Learn Your Net Profit Per Hour, or You Make Less Than You Think You Do

If you_re like us and really only make $10_hour sometimes, that iPhone costs you 100 hours, or two-and-a-half weeks in the office.-2

I’m very fortunate to have built an unconventional wedding photography business. I also work a day job at a liquor store. Having run my own business for 11 years though, I’ve learned to see my regular work life as a business too. In both, there were tons of expenses that chipped away at my bottom line. The same is true for where and how you work, regardless of what job you have. Think you make your hourly wage per hour, and that’s all there is? Think again. Here’s why you make less than you think you do.

Through mostly luck, my wedding photography is a dream job. I now charge $2,995 for a typical 8-hour wedding. When I add on the extra time I put in for prep, delivery, client meetings, driving time, accounting and so on, I’m looking at about a 20-hour investment per client. I have a great second shooter, and I pay a very efficient editor to handle 90% of the post-production. Typically, the editor takes $400, my second shooter takes $400, and there’s $200 or so that goes into other expenses, like batteries, gas, or buying drinks for clients. I walk away from each wedding with about $2,000. I’ve been operating this way for years. It took a $15,000 photography diploma and $30,000 in gear to get to this point, but that’s another story. Right now, my photography business is – in my mind – very effective at turning time into cash. My net profit per hour is $100 on the books, and a little less after accounting for taxes. Read this: “Many times it’s a ‘slap in the face’ when you calculate this number for the first time. We calculated it in a Courage to be Profitable class last week, and the highest net profit per hour was $3.60. The lowest was less than $1.” What gives?

Well, those were conventional businesses with considerable overhead, taking up space 24 hours a day. I have none of that. Those business students figured out their businesses’ profitability for the first time. You should figure out your profitability too. Here are some numbers from my day job, for easy comparison. In theory, I make $14/hour at the liquor store. In reality, I don’t.

Taxes are obvious, so let’s factor that in. Every day I go to work, I burn gas. Plugging some numbers into this gas calculator meant every day I go to work and back, I lose $2. Okay, not a big deal. What about car maintenance? What about making sure I had the right clothes and shoes for work? I spent $55 on work-appropriate shoes earlier this month. What about all the times I eat out because of work? I get $8 dinners instead of frugally eating in twice a week. Getting even crazier, what about my unbilled hours? Let’s add my commuting time too. Suddenly, my true net profit per hour was closer to $10/hour, and I’m probably forgetting something. This guy ran his numbers from his “$20 an hour” job too, and found it was now “less than $10 an hour”. Read his story.

People sometimes calculate purchases by comparing it directly with their hourly wage. “Oh, I make $20/hour, so this $1,000 iPhone is worth 50 hours of my time.” Nope! If you’re like us and really only make $10/hour sometimes, that new iPhone costs you 100 hours, or two-and-a-half weeks in the office. That $9.26 beer you just bought? Yeah, that’s about an hour. Couldn’t resist seeing “Venom” in theatres with your date and springing for popcorn too? That’s three hours. A new, low-end 4K TV? That’s a 40-hour workweek. After figuring out your net profit per hour, being frugal is the only course of action that makes sense.

Never forget to include the cost of doing business.

A final note: I have $21,000 buzzing away in investments right now with a rough return of 7%, or $1,470/year. Isn’t that kinda like adding 147 hours of day job work to my bottom line? People work, what, 2,000 hours a year? Hunh.

Will you work harder, or let your money work for you?

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For an extreme sport, you could copy those business students and calculate your net profit per hour based on 24 hours instead of just when you work. If you do this, please share. We’re very curious.

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You Work For Yourself, or How To Fire Your Boss

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Depending on who you talk to, I’m either a half-retired entrepreneur or a lowly wage slave. You can read about my five sources of income and decide for yourself. Whatever you think of me though — and whether or not you think of yourself as an entrepreneur — doesn’t matter today. All you need to know is, starting today, you work for YOU. You no longer answer to a boss or clients you don’t want to. You’re now in charge of everything. Your only goal now is building the career life you’ve always wanted. Here’s how.

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I get it: It’s easy to feel trapped by a job. Remember “K”? He’s now welding long hours with a nasty 1-hour commute every day. Even at one of my workplaces, management changes are happening, and it hasn’t exactly been sunshine and rainbows. I started looking at other opportunities for the both of us. In just minutes on Craigslist, I’d found backup options. I found “K” a welding opportunity in the same city, and it had the potential to reduce his commute time by 75%! I found a job almost identical to mine on the other side of town where there’s considerably less traffic, potentially saving me time and gas! In the end, we decided to stay at our current jobs, but feeling trapped was no longer an issue. We weren’t, and we came to realize we were never really trapped in the first place. There were always options, mere minutes away and at our fingertips. I don’t know about you, but to me, that sounds like I can “fire” any job I don’t like and “hire” any job I want. If that doesn’t sound freeing or realistic to you, here’s a practical way you can get closer to making this a reality.

Losing income between jobs is a real problem. This is why virtually every personal finance writer suggests creating an emergency fund. A simple three months of income stocked away is all you need to become a boss. It automatically increases your “hiring” and “firing” abilities, and gives you more time to find the work situation you really want. You’re no longer taking the first thing that comes along so you can put KD on the table. You have the freedom to flip through job descriptions — I think of them as résumés — and “hire” what’s right for you! Build an emergency fund that covers three months of income. If you feel like you can’t climb the job ladder, there’s your first rung.

Pull this off properly and your whole worldview might change. You might realize your “boss” isn’t really the boss of you at all. They’re just a coworker. The tasks in front of you aren’t mandatory. It’s a gig you’re doing, and you get to choose if it’s worth it. Feel stuck? You’re not. You have THE ENTIRE GODDAMN INTERNET to help you find a new job to hire. Don’t like your job? FIRE IT.

I’ve always told freelancers they should make every job decision based on passion, profit, and prestige. Whatever you’re doing, do it for at least two. Start thinking of yourself as a freelancer, and think of your bank account as your business. Job hopping is the new normal anyway, so in a way, we’re all freelancers.

The truth is you’ve been your own boss all along. Are you ready to work for yourself?

Pride Was Making Me Poor

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When people ask me what I do for a living, I don’t even hesitate. “I’m a wedding photographer,” I tell them. “I’ve been doing it for 10 years!” Lately, the next question has been weirder: “So you do it full-time?”

That’s usually where my brain stalls.

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The truth is, no, I don’t do it full-time. I haven’t done it full-time since 2015, but how do I explain to people I was only shooting “30 days a year” and making ends meet, but decided to take on “three days a week” working at a liquor store too? A quick bit of napkin math then reveals an unglamorous truth: I actually work as a liquor store clerk 5x more than I do as a photographer! Though being solely a wedding photographer was enough for me to get by, I realized that a boost in income from working a regular job too allowed me to save more, attack my debt, and get out of the house more. By the numbers alone though, I’m more a liquor store clerk than I am a photographer! WHY WAS I LYING TO PEOPLE?

Well, there are two answers to that: 1) It’s a matter of marketability. In order to get more wedding bookings, I needed to present myself as a wedding photographer first. Presenting myself as a liquor store clerk isn’t gonna get me more liquor store bookings, ya dig? 2) I had a lot of pride associated with being a wedding photographer. Entrepreneurship was sexy, wage labour was not.

I was actually turning down shifts because in my mind, I was a wedding photographer first. It wasn’t until I decided to help my coworkers out during the holidays that I realized how much I was saying no to. In 2017, because there were times I’d rather be sitting at home just content with being a wedding photographer, one of my lowest liquor store paycheques was $389.14 for two weeks. My most recent paystub just arrived: If I pushed my limits a bit, two weeks could net me $1,048.01! My pride cost me over $1,300 a month.

Someone coined a word for this a while back: “egotrage”, what Mr. Groovy calls “The strategy of advancing your financial position by doing something that is ‘beneath’ your socioeconomic status.” In that article, he talks about how his ego kept him from attaining wealth at an early age. “A man of my stature–I did have an illustrious journalism degree from Long Island University, after all–didn’t wash cars.” (Sound like anyone you know?)

I’ll just admit it: I was afraid. I was afraid that working 40 hours a week doing wage labour would somehow negate everything I’d built as an entrepreneur. In reality, I’m adding to it. The extra income will allow me to buy that Profoto A1 with less financial strain on my business. My seniority at the store will allow me to increase my flexibility with time off, letting me take on new photo opportunities. Simply getting out of the house will improve my mental health and allow me to form new connections with people. It was all an obvious win, but my pride was holding me back! Well, it’s time to let that go. From now on, I’m no longer allowing “wedding photographer” to be my defining attribute to the detriment of everything else.

On the other hand, I have no idea how to introduce myself at parties now. Thoughts?

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“So, what do you do for a living?”

“Uh, I’ve got, like, five jobs. Can we please talk about something else?”

My Five Streams of Income

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According to this, “65% of self-made millionaires had three streams of income” and “29% of self-made millionaires had five or more”. Meanwhile, this article starts breaking down “7 different income streams”, but some of their recommendations are things most of us should be doing anyway, like investing. Other ones are downright odd. Do you consider your spouse’s salary as a stream of your income? I don’t. I don’t think you should either.

For this article, I’m laying out the five streams of income I actually count. If you count my index funds or the fact I’m technically a SOCAN-recognized composer who’s only earned pennies in royalties, I have more. I’m mainly counting my side hustles that actually put money in the bank though. This is how I make my money.

My main gig is I’m a wedding photographer. My smallest package is $990 (two hours) and my largest package is $4,995 (twelve hours). My secondary gig is as a liquor store clerk, making a paltry $13.50/hour. I could choose a more lucrative job, but this is pure fun for me. I could spend all day talking about wine, and I’d actually be less happy making $20/hour doing something I didn’t care about. My third gig is as a landlord. In March, I’ll be looking after two renters/roommates, and you should know this is actually more work than I thought. For now, any rent money I make is going back into renovating the property. Both bathrooms need to be redone, but this is an investment for the future. A beautiful bathroom will enable me to charge more for rent once my friends move on. My fourth gig is I write for pay now, and make $0.15/word on assignments. This is currently super fun for me! I can do this anywhere I want, and if I had an idle gig where I’m just needed as a warm body — think security guard or exam invigilator — I could be earning twice the pay for the same hours! In just one week of November, I was able to bill a startup $225 for three short blog posts. I’m looking at developing this as one of my main sources of income in the next few months. My last gig is a questionable one, but it technically counts as investing. This one deserves its own paragraph.

Early in November, I started dabbling with cryptocurrency. I now own small slices of Bitcoin, Ethereum, Litecoin, and IOTA. In just six weeks of casual trading, I’ve put in $800 and I’m somehow $500 ahead. Before you drop everything and throw your life savings into Bitcoin though, you need to understand the technology and the risks. This is why I consider my cryptocurrency investing a “gig”. I read this and this in the past month, and I stay up-to-date on trends. It’s a job. I don’t advise you getting into cryptocurrency blindly. Everyone thinks they can time the market, and people have lost their life savings believing that. I’m fully aware I could lose my entire investment at any time. If you try this, proceed with extreme caution. I know friends of friends who have lost $10,000. Know the risks. This, as a hobby, is my fifth and final gig.

You’ve heard of “fuck you money” (FU$), but I love the idea of my multiple “fuck you jobs”. Liquor store lays me off? That’s fine. I can replace a whole month of clerk income with a single wedding shoot. Roommates moving out? A little extra writing, and I’ll still make my strata payments on time. When new roommates move in, rent will actually go up because of the shiny bathrooms! If I lose my entire crypto investment? My index funds are still making profit, and I’m sure I can come up with something to make up the loss, like renting out my camera gear. I truly believe YOU CAN ALWAYS MAKE A BUCK. With full-time employment becoming less and less stable, diversifying your streams of income is just as important as diversifying your investments. It’s just the smart thing to do!

Remember: “65% of self-made millionaires had three streams of income”.

How’d you like to be part of that statistic?

Career Burnout and What To Do About It (Pt. 2)

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For the first post in this series, click here.

“A” wrote in: It was about 3 years into my second job in the engineering world so 8 year’s total. I was having trouble focusing, I was easily irritated, I wasn’t taking care of myself like I should have been (food and exercise wise). I ended up having appendicitis for over 1 year (yes crazy I know) and that only impacted my health more. It got to the point my bosses where being super understanding and letting me work when I could because they didn’t want to lose me. But I would delay deadlines, feel sicker then I actually was and make excuses not to go. I just wasnt happy and it was hurting everyone. When I finally was allowed to switch (a pay decrease of nearly half and, I now work in retail) my life improved drastically. I’m 100% happier, life is going well, I’m not looking for drama and my relationship is the best it’s ever been. My health is getting my better and I’ve lost weight!” (Editor’s note: This isn’t our artist friend, “A”. Totally different people.)

I heard lots of responses like this one. “A” here was bogged down with “Drafting, data entry and project management” and just wasn’t feeling it anymore. She didn’t include numbers, but we figure she was making decent money. If working retail gives her roughly half what she used to make and she was eight years into an engineering career, let’s pin that around $50,000. Let’s also assume she makes and lives off $25,000 now. First off, good on her for keeping expenses down enough for a career shift. Even assuming she spends everything she makes, she’s on par with how much I spend in a year. (I spend roughly $20,000/year now, but I don’t have rent. She does.) If she’s managing to save money too, she’s kicking my ass! Second, it’s awesome that she knew when to walk away. Here’s why.

This article suggests a “stressful workplace could take 33 years off your life expectancy”, but if you read the article, they’re sensationalizing a little bit. For our purposes, let’s say half that – 16.5 years. Average life expectancy in Canada is 81.24 years, so what happens when we take 16.5 years off that? Uh, it looks like people subject to a stressful workplace drop dead just before their 65th birthday. So much for that RRSP! Clearly, workplace stress will not only kill you, but it’ll also make your financial goals moot. After all, you want a long and prosperous life, right? Anyway, “A” decided to look after her health and mental wellbeing, and her life has improved dramatically. I maintain that no matter what field you choose initially, there will come a day when you may want a change. For that to become even a remote possibility, you’ll want to start saving ASAP.

This is what happens when you’re frugal and/or have savings to fall back on: increased life flexibility, and keys to the golden handcuffs.

“A” escaped.

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Everyone is going to be different, but I quit shooting weddings 2 years ago (after 15+ years) and no longer take paid photography work. I could not be happier.”

“J” used to shoot weddings with me. It’s been years since we’ve done one together, but we’ve had some wild adventures. Because of photography, we’ve ended up in car accidents, kink dungeons, and more than a few situations I can’t talk about on a PG blog. I wouldn’t trade any of those experiences for the world. That’s why I was sad when he announced he was quitting wedding photography. I thought, “Why give up?”

I was wrong, of course. He wasn’t giving up. In talking with entrepreneurs who have “burned out”, sometimes the dream jobs we craft for ourselves aren’t much different than the trappings of a day job. The only difference is we “own” our jobs, but they’re still jobs. I think of my photography career as my day job, for example. And just like any other work situation, sometimes you need to step away when your career isn’t in alignment with what you want anymore. Even I’m sometimes tempted to leave photography because regular pay at a regular job is FAR EASIER than running your own business. Entrepreneurs are a weird bunch. For every success story that lasts for decades, there are some who didn’t quite attain their ideal, yet soldier on anyway. Sometimes, we build our own prisons.

The romantic notion of creating our own work based on our passions is a great story. I love shooting weddings, but I don’t publicize the bout of depression I dealt with last year and how it set me so far back in my projects, I gave partial refunds to my customers out of my own pocket. People don’t see the months we go without work at the beginning of our careers, living off ramen and unhealthy amounts of alcohol. And yet, us entrepreneurs are proud motherfuckers great at self-promotion, shouting “LOOK AT WHAT WE BUILT”, believing that creating our own work is somehow better than what Safeway Joe does for a living. For some of us, clinging to a business we created, whether or not it meets our goals, is the only thing we know how to do, and that’s how we ACTUALLY burn out.

Some jobs are objectively better than others, but there’s a myth that self-employment is better than regular employment as long as you can pay the bills. It’s not. I say find employment wherever you feel most fulfilled and, if possible, take money out of the equation by living on less and saving as much as you can using the advice on this blog. It’s quite possible that avoiding burnout is as simple as changing gears every few years and going back to our passions only when it feels right.

You don’t “work for someone”. You work for you. Seriously, just save some cash and do whatever the fuck it is you want to do, even if that means being a barista. Climb the corporate ladder, or don’t. Start your own business, or don’t. Retire early, or don’t. As long as you do what’s right for you, you won’t burn out.

The only imperative is you save enough money to afford your own freedom.

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Continue the discussion on Facebook. I heard from dozens of people on career burnout, so give us a like and chat with us there.

Career Burnout and What To Do About It (Pt. 1)

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This article took weeks to write, and is coming to you in parts. In researching for it and wading through hundreds of reader messages, I was forced to reexamine certain assumptions I’d made about career choices and burnout. I learned lots. For the sake of keeping this post concise, I’m making “burnout” a catch-all spectrum ranging from “losing passion in a job” to “being unable to do a job because of exhaustion”. In all cases though, burnout WILL most likely happen to you, so here’s how to manage it. That’s what this post is ultimately about.

I heard from a wide variety of people on burnout. Some were entrepreneurs like me, who’d found their dream job only to realize it wasn’t all sunshine and ponies. Others went down the more practical route and chose a well-paying job over their dream job, only to regret it. Others chose very lucrative day jobs that ended up taking a major toll on their health. One respondent almost died when job stress drove his blood pressure to 240/120, and stories like that were COMMON! As we go on, I’ll be peppering my insights with reader messages. Enjoy.

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“I used to be an engineer and now I’m a train driver and hate it”, “M” wrote. “it has ended up where I have to work very anti social hours which I hate. I’m at work on Friday night until 1 am Saturday morning which is my day off. Then straight back to work at 5 am Sunday. Also I have to deal with a lot of very horrible people. Just yesterday someone literally took a shit on the train. Have to deal with drunks, fighting and I’ve even had an attempted suicide. Also I find my work very boring and unrewarding.”

I asked him how much he made.

“Minimum wage for someone over 21 in this country is £7.50 per hour before tax which is 20% at the moment”, he said. “I trained for many years as an engineer. I worked for various companies where I enjoyed the work but couldn’t find somewhere that paid enough. I was earning about £20k. I now earn £34.5k”.

Ah, fuck. Another case of The Golden Handcuffs. FYI, £20,000 is $33,000 in Canadian dollars and £34,500 is $57,000. Now, you MIGHT anticipate my response being my usual condescending arrogance, but given what I’ve learned, I’m actually NOT recommending “just live frugal and go back to engineering”. Granted, $33,000 is TOTALLY LIVABLE, but here’s the catch: I’ve now heard from people who burned out at their dream jobs too. What’s stopping that from happening to “M” if he goes back to engineering, and for less pay too?

I recommend building up some “Fuck You Money” first to afford extra flexibility. “M” is burned out now and maybe other jobs to recharge are necessary, but he needs a cash cushion to fall back on. One reader wrote in, feeling as though her job cost her her personal life, and she now longs for “a simple coffee shop job”. Fuck, do that! You know how millennials are now notorious for job-hopping? IT’S BECAUSE WE(‘RE LUCKY ENOUGH TO) SEEK SELF-ACTUALIZATION AS OUR FIRST PRIORITY. I say work where you’re at while the money’s good, save all you can, and when you have enough to fuck off and change gears ENTIRELY for a few years, do it. Life wasn’t meant to be lived doing the same thing every day for 40 years. The most interesting people I know have had 5+ jobs. No matter where you work, you’ll inevitably run into some form of burnout given enough time. When you can’t take it anymore, get out and do something new. It doesn’t even have to be a total departure from your job. Maybe scale down your hours and work on that 10-to-2 on the side.

My life story has already involved MANY career changes, and I’m only 28. I burned out when I worked in the film industry, and at one point, that was my dream job! I’d wanted to work on movies since I got my first job at a video store, and there was literally a point in time when I could walk down the aisles and go, “worked on that, worked on that, worked on that”. It was pretty goddamn cool. I rose up in the ranks, from starting as an indie film PA to working on NBC’s lighting team during the 2010 Olympics. I even became an IATSE 891 permittee. And yet, the long hours made that job unsustainable. I left a job that paid $400+ a day, five days a week, in order to work less than 30 days a year as a photographer, DRASTICALLY cutting my income. Why? I had the Fuck You Money to do it. Build up your FYM. Think of it as your Freedom Fund. It’s your freedom to work wherever, for whatever, whenever!

Now, here’s the scary thing: I -know- I’m gonna burn out with photography someday. I already kinda have, since I say no all the time now. Yet, I’m not worried. One reader mentioned that burnout doesn’t have to be permanent. You can take a few years off to do something different and go back to a career, whether you love it or not. Now, that’s an important point. Our career lives now are different than career lives in the past. Millennials have so many options now, it’d be silly if we didn’t at least explore SOME of them. My point? Here’s your TLDR:

Build up Fuck You Money. Use it to explore job opportunities you think you’d enjoy. Burnout isn’t permanent, and you can jump back into an old career anytime you want. Don’t be scared of change, and beware of golden handcuffs.

In the meantime, I’m preparing for the very real possibility I may hate photography someday, even though I love, love, LOVE it now. Crafting a Plan B as we speak.

More insights coming your way in Part 2.