Working from Home- Do you Need to Make as much Money as you Think?
If you want to start a home based business, whether it’s building a website or anything else, a very important issue is how much money do you need to make before you can quit your full time job.
This post was precipitated by a couple of events that have happened to me recently.
The first one was a conversation that I had with a co worker.
The second one is that I recently lost my job.
I’ll start with my co worker first.
We were going to lunch one day, talking about a variety of things when the subject of paying for daycare for your children came up.
She has two kids who need to be in daycare while she, and her husband go to work. I knew daycare was rather expensive, but when she told me that she paid $240 per week I almost fell down.
We started to talk about it further, and I asked her if it was even worth it to go to work.
I mean, even at first glance, if she took home $500 per week and you subtract the $240 for child care, it’s really $260 she’s taking home per week.
She told me the main reason she worked was for the benefits. You can buy a lot of benefits for $240 per week. Oh, by the way we were on our way to buy an $8 Chicken Caesar Salad which we did at least three times a week. There’s another $24.
I think you can see where I’m going here, but I want to tell you about my situation.
Like I said ealier, I lost my job.
In my eyes this has been an extremely good thing. It has given me a chance to build this website, connect with some really great people, and learn in the last three weeks, what would have taken me months to learn.
“In my life nothing ever goes wrong” Wayne Dyer
Anyway, like I said I haven’t been going to work, but I noticed that I seemed to have more money. I live in a fairly big city so for me taking public transportation makes more sense than driving, but it still costs $6 per day.
I have also not been buying any clothes. (I’m a bit of a clothes horse), watching what I buy in the grocery store, etc
Keep in mind all the money you spend is also after tax dollars, speaking of taxes, while I’m no authority by any means, but I do know there are some benefits of having an at home business.
Here in Canada, if you use a room specifically for your business you can write off that part of your rent or mortgage, utilites, phone, and even that $8 Chicken Ceasar Salad, as long as your discussing business while eating it.
You must check the tax laws in your area. I am not a professional.
Wrapping it up here’s just some ideas I thought of just off the top of my head.
Daycare, Lunches, Clothes for work, Travel expenses, Tax benefits.
So, how much money do you really need to make to start a business from home. Just by barely scratching the surface, I have come up with quite a few. I’m definitely going to delve into this a lot further, and I think that the goal of how much to shoot for just got dramatically reduced, and more within reach.
What are some of the ways that you can think of to put owning your own business, and working from home closer to becoming a reality ?
Please leave your comments, Tweet and share.
For those of you that have already made the transition, I would love to hear your thoughts and experiences. Lets kick this around a bit.
Thanks as always,
Neil
Hi Neil,
interesting post. Yes, the “side effects” of a job can he heavy, that’s why it’s call J.O.B.
Building a business and using proper tax strategies to keep more money is one strategy of financial intelligence.
Thanks for sharing, take care
Oliver
Oliver Tausend recently posted..The Anatomy Of Quitting – Would You Like To Change Places With Another Person
Hey Oliver,
If we break it down and take a closer look at it, the goal of having to make $40K per year gets a bit smaller, and easier to achieve.
Thanks for the comment,
Neil
Hey Neil
There are many tax benefits to owning your own business.
Basically, consider everything deductible that you spend for your business, then look at specific rules.
For example, that lunch would be 50% deductible.
Your home office expenses are deductible but only from your self-employed income. If you do not have enough self-employed income you can carry it forward to future years.
Many of your other expenses can create a business loss that can be applied to your employment income.
Of course these rules are specific to Canada.
Ok, and congratulations on losing your job
Peter Fuller MBA recently posted..Attention this book will make you MONEY
Hi Peter,
Thanks for the congrats LOL.
Unfortunately I have to go back out there in a couple of weeks. Boooo !!!
I think I’m going to take a real look at what I really need to make in order to work from home.
Thanks for the information on tax benefits, hearing it from an MBA is great.
Take care,
Neil
Hey Neil
I am also a Chartered Accountant
Peter Fuller MBA recently posted..Attention this book will make you MONEY
Hey Neil,
It’s important to know that there are great benefits of owning a home-based business. But like you mentioned it is important to consult an accountant to assist you with what is tax deductible.
Chat with you later…
Josh
Josh Garcia recently posted..Why Are You Not Taking Advantage of This Marketing Tactic
Hey Josh,
Welcome,
For sure you need a professional’s advise.
When I had my last business I learned of some write offs that I never would have known about.
Just look at the list Peter came up with in seconds, that Chicken Caesar Salad is partially tax deductible.
Bon appetit
Neil
Hey Neil,
Nice assessment.
There are so many beauties with working from home. Things which would normally cost you to do at work fall off. i.e. daily visits to the vending machine, go out to lunch, etc.
That’s just a few, I know there are more. But it comes down to is you can actually make less from home and do more. Crazy I know.
Thanks for sharing this insightful post.
Jerome Ratliff
Jerome Ratliff recently posted..How to Demand the Results You Want With This One Tip
Hi Jerome,
I am definitely going to take a closer look, crunch some numbers,
and see exactly what the magic number is.
Cheers
Neil I always love post where people blend their personal experience into the message.
Sorry you lost your job but congratulations on keeping your chin up and moving forward.
Look for tax breaks for office use as well. In GA you can there are certain breaks and tax incentives for using a portion of your house as your office.
Steve Shoemaker
steve shoemaker recently posted..Strategic Branding- More Face On FaceBook
Hi Steve,
Thanks a lot.
I just thought of another possibility.
Government loans or grants may be available to you.
Take care,
Neil
Neil your blog is looking great man next step digg digg plug in and onlywire just a suggestion but you won’t regret it.
Steve
steve shoemaker recently posted..Strategic Branding- More Face On FaceBook
Hey Steve,
I’m a diggin’ LOL. I think I’ve heard mention of Onlywire before.
It’s on my today’s to do list.
Thanks
Neil
Hi Neil,
Sorry to hear that you lost your job. Good to see you exploring other opportunities.
Working from home offers many benefits summed up as: time + money = freedom.
Thanks for sharing your insights.
All the best,
Mavis Nong
Mavis Nong recently posted..How To Build Your Network Marketing Business On AutoPilot
Hey Mavis,
It’s all good, Thanks
I love your math, they didn’t teach that one in school.
Maybe it’s time to add it to the curriculum.
Neil
Hi Neil, Sorry to hear that you lost your job but personally I think you’re better off. Creating your own home business can be ideal and I think you’re off to a good start.
As you mention there are some great tax benefits to having your own home biz but also going to a job everyday can produce some costs that you don’t have by staying home.
Keep up what you’re going, your business will continue to improve as you learn.
Do you need to make a million dollars a year? No, but being happy at what you do can be worth more than that
Liz@internet home business ideas recently posted..Find Affiliates to Promote your Product – It’s Easier Than You Think
Hi Liz,
I am quite happy with being at home for the moment, for the most part.
Sometimes I do worry a bit, especially since the company that I worked for hasn’t paid me what I’m entitled to,
but I try to shake it off and concentrate on what I have control over.
Thanks for the comment
Neil
Hi Neil – the universe unfolds in mysterious ways sometimes and apparent misfortunes often lead to roads previously untraveled. Hope that’s the case with your recent job loss.
i think its amazing how quickly our lifestyle adapts to our income. double your income and you soon wonder how you ‘survived’ before – cut it in half and most won’t starve.
Good luck with your online ad-ventures
Cheers Kiaran
kiaran recently posted..Your First Steps To Branding you Inc
Hi Kiaran,
I love the way you put it. You certainly have a way with words.
Every time I read one of your blogs, it is a much needed mental workout, and pause for reflection.
Thanks
Neil
Hi Neil,
You touched on some very valid points. If you add up all the expenses you have in order to go to work is it really worth it at the end? Especially if you have children?
Great post!
Have an awesome day!
Ilka
Ilka Flood recently posted..To “DoFollow” or “NoFollow” that is the Question
Hey Ilka,
It’s a shame that some people will never see it.
We have it pounded into us from an early age that we need to get good grades in school, get a good job, buy a nice house, get a few cars etc.
The only people that I can see benefiting from this system, are the banks that you find yourself paying most of the money you earn, in interest.
Anyway, enough of the rant
You have an awesome day too Ilka.
Neil
Ideal situation would be if you could start your work from home business on a part time basis. That is what I did, and it was a lot of work, but in the end it proved to be the best move I ever made.
Most importantly, with anything that you do, you must have the PASSION and DESIRE. Without that, then it will be extremely hard to accomplish anything in life.
Think about it ….
Hi Lynn,
Welcome
I agree you don’t want to be jumping into anything, start putting your efforts toward yourself. Your job now becomes a means to that end.
The goal is no longer getting the promotion or raise at work, your energy is now redirected towards your new business.
See you soon,
Neil
Hi Neil,
I’m glad you’re seeing all the benefits, and focusing on ways to improve your quality of life, rather than letting circumstances get you down! That’s awesome.
After leaving the military I seriously considered accepting an offer as a contract Air Traffic Controller. However, I just didn’t like the idea of paying someone else to raise my kids anymore.
I’m so glad I turned it down because that has led me to where I am today, and I wouldn’t trade this for any J.O.B.
Love the post!
Susanna
Thanks for stopping by and sharing Susanna.
I think it’s important to see some real life people that are actually walking the walk, like yourself.
People can identify with the idea of working from home more, if they see a real person doing it rather than all the hype.
Take care,
Neil
What a great way to look at it, Neil.
These are the costs that most never consider when they calculate the true income. What about dry cleaning costs, gas, etc?
Ana
Ana | Traffic Generation Cafe recently posted..Best of The Web- 30 Ultimate Tips To Dramatically Reduce Blog Bounce Rate
Hey Ana,
There’s a couple more. That 800 lb gorilla just got a bit smaller.
Thanks,
Neil
It’s not my favorite time of year when I have to start going through everything to file my taxes. I think professional’s advise are pretty helpful.
I love being my own boss and the freedom of working from home!
Hey Justin, Welcome.
I used to struggle with taxes when I started my previous business. I thought that the money that accountants were asking was too much.
When I finally decided to use a professional, not only did he do a great job,
he went back and reviewed the past years that I had done and I got back some more money
Working for yourself Rocks.
See you around,
Neil
Neil,
You are 100% correct, having recently joined the unemployed masses and scrambling around online to make a buck here and a buck there I pretty much know whatcha’ mean.
I make a lot less sitting at my computer than I would if I got a ‘real job’ again. But my future options are brighter and my current ‘costs’ are low.
Spot on post.
Gene
Of course I also have some luxuries. A small but reliable paycheck (unless the government goes bankrupt) And the big one you pointed out… benefits
Gene recently posted..Learn the Secrets of Your Own Motivation
Hey Gene,
My attitude exactly.
Unfortunately I have to go back to the grind temporarily,
but am very thankful for the time off, so I could get a taste of what it’s like.
Don’t worry the government makes the money, well actually the Fed makes the money, and lends it to the government.
Take care,
Neil
Hi Neil,
Great article, I hadn’t thought about the costs of going to work in that way before – quite an eye opener.
I think the key to making an income from home a reality is to become involved with something that will start to bring in small amounts of money fairly quickly, For Example: Affiliate Marketing.
Dave recently posted..AshMax Leaders Are Created- Not Born!
Hey Dave.. Welcome.
It hadn’t occurred to me either until I was sitting at home with more money in my pocket at the end of the week.
Granted there’s none coming in
but I found it quite interesting.
Thanks for stopping by and commenting.
Neil
[...] In the last 5 weeks I have had the fantastic opportunity to see what it is like to work from home. [...]
Hey Neil I have never thought of it that way, I mean the costs of going to work. Working from home is great, however I have no children so I need socialization more and more, I talk to myself to much….LOL
Anyway great post, as far as setting benefits of working from home, I like the short commute from the coffee pot to the computer:)
Jenny recently posted..Taking Time Out to Learn – Finding a Balance
Hi Jenny,
Welcome to my humble beginnings.
I had a rough idea of how much money it would take for me to work at home on the internet, but I was judging that on the paycheck I’m getting.
If I go the opposite way, and figure out how much money I will spend then the goal of WAH becomes closer.
Good point about the socialization. Being alone drives some people to do crazy things, like get a job
Thanks for stopping by and leaving a comment.
Neil