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The top 1% of American income earners make around $400,000 a year, so those who rake in salaries of $1 million or more are quite rare — particularly those in their early 30s.
Business Insider tracked down one of these superhigh-earning people, Michael Coghlan, the owner and CEO of SimpleTerra, to learn how exactly he got there and how others could follow in his footsteps.
Coghlan, who’s 31 and married with four kids, said 2019 was his first year clearing the $1 million mark. The majority of his income is generated from the e-commerce store SimpleTerra, which sells alternative-living solutions such as container homes and yurts and launched earlier this year. He additionally runs a few smaller e-commerce stores that are growing in sales each month, including Rec Room Hideout, which offers game-room tables, boards, and accessories.
When it comes to finances, Coghlan takes 30% of the profits from SimpleTerra as owner compensation and funnels 70% of it back into the business. He banked $400,000 to $550,000 as his salary in 2019, leaving around $700,000 to $850,000 to continue expanding SimpleTerra.
Coghlan said a “decent chunk” of his profits went into what he called his “project” account. “I make savings accounts within my business whenever I have a new idea I want to try, and I have got this pretty big idea or project that I want to tackle in the next 12 months,” he said. “I could reach out for funding or investors, but I am trying to build up that ‘project’ account to over $1 million on its own so I won’t need any outside investment.”
Whenever Coghlan doesn’t have a big project that he’s saving for, he tries to take 50% for owner compensation and put 50% back in for the growth of the business, rather than the 30-70 split.
“While I know many companies believe growth is everything, and they pour every penny they have into growth, I think pretty darn highly of cold, hard cash in your personal bank account,” he said. “So I try to keep a solid balance of growth and payments/bonuses to myself and employees to keep everyone pushing for more.”
The path from volleyball coach to e-commerce CEO (with a few hiccups)
In his 20s, Coghlan had been happily coaching collegiate volleyball, but a change in his life situation made him rethink his career path.
“When I was 25, I ended up having my first child unexpectedly,” he said. “It wasn’t until I had my daughter that I realized the job I loved was having me leave at 6 a.m. (before she woke up) and come home around 9 p.m. (after she went to bed). It was at that moment I began to look for alternatives to coaching.”
Coghlan said this career search resulted in his “stumbling” into e-commerce, which he became interested in specifically for its flexibility. “This is going to sound cliché, but I actually chose it so I could ‘work from home’ and ‘be my own boss,'” Coghlan said. “I thought that making …read more
Source:: Business Insider