- At 31, Morgan Overholt quit a job she hated. She now works as a full-time freelance graphic designer earning $200,000 a year, working out of a corner office in downtown Miami.
- After sharing her initial story with Business Insider last year, Overholt said skeptics pointed out that her true income must really be lower because of her business expenses.
- In truth, she clarified, $200,000 is her annual net profit; the business grosses close to $300,000 annually.
- What follows is a glimpse into her revenue streams, her typical weekly spending habits before the coronavirus pandemic hit, and how she's constantly investing in future growth.
- Visit Business Insider's homepage for more stories.
In April 2017, I changed the course of my professional career by leaving my "normal 9-to-5" salaried job to pursue a life as a freelance graphic designer and small-business owner.
What felt like a gamble at the time paid off in a big way. In just three months, I was already pulling in an income equivalent to my then $75,000 salary. Fast forward two years, and I'm now averaging $200,000 a year and projecting steady growth.
After details of my journey were featured on Business Insider, I started to receive a few questions, from both fans and skeptics, about how that money is both earned and spent.
And so I'll give a glimpse into my revenue streams, weekly spending habits, and how I'm constantly investing in future growth.
One of the more common comments I receive from skeptics is that my income can't really be $200,000 because I obviously have business expenses that need to be paid.
The truth of the matter is the $200,000 number represents my personal net profit after business expenses. My actual business grosses close to $300,000 annually.
The majority of my income comes from two main revenue streams.
Half of my work comes from a freelance website called Upwork, and the other half comes from contracts I've procured on my own, mostly by word-of-mouth.
I also receive a small amount of rental income from the office space that I purchased at the beginning of this year. I rent extra spaces out to other like-minded small-business owners. My eventual goal is to procure enough renters to cover the entire mortgage.
So let's start out with a breakdown of my current average monthly earnings:
Graphic-design contracts on Upwork: $14,000
Other graphic-design contracts: $9,500
Office-rental income: $800
Which equates to:
Average monthly gross: $24,000
Projected annual gross: $290,000
Of course, those numbers are based on a three-month average. My monthly income tends to range between $20,000 and $30,000. While some months are lower than others, I trend steady growth.
Before we get into expenses, it's important to note the numbers below represent my total business expenses and my half of the personal expenses. I'm a married woman living in a dual-income household, but I have opted to focus only on my income and spending for this article. These numbers are also from before the coronavirus pandemic hit, to show a more accurate picture of what my spending looked like from entertainment and going out.
My average monthly business expenses:
Contractor salaries: $5,500
My salary: $16,000
Office mortgage/expenses: $2,200
Software and service subscriptions: $150
Cellphone/iPad service: $150
My average monthly personal expenses:
Taxes: $4,000
Retirement: $4,000
Savings: $2,000
Rent/utilities: $2,500
Food/entertainment: $1,200
Clothes/shopping: $300
Travel: $1000
Misc./gifts: $350
Investments: $500
Health insurance/medical: $200
I treat my taxes and retirement contributions like expenses. When you're a contractor, those items aren't withheld like they would be in a normal paycheck, so you have to budget for them. I believe in running my personal life like a business. I find that by budgeting for those things ahead of time, I'm not tempted to spend money I shouldn't.
Last year, I learned about the benefits of a simplified employee pension individual retirement account (SEP IRA), which has been a godsend when it comes to my taxes. My plan is to max out my tax-deductible contributions each year going forward to help ease that painful tax bill.
I've bought and sold three houses over the past 10 years (I move around a lot). I took a small loss on the first one (in 2008), broke even on the second, and netted a handsome profit on the third.
I'm very lucky to have been grandfathered in to a very basic, very cheap private health-insurance plan. That's usually the biggest risk to becoming independently employed. If I were to lose that plan, my premiums would jump to over $800 a month just for my share.
I don't have student-loan debt. I enrolled at a local community college (Walters State Community College) my first two years and an affordable state school (East Tennessee State University) for my bachelor's to avoid overpriced tuition. I also applied for as many scholarships as I could get my hands on.
Neither myself nor my husband own a car. We live and work in downtown Miami and walk everywhere we go. It's been quite freeing not worrying about the responsibility of car payments, insurance, and maintenance.
I also believe in constantly looking for ways to grow and diversify my income. This year, my business goals include generating enough income from my office space to cover my mortgage, launching a second company with my husband and sister (a travel website: TheSmokies.com), and starting a freelance blog.
And, of course, I have my sights set on early retirement.
My Achilles heel is food, entertainment, and travel. I'm a sucker for eating out, dine-in movies, and nice vacations. Since the coronavirus pandemic, I haven't been able to go to the movies or go on vacations, but I'll share with you what a typical week looked like for me last summer.
This week, I spent $1,479 — roughly 9% of my personal monthly income.
Monday: $177
Tuesday: $117
Wednesday: $12
Thursday: $599
Friday: $105
Saturday: $339
Sunday: $130
This week was fairly normal for a workweek. Our biggest expenses were seeing multiple movies at the dine-in theater (that food and wine tends to add up), meeting up with friends, and planning an upcoming Disney trip.
This article was originally published on Business Insider August 13, 2019.
