How do you define “rich”?
That, of course, is a matter of opinion.
According to the IRS, the top 10% of income earners in America today make 43% of all income and pay 70% of all taxes. The top 2% of income earners pay approximately 50% of all income taxes.
According to the Tax Policy Center, if you make $107,628, you are in the top 20% of income earners. If you exceed $148,687, you are in the top 10%. If your annual income is $208,810 or more, you are in the top 5%. And if you exceed $521,411, congratulations, you are in the top 1%.
But that is income. And does your income truly signify your wealth?
It doesn’t matter how much you make if you have significantly more expenses than you do income.
So maybe we should turn to net worth. According to the Federal Reserve Survey of Consumer Finances, a net worth of $415,700 would put you in the top 20% of Americans. A net worth of $952,200 puts you into the top 10%. $1,863,800 would put you into the top 5%, and $6,816,200 would put you safely into the top 1%.
How do those numbers affect you? Did you think they would be higher than they are? Do they seem attainable to you, or are they so far off, they almost seem imaginary?
Now let’s look at photographers. According to the US Department of Labor, the National Employment Statistics for May 2012 show that to be in the top 10% of all wage earners, you would need to make $66,990. To be in the top 25%, that number would fall to $43,930.
And more importantly, studies have also shown that average salary for photographers over the past 10 years has fallen anywhere from 8 to 12 percent per year. That is attributed to improved digital technologies and the barrier to entry that has allowed huge waves of photographers to enter the field.
Will photography make you rich? Again, the definition of rich can be arguable. But when we look at solely from a physical money standpoint, the odds are not in your favor. But does that mean it’s impossible? Can photography still be a viable option for you?
Yes, and here’s how.
1. At the lowest end of the spectrum is the general photographer, making on average $19,000. The photographers that are in the upper 10% are all niched and specialized, known within their genre. Which means for you to do well in photography, pick your niche, specialize, become as good as you can within that genre, and continue to promote yourself all over the world.
2. Focus on the bottom line, not what everyone else is charging for something “similar”. If you’ve read my Pricing Your Photography, you know how important it is to start with the end in mind. What do you need from your photography to survive? How can you create packages to achieve those results?
3. What is your revenue every year for your photography business? Have you ever added everything up to truly figure out how much your business is bringing in? In some cases just looking at the numbers can give you a wake up call. Make sure you use an accounting system and look at your reports all the time. I use online Wave Accounting – it’s free – and it has a wonderful graphic dashboard that tells you your numbers as soon as you enter the program. You don’t need sophisticated programs – just something to help you keep track of where you are and where you want to be.
4. Make more than you spend. If you are defining wealth by how much you make, yet you spend more than you take in, you are losing every single year. Instead, focus in on what comes in, and how you can spend less than that to put some away. Remember, to be in the top 10%, your net worth needs only to be $952,200.
5. Never focus your mind on making money with your photography. Instead, focus in on how to build a business. If you want a Six Figure business, you have to build the structure and the systems that will allow you to attain that level of business. You’ll never make it if you hand over your digital files for whatever price you can get. You must have a business model set in place that allows you to “see” your business long before a potential customer ever walks through your door.