How to Predict Annual Income From Freelance Work or Side Activities
Freelancers and Third Party Entrepreneurs: How Much Money Do You Want To Make This Year?
Do you have a big dream goal? Maybe the number “I Can’t Earn Less Than This Or I Won’t Pay The Rent”? Are you just trying to get the extra money that comes your way?
Carol Tice of Make a Living Writing wants freelancers to be critical of their income. First step? Find out how much money you are likely to make this year.
The formula for calculating Tice’s annual income is relatively simple: add up all the money you made in the first quarter of the year and multiply it by four.
“If you registered $ 10,000 in income in the first quarter, you’ll probably make $ 40,000 this year from writing,” explains Tice. “If you billed $ 2,000 in the first three months, you probably won’t make ten thousand in a year. It’s just a project up to $ 8,000. “
Using Carol Tice’s formula, I can expect to make $ 70,000 gross this year – that’s before taxes and business expenses. This is a little more than I have made in the last two years, and it is a good sign.
Of course, there are still nine months of the year ahead of you, and you’ll have plenty of time to work on increasing your freelance or support earnings. Carol Tice has some advice on this, so listen to her seven-minute episode of the annual revenue forecasting podcast for her suggestions.
If you’ve worked as a freelancer for a while, you can tweak this formula to count on low-income months or quarters. For example, December is often a very slow month for freelance writers, so you can multiply your first quarter income by 3.75 instead of 4 to account for that. If you are the type of freelancer who likes to take a month or two of vacation, you should consider your time off as well in your calculations.
So, freelancers and third-party entrepreneurs: how much will you make this year according to this formula? Are you satisfied with this number? Do you think this is true? Or does it make you work a little bit for the rest of 2019?