Earlier today, I posted my year-end balance sheet for 2007. This is a companion to that report. Below, I list my expenses and income for December 2007 and the entire year, as well as some numbers from prior years for comparison. The balance report lists the state of my various accounts, while the income statement shows how some of those balances changed.
As you will see from the numbers, it was an expensive month. If you click on the graphic below, you’ll get a larger version of the table to help you read the details.
Answers to Frequently Asked Questions
The report is made with Intuit Quicken and Microsoft Excel. Here’s an income and expense report Excel template.
Explanation and Details
My day job salary has held steady since receiving a raise in 2007. With no opportunity for overtime in my new job, I can’t earn more without getting another raise or finding a new job. I was willing to take my current job, knowing there was no opportunity for overtime, because it is closer to home. I’m spending less on commutation costs than I would have otherwise because of the shorter drive. That explains the decrease in my fuel expenses over the past fe years. This decrease in spending doesn’t match the decrease in salary, however.
Perhaps working overtime less has led to more focus on my side business, which has grown over the past couple of years. For those who don’t know, I run Consumerism Commentary like a business, as it generates income from advertising. Consumerism Commentary accounts for a majority of my side business income. About a year ago, the gross income from all the side business sources began to outpace the gross income from my day job at a financial institution. I wasn’t seriously considering leaving the day job to focus on the side business full time, however. It would take more than just a higher income. I am not convinced of the long-term viability of generating income from these projects, so even though I am trending twice as much from the side business than from the day job, I won’t be making any moves to quit and work for myself full time.
The dividend income is almost completely in tax-advantaged retirement accounts, so I will not owe taxes on most of that income. My retirement accounts are growing at a good speed (when the markets cooperate) and it’s nice to think that by the time I retire, I may be able to live off dividends entirely. The realized gains are also mostly in tax-advantaged accounts, but I will owe taxes on gains as a result of my employee stock purchase plan. We have opportunities to purchase company stock at a discount. I try to sell the stock as soon as allowed to reduce risk; my 401(k) contains required company stock, and my salary is dependent on the health of the company.
The miscellaneous auto expense is primarily a new GPS device. I purchased a Tomtom GO 720 for myself. This replaced my old navigation system of a suction-cup compass on my windshield and a road atlas. My girlfriend recorded her voice on the new GPS so when I program a destination, she will always be there to tell me where to drive.
The $5,000 charity expense is my contribution to my own charitable gift fund, from where the funds will be distributed to organizations I plan to support.
Everything else is fairly standard. Looking at the year-over-year trend, my expenses jumped significantly this year. The increase is due primarily to rent, which increased $7,000 this year, business expenses which also increased over $7,000 but will be deductible, tax which increased $8,000, and charity with an increase of $5,000. My entertainment expenses jumped quite a bit as well. That comes from the purchase of a guitar which I could always stand to practice more, and some “toys” like the Xbox 360. I also upgraded my living room entertainment set-up with a new HDTV, a high-definition DVD player, and a small surround sound audio receiver with speakers. I don’t expect this spending to continue; I think I’ll be set with what I have for a long time.
The final challenge for 2007 will be to deal with taxes. I should be able to avoid underpayment penalties thanks to making enough quarterly payments, but I’m going to have to grab a tax accountant. I’ll start by doing my own taxes using online software like TurboTaxOnline (which I’ve used in previous years) or TaxAct (which I used last year because it was less expensive). Once complete, I’ll meet with a tax accountant just to make sure I didn’t miss anything.
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{ 4 comments… read them below or add one }
$77 grand for the side business? Fantastic job. If the first half of 08 continues to trend that way, then you really may need to consider going full-time for yourself. Nearly $80 grand in part-time hours ( even if you’re putting in another 40 in addition to your 40 at your day job ) is insane… imagine what you could do with 100% focus.
I bought the Tom Tom 720 too and I love it!
BTW, good job on the huge net income for the year.
Amazing growth, Flexo. Congrats on your progress!
Thats amazing growth! Seeing real numbers is a great inspiration that it is possible to make money on the internet part time (though it takes patience). Keep up the great work Flexo