 Hey, what's up guys? Welcome to a new video. So today I'm going to be showing you exactly how much money you need to earn in order to be able to do drop shipping as your full-time income. Now, obviously the number is going to vary depending on what your current commitments are, what your expenses are. So in this video, I'm just going to base it on what the current UK average wage is, which is about £30,000 before taxes. So in the video then in this breakdown which we're going to be running through, I'm going to go through absolutely everything, including VAT, corporation taxes, dividends, etc. So by the time you've finished watching this video, you'll know exactly how much money you need to be aiming for in order to earn that amount that will allow you to do something full-time. Now, before we jump into it, I just want to very quickly mention as always in every single video, I am giving away a free one-to-one call with me. So me and you then can have a chat on a Skype call. We can go through whatever you want. So we can look at certain products, we can go through your Facebook ads, I can review your store, whatever it is completely up to you for your chance then to win that. All you simply have to do is like this video and leave a comment down below. Tune into my next video then where the winner will be announced. And with that being said, thanks for tuning in. I hope you enjoy it. And let's get straight into it. So to start the video off then, I want to start with a recommendation. And that recommendation is going to be then before you quit your job, even if things are going really well, just make sure you have at least three months living expenses saved up. Probably because when I first started drop shipping, I've covered this in previous videos, but to cut a long story short then, I quit my job four months after I started drop shipping because things were going so well. However, I made the fatal mistake of selling trending products. And the reason trending products are called trending products is because they go up and then at some point they come down. And when they started to come down, I weren't prepared for that. I didn't have other products in place. So in terms of finances, things got pretty tight, things got pretty stressful at times. So just make sure that you have that money saved up. So should anything like that happen to you, then financially you're covered and you can at least pay your bills and afford to live. And with that being said then, let's get straight into the breakdown. So as I mentioned in the intro, it's going to be based on the average UK wage, which is currently about 30 grand per year. I'm going to keep it as whole numbers just to keep it simple. And I'm going to divide that by 365 because obviously there's 365 days in the year, which brings us out at the 30 grand divided by 365 is 83 pounds to be safe. Now the reason I am divided by 365 days is because obviously drop shipping is a 24 seven business and we are making money Monday through to Sunday. So to summarize then to make 30 grand profit per year, we need to make on average 83 pound profit per day. Now I wish it was that simple. Unfortunately, we have to add taxes on to that. So when we have that total figure minus the taxes, we're still left at 83 pounds. I've based this example on being registered as a private limited company purely because when you're making these amounts of money, then I believe financially is better to do so. But don't hold me to that disclaimer. I'm not an accountant. I'm not trained in that at all. This video is purely based on my own knowledge from running private limited companies for the past three years. So corporation tax as I record this video is currently at 20%. So we need to put 20% on top of 83 pounds. So plus 20% corporation tax equals approximately, I'm going to guess 105 pounds. So if we go 105 times point eight, that minus is 20% or left at 84 pounds, which is about right to keep things simple. I'm just going to stick with that. So that leaves us now then with an increased total profit per day of 105 pounds. Hopefully you're still with me. If there's anything at all, you're not sure on make sure you leave a comment down below. I answer every single question. The idea of these videos at the end of the day to help you guys out as much as possible. So please don't leave this video not being sure on anything, anything at all. Just send me a question and I will get back to you. That being said, then back to the breakdown. So we're currently at needing 105 pounds profit per day to keep things simple. I'm going to say that on average, we make about 10 pound profit per order. So 10 pound profit per order and basing it on the average rule of 30, 30, 30. So 30% profit, 30% on product cost and 30% on marketing cost. Now that's a rough rule of thumb that I'm going to use for this video. That leaves us then with a 10 pound product cost, a 10 pound marketing cost. And this is per order. So per sale. So 10 pound marketing cost, otherwise known as a Facebook cost per purchase, add all those up then and that leaves us with a product which we're going to be selling for 30 pounds times that by 11 then and the reason being 11 is because obviously we're making 10 pound profit per order and we need to be above that 105. So if we times 10 by 10, obviously it's only going to be 100 times it by 11 and that gives us 110 pound profit per day then. So 30 pounds times 11 orders in order to reach that 105 profit per day. And that gives us a total sales. Then if I can find the equal sign so 30 pounds times 11 30 times 11 is 330 pounds per day in sales. So 330 per day in sales. So that's approximately how much money you need to be making a sales per day in order to reach that overall goal of 105 pounds profit. Now, unfortunately, again, it doesn't start there because there's another tax in which we have to take into account. And that tax is VAT. So currently, if I'm not incorrect, the VAT threshold for the UK is 85,000 pounds. What that means is that when you hit 85,000 pounds in sales in a 12 month consecutive period, you must become that registered. And what that means then is for every 10 pound you sell, you have to pay two pound in VAT. Every 100 pound you sell, you have to pay 20 pound in VAT. Basically, it's 20% of whatever you sell, you have to pay to the government in VAT. So what does this do to our daily sales then? So it's 330 pounds times by 1.2. Obviously, that will add 20% equals 330 times 1.2 equals 396 pounds. So now that number increases again. So now what we need to be aiming for is 396 pounds in sales per day. Just to give you guys a quick recap then in case I've lost you with that. Now, obviously, our overall total daily sales is 396 pounds. And if you divide that by the 11 orders, then that's going to give you a product cost selling price of about 38 pounds now. But just to give you a quick recap then, we've got 396 per day in sales per day minus the VAT, which is 20%. That takes our total down to 330 per day. Based in that 330 per day on 11 orders, each order worth about 30 pounds making 10 pound profit per order. That would give us a daily profit of 105 pounds per day minus the 20% corporation tax, which is only paid on profits leaves us with 83 pounds profit per day times that by 365. And that gives you 30 grand profit per year. So let's carry on. We're at 396 pounds in sales per day. So 396 times that by 365. And that's going to give us the overall turnover in which we need to be looking at. So 396 times 365 equals 144540. 144540 in sales per year. Now I'm just going to put it in exclamations. This is roughly, obviously, it's going to depend on so many different factors like how much you sell your products for what the profit margin is, et cetera, et cetera. But like I keep saying, this is just a rough ballpark number that if you aim for these numbers, then you're going to come out with somewhat around 30 grand profit. So that being said, then guys, 140 grand might sound like quite a lot. So what I'm going to do now is just divide this by 12, obviously, 12 months in a year. And that's going to give us then an overall of what we need to average per month. So 12,000 pounds per month or 12, 045, we'll just put the currency in there to keep it neat. So on average, then you need to be getting about 12,000 pound in sales per month to reach that overall number of 144,540 pounds per year to give yourself the best chance possible then of getting 30 grand year profit. Now that being said then, once you've made 30 grand profit and you pay yourself that, obviously there's taxes and things to come into account. Now this is where being registered as a limited company and paying yourself a dividend comes into its own because as you'll see in a second, the taxes that you pay will be significantly less if you were to earn the same amount of money but in employment. So obviously, then we're going to be paying ourselves a 30 grand dividend and we can do that then because when you pay yourself after you've paid corporation tax and you can take it as what's called a dividend, which means you get better tax breaks on them, which I'm about to illustrate. So we're going to be paying ourselves a 30 grand dividend. And because the government are so generous, you get a two grand dividend tax free allowance. So you don't pay any tax then on the first 2k, two grand dividend tax free. So that leaves us then with 28,000 in which we need to pay taxes on because 28,000 falls within the basic rate in terms of your personal tax allowance. On that 28 grand then all you do is you pay 7.5% tax. Now I just want to very quickly mention this is my personal opinion. This is currently to my knowledge what I believe to be correct. What I thoroughly recommend is before you make any kind of financial decisions that could impact your life is that you speak to a professional such as an accountant. So 28,000 at 7.5% equals let's just get the calculator back. So 28,000 times 0.925 plus 7.5% would that be 100%. So that leads you with 25,900 plus the two grand tax allowance. So that leads you with an overall wage of 27,900. So 27,900. Obviously, to work out what your monthly income would be, we'll divide this now by 12. So 27,900 divided by 12 equals my brain is all over the place at the moment 27,900 divided by 12 equals 2325. So 2325, 2325 would be your monthly wage. If we times that by 12, obviously we get 27,900. And if we just compare that against what you would be earning in employment, I'm just going to do a quick Google search, I'll put a screenshot on the screen in a second, which comes out at 24 grand. So as you can see by paying yourself be by paying yourself as a dividend through a limited company per year, you're going to come out about three to four grand better off. Now depending what your current circumstances are, you may be able to do it even more financially savvy than that. But again, like I said, I'm not an accountant. To get the best results, you'll have to speak to an accountant yourself. And that being said, guys, if you followed me through that, hopefully it makes sense. Hopefully it's given you inspiration to go on there and actually achieve this. And now is the perfect time to start your drop shipping business as well. We're in the last quarter of the year, Christmas is coming up, people are in buying moods. Now is the time to make a profit. Now is the time to make some decent sales. So if you haven't started your drop shipping business, then what are you waiting for? I've done videos covering absolutely every topic, products, Facebook ads and the store itself. So jump right in and you never know what's going to happen. It was actually three years ago to this month in which I had my first 20k plus month. And that was enough to like put enough money in the bank for me to be able to quit my job. And it was actually December in which I did trust me now is like the perfect time to do a life changing amount of sales and significantly improve your life for the better. And with that being said, guys, that is it for the video. Thank you very much for watching. I hope you enjoyed it. If you did, please do feel free to leave a like on the video. Make sure to leave a comment if you want to enter for that chance to win the one to one call with me. And that brings me on to then announcing the winner for the previous video. So here we are then on my previous video. I posted this one yesterday. I am aiming for daily videos right now. And it's three best products to drop ship and queue for 2019 October edition. So there's three really awesome products in this video. If you haven't watched it yet, please do go and check it out. Anyway, we're here to announce the winner. So I'm going to take the URL head over to the random comment picker get YouTube comments 22 unique comments. So thank you very much to everybody who entered the draw. And the winner of the previous video then is Simpsons Dutch. So thank you very much for your comment. Make sure you reach out on Instagram. We can get that call arranged. And guys, if you just want to stop trying your luck book a call right away you can do so. Make sure you check out the links in the video description below. And we can get that call arranged immediately. That means something guys. Thank you so much for tuning in. I hope you enjoyed it and see you in the next one.