Stop being the victim of unpredictable income.

Speaker A00:00:00

Stop being the victim of unpredictable income.Hey, I'm Ralph Estep Jr. A licensed accountant with 30 years of experience.I'm a business expert, and I'm a working creator, just like you. I'm known as the content creators accountant. And this is what I see every single day. Creator lands a massive brand deal. Paid up front, big check.Feels like they finally made it and within 30 days. Hey, you may feel this way, too.Bought some new camera gear, upgraded your studio, maybe even hired a va, added some software subscriptions and increased your lifetime spending. Then 1, 2 rolls around and unfortunately, that sponsor pulls out. No renewal, no new pipeline, and no savings. Now they're stressed.And worse than that, they owe taxes on money that's already gone. That's not bad luck. That's a broken system. See, in my view, content creators have three income problems. Let's get right to those.Problem number one, income. Timing doesn't match real life. It just doesn't. Your rent is monthly, but your income, it's random at best, isn't it?You get paid when a sponsor closes, or maybe when YouTube pays out, when that affiliate hits the threshold, or when a client invoice finally clears. Life doesn't wait for stripe. And based on my experience, creators treat irregular income like it's stable income. It's not.It's seasonal income at best. And you've got to treat it that way. Here's problem number two. You spend money as it comes in. It's sort of that classic feast and famine cycle.You got a big month. Hey, that's big spending. You got a slow month. Crickets and panic and the psychology of it behind it. I understand when it's here, I better use it.Kind of like when I was a kid. I remember when my mom and dad would put food on my plate. If it's on the plate, I better eat it. Well, content creators feel the same way.And when you live like that, it creates expansion during those high months, but then woeful contraction during those low months. Let me give you an example. Let's say you had a $25,000 month. Now you're thinking, to me, Ralph, that's a great month.That month feels safe, doesn't it? And then you grow your lifestyle. You buy that gear, you hire that va, you add all those subscriptions, and then next month, six grand. That hurts.And all of a sudden, you find yourself in a situation of exploding stress. Now, the problem isn't the $6,000 month. A lot of people would say, well, Ralph, there's the problem.The problem is you structured your Life around that $25,000 month. Well, let's look at problem number three, and we don't want to miss this one. You're building a tax nightmare. This is what I call the silent killer.You celebrate that gross income, you spend the gross income, and then April 15th shows up. And now guess what? You owe federal tax. Maybe you owe state tax, you owe self employment tax. That's what nobody loves.And if you're not careful because you didn't put anything aside, you owe penalties. And your account balance loudly shouts sorry. The IRS doesn't agree with the sorry part. You didn't lose any money, you just misallocated it.So those are the big problems. But now you're thinking, ralph, how do I fix this? How do I really stop being a victim of unpredictable income? Well, I've got the answers.And here's five things that you've got to do right away. These are my five fixes. Here's fix number one. Separate immediately. I know this sounds like a broken record, doesn't it?You can't run this through one account. You just can't do that anymore.You've got to have an income account, a tax account, an owner pay account, and I really like a fourth account, an operating expense account. But here's the magic to it. When money comes in, it gets distributed immediately. I'm not talking about mental math.I'm not talking about, well, I better set aside over here in my mind. No, I'm talking about actually mechanically doing it.And when you do what I just proposed, this is going to remove 50% of the anxiety that you're feeling right now. So that's the first fix. Second fix, install a tax vault percentage. Now you're thinking tax vault. Oh, wow. What is he going with this one?Before you touch any income, before you even say, that's my money, 30% goes to taxes. Now I use 30%. It's based on your structure, but it goes there immediately. There's no negotiation. There's no contractual thought.It's just, this is what I do. No rep reminding yourself, well, you know, I'll do it later. You don't do it later, you do it right away. Because this protects the future you.Now you might be thinking, ralph, I don't even know where to get started with this. I don't know what percentage to even set aside if you don't know how to structure this.If you're guessing Every quarter you need help and I can help you. Go to content creators. Accountant.com Help me. I'll put that in the show notes. But again, that's content creators. Accountant.com help me.Book a call with me. Let's build this correctly because hoping April works out is not a good strategy. Let's get back to those fixes. Here's fix number three.A lot of content creators, forget about this one. You got to pay yourself on a schedule. Don't live on the deposits.Listen, when I first started doing accounting work, I lived on the deposits because I was at the bleeding edge of getting started. But you can't live like that. You've got to live on regular distributions. Kind of like getting a paycheck. Here's the thing.I tell content creators every single day, pick up frequency. Whether that's twice a month, once a month, hey, you could even do it once a week.But pay yourself based on trailing averages, not what came in last week, not what came in last month. Trailing averages of what the show is really bringing in, what your content is bringing in, not the current excitement.And listen, I know it's easy to live in that current excitement. I just landed a big contract. Everything is going great, man. Things are taking off. But that doesn't work for the long run.So you've got to live in the trailing average because you want a smooth life, don't you? You don't want to create stability artificially. You want to figure it out because that's really leading to maturity. Let's talk about fix number four.And I love this one. As a, as a money guy, this is my favorite one of them all. You got to build a three month operating buffer.See, creators think this, and I've been guilty of this too. I'll save later. But you won't, will you? So you save during the spike. When you have that $25,000 month, save during that.Your goal is to build three months of business expenses. That way, if you have that cricket month or that slow month, you have that money to go to. This isn't a time to build your lifestyle.You've got to build the business first. Because guess what? If the business survives, then you survive.But the other side of that, if the business doesn't survive, you're going to be struggling. Let's look at fix number five. You've got to stop scaling during spikes. This is huge. This is the one I see all the time.This is not the time to hire somebody. This is not the time to go lease that space. Yeah, you might get to that, but this is not the time to do it.This is not the time to expand those subscriptions, and it's certainly not the time to upgrade your lifestyle. Got to tell you, honestly, I've seen creators do that. They had a Fantastic Month on YouTube.They got this big check and they went out and created super size their lifestyle. That's a bad plan until your income proves that consistency that month in and month out. I hate to say this, but one good month, that's just noise.Six consistent months, that's a signal. 12 months, that's predictability. Because here's what I've seen most creators scale emotionally.I had a great month, I landed this contract, and that's great. I, I congratulate you. But professional content creators scale statistically.They look at the data, they have clarity, and then they make wise decisions. Here's the truth. Your income is unpredictable. That's just the normalcy that we live in as content creators. But what's optional is the stress.If you don't want stress anymore, you can break that stress.Because that stress comes from not separating your stuff, not having a reserve for the future, not having a system, and honestly, not having a tax plan. But see, unpredictable income with predictable structure that equals peace.Because in the end, you don't need more income, you just need a better architecture. Because unpredictable income without structure, you will continue to live in anxiety.But when you have unpredictable income and listen, you're going to have unpredictable income. But when you have it with structure, that creates true power. And listen, if this episode felt a little too personal for you, that's good.That means you're ready to fix it. And if you're ready to fix it right now, I want to encourage you.Go to contentcreatorsaccountant.com/help me again, that's content creators accountant.com help me and book that call. Let's stop letting your income control you, and let's build a system that protects, keeps, and grows your income.I'm Ralph Estep Jr. And I am the Content Creators Accountant, and I'll see you again next week.