I’m glad that I’m no longer working nights and weekends on extra projects, but also… wow. Huh. It used to take me three months of freelancing to earn that much.
My current net worth is $135,824.34. According to the FIRE calculators, I could be financially independent in 6 years and 7 months. (Remember, I’m not in the financial independence game to quit my job and travel the world or anything like that. I’m treating it as insurance on my future, in case the internet changes or I age out of my career or I take on responsibilities that won’t allow me to put as much time into freelancing.)
The FIRE calculators also tell me that I could be a millionaire in a decade, which… well, once again, wow, huh.
BUT ALSO! I have been on this world for long enough to know that jobs change, expenses come up, our capacity to make money increases and decreases, and so on. All we can do is earn what we can, save what we can, and do the best with what we have.
Which is why I’m trying to save as much as I can right now, while I’m earning more than I ever thought I could. ❤️
But it’s still fascinating. Like, how little control we actually have in our long-term financial health—because the Federal Reserve can just up and say “we decided to change some numbers,” and our bosses and clients can say “we decided to change our staffing structure,” and our landlords can say “we’re raising the rent” or “we’re selling the building,” and so on.
(Not that any of these items are necessarily related. Unemployment is at record lows right now, in fact—though wages have remained fairly stagnant, which is another item that’s out of many of our controls.)
On the subject of “things that are only nominally in my control,” I earned $6,822.13 in freelancing income in July and $8.58 in publishing royalties. I have $5,508 of outstanding income owed me for completed work, and I have been completing a lot of work lately, so we’ll see how August goes. It could be another $10K month, depending on when all the checks arrive.
That said, I need to start building some slack into my schedule real soon, because right now I’ve scheduled all of my overflow time away (meaning that there isn’t any time besides nights and weekends for an assignment that takes longer than anticipated), and that is an UNSUSTAINABLE FREELANCE PRACTICE. For, you know, all of you who wanted mid-career freelance advice! ❤️
I didn’t do an official financial update in June because I was on vacation, so here’s how my finances have changed since May:
My current net worth is $121,598.46, which is up $13,797.02 from the net worth of $107,801.44 recorded on May 1.
Between May 1 and today, I brought in $20,851.09 in freelancing and publishing income (only $14.51 of that came from publishing, if you’re curious).
I also spent $3,249.81 on my two-week “Disney followed by a family reunion” trip ($2,470.87 of which went towards Disney) and put $2,820 towards quarterly estimated taxes, so… yeah, the math on that net worth increase works out.
The FI calculators suggest I could reach financial independence in seven years at my current rate of earning/saving/spending, which would be… like, seriously, I’d be 44 years old. That feels both way too soon and very far away.
However, I’m also going to need to do some thinking about taxes, since my unexpected earnings increase (I thought I would earn $70K this year; now I suspect I’ll hit six figures) is going to need an associated tax optimization strategy.
This isn’t just about me underestimating my taxes, btw. If my adjusted gross income gets too high, for example, I’ll lose my health insurance subsidy and owe the government an additional $3,600.
I can combat some of the tax burden by maxing out all of my available retirement vehicles, including my SEP IRA which can absorb between 18 and 20% of my gross income (no, there isn’t a single fixed percentage i can use here; like most self-employed tax stuff, you have to do a bunch of Tax Math to get the actual number).
I can also start putting more money into tax-deductible business expenses, which is one of the reasons why I just signed up to attend FinCon this fall. (It’s also why I’d love to increase the number of guest posts I run on the site—so pitch me!)
Plus, I’ve started to put together some ad-hoc tax spreadsheets where I run the numbers on what it might be like to earn $100,000 in gross freelancing income and $5,000 in business expenses vs. $100,000 in gross freelance income and $10,000 in business expenses. If my goal is to save as much as possible while also growing my business, which combination of numbers is most likely to get me there?
This is, of course, a conversation I’ll need to have with my CPA this fall, since I’ve made assumptions about taxes before and they have been SUPER DUPER WRONG. (I wish freelance taxes were simple, or at least straightforward. Unfortunately, you get a lot of “you can’t know how much to deduct until you deduct it and then do the math and then adjust your deduction and then do the math again” scenarios, and no I am not kidding about this.)
Six days at Walt Disney World, six days in Portland, Oregon to celebrate my grandfather’s 90th birthday, and three days of post-travel recovery (resting, restocking groceries, getting over any crud I might catch along the way) at home.
I gave myself the three extra days first because I subscribe to Kelly Conaboy’s It Should Be Vacation + One Or Two Days theory — “after you return from vacation you should have a mandatory one- or two-day period to readjust before you go back to normal life” — and second because I told myself that the one thing I was going to do in 2019 was take two consecutive weeks off.*
(I have not done this in forever. My last vacation was four days long.)
I will not be posting on vacation, so here are some updates before I leave:
I went through and blocked out the rest of NEXT BOOK’s plot using the technique I showed you last week, which means I know where I’m going with the draft and all I have to do is use Jami Attenberg’s 1000 Words of Summer (write 1000 words every day between June 17 and July 1) as motivation to finish it up.
I also gave NEXT BOOK a title: A COINCIDENCE OF DOORS. I am fighting very hard against the impulse to make the cover look like a door that you open to read the book, because that is not the Trend For Covers These Days and I know I need to put a Dreaming Woman on the front. (I wonder how much it would cost to do one of those covers where it looks like a door with a cutout keyhole that you can see through and then when you open the door you can see the full-color illustration of what’s behind the keyhole. This is also not On Trend, but it would be super-cool.)
I’m also fighting very hard against the whole “what if I was able to get this book self-published this year” thing. I want this book to be THE BEST IT CAN BE, not THE FASTEST IT CAN BE. (I’m also thinking about how much money I’m willing to put towards “the best,” but that’s a discussion for another day.)
I’ll owe you a financial update while I’m on vacation, so here’s the gist: May was my highest-earning month EVER. I brought in $13,311 in freelancing income and $14.51 in publishing revenue. I also got a $1,337.74 tax refund I wasn’t expecting because it turns out I did my taxes wrong (long story, can tell you when I get back if you want, good to know the IRS keeps an eye out for your mistakes). Current net worth is $116,293.34.
However, this vacation is going to cost me roughly $4,500 in unearned freelance income (which is to say that if I weren’t going on vacation and were able to complete my usual schedule of work, I’d earn $4,500 over the next two weeks). This is in addition to the $2,200 budgeted for the Disney trip and the $1,100 budgeted for the family trip. Soooooooooo…. actually, I’m fine with this. Paid time off is great, but I’d rather be a freelancer any day of the week. (Including the vacation days.)
See you all in June! ❤️
*Yes, I did realize that Thursday to Thursday to Thursday is actually two weeks and one day. Bonus!