Do you know how well you’re doing income-wise? Many of us have no accurate idea because we don’t know how much our peers earn.
While constantly comparing yourself to others may lead to unhappiness, you should know where you stand because it dictates your strategy going forward. If you don’t know where you are today, you can’t plan your future.
One of the best ways to gauge your performance is your after-tax income. At THUT we focus on after-tax income rather than net worth since advancing net worth beyond what you will never spend is a poor use of our limited time.
We are often asked which businesses are wise investments. Different businesses require different skill sets and have a different cost to set up. Some require extensive and expensive education.
According to the latest Edmonton census, the average household income in the Edmonton area is $94,447. This is lowered by large numbers of low earning demographics but we included a sample of client neighborhoods in the table below along with the average earnings for 5 major client groups.
|Henderson Estates, Edm.||182,912||139,404||11,617|
|Oakmont, St. Albert||153,329||118,844||9,904|
|Recurring revenue, tech, online||300,000||25,000|
|Oilfield services and construction trades||180,000||15,000|
Even if you are not involved in a tech-oriented or online business, you can use strategies from those businesses like paying for traffic online, boosting facebook posts, leverage automation apps, and consider disintermediation (cut out the middlemen – source from China, or cut out the bank and learn about cryptocurrencies).
The similarities in online/tech biz, restaurants, and some construction outfits are scalable practices.
Attainable Networth in $Cdn by Age 40 (assuming self-made from a developed country)
- Coding/Engineering: $9.4 million
- Oil & gas: $4.9 million
- E-commerce: $4.8 million
- Law: $4 million
- Dentist/Doctor: $3.4 million
This brings up another question, “Why Edmonton?”
Over the past 12 years, Edmonton has become regarded as being one of the most attractive places in which to live and work. Originally designed for the oil, gas and pipeline sector, SwissBooks by THUT now specializes in other sectors that focus on recurring revenue. However, we maintain a particular affinity to one of the world’s largest hydrocarbon processing region which in the last couple years has been forgotten as the reason why this is all possible for everyone.
- Alberta is a monster economy and even during a recession, Alberta’s per capita GDP exceeds $80K – on par with Switzerland’s and nearly DOUBLE the rest of Canada and Europe. It takes a million more Norwegians to generate the same money as Albertans.
- If you live in Edmonton there is money everywhere. PCL Construction generated record revenues of $8.5 billion in 2015, $9 billion in 2016 and its only getting better.
- The Swiss have a wealth-based taxation system that is easier on the average worker. While the Alberta system is supposed to be progressive – up to 48% for the highest bracket, business owners can escape these taxes with strategic planning. For example, in 2016, a well-executed strategy would have someone pay $16,000 in taxes net of Canada Child Benefits on a $260,000 income or a tax rate of 6%. This is a 10% less than what a single income family with 2 children would have to pay on a $50,000 wage.
If you don’t like your after-tax take household income, speak to your accountant. Get to work as soon as you can to improve since time is the only resource you can never get back.
SaaS businesses generate on average $150K-$200K revenue per employee (it can be as low as $100k of revenue per employee or as high as $300K per employee).