YouTuber Making $250,000 A Year Explains How He Went Broke

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Can you make a lot of money on YouTube?

Once again, it depends.

Many people think there’s a direct correlation between YouTube fame and financial fortune.

But that’s simplistic and reductive thinking at best.

Related: How Much Money Can You Make On YouTube With 1 Million Subscribers?

In reality, YouTube is a platform where you get out of it what you put into it.

While there are plenty of YouTubers out there comfortably earning a handsome living from the platform, it’s not always sunshine and rainbows.

Being a full-time content creator is hard work. Like all self-employment and business ownership, being a YouTuber requires a constant effort. You’re not only tasked with building a following on the platform, but also leveraging that following into a valuable business asset.

The keys to YouTube success are built around how one creates high-value content for their audience and how they optimize it to make the most money from the YouTube partners program and other business avenues.

There are plenty of stories out there of people who make a lot of money from YouTube.

…but those stories are often short-term financial success, not framed around the long game of a carer.

What about the YouTubers who have been in the game for a long time?

What about the YouTubers with stories about going broke?

Andrew Hales is a YouTube personality and vlogger known for his channel LAHWF. He grew a big YouTube following during YouTube’s rowdy and somewhat unhinged golden era circa 2012-2018, mostly for prank reaction videos like “Awkward Airportand the “Demonic Possession.” In recent years, he’s pivoted away from these videos and more towards introspective vlogs and interviews with fascinating personalities, including an ex-convict, a moon-landing conspiracy theorist, a ploygot who speaks 10 languages, etc.

The channel’s name comes from “losing all hope was freedom” – a quote from the movie Fight Club.

Hales has over 2 million subscribers. He’s been earning a living from the YouTube game for a long time.

In an incredibly transparent and candid chat with his fans, Hales shared the story of recent financial woes.

The vlog is called “How I became broke.”

The YouTube party lifestyle – A cautionary tale

Culturally, YouTubers and social media influencers have become synonymous with phony financial flexes.

But Hales story is a refreshing cautionary tale of how that career path and lifestyle can lead to some poor financial decision-making, even when consistent money is coming in.

He was sinking money into a house in Los Angeles that he probably didn’t need. Meanwhile, the YouTube checks from his videos became more and more unreliable as income.

“We’ve made a lot of progress over the last six months just living cheaply,” he tells fans.

“About a year ago, I was in pretty heavy water. I think I was about $40,000 or $50,000 grand in debt. And how I got there was… I partied too much. I got lazy and less focused and didn’t upload as much. That’s the short answer. I didn’t manage my money wisely.

2018 and 2019 were big years. I think I made about $250,000 in 2018 and $200,000 in 2019. I traveled a lot. I went to Russia and Japan. Paris. All the while paying $3600 for this rent in LA. That was a big mistake there. That was just a dumb flex. Weird flex! I just threw parties. I didn’t know what I was doing.”

“I had 10 grand coming in a month for hardly doing anything. YouTube kind of just spoiled me. I guess I thought it would last forever, but it started to go down and down and down. And I was partying more and more and more. There you have it.”

Taxes and other issues

Hales also discloses how his lack of proper tax planning caught up to him. YouTubers, like all independent business owners and self-employed individuals, do not have their wages withheld via a W2 like regular employees. Instead, they’re required to report and pay taxes as businesses or self-employed individuals, which means a big tax bill to Uncle Sam.

“Another thing is taxes. I always forget to save money for taxes and then you find out you owe like $40 grand and it’s like… BOOM. So you put it on a credit card or something and that will start snowballing.”

Just being dumb. I know it’s my fault. But I’m still here.

Additionally, Hales also lays out a series of unfortunate events and bad luck. This resulted in a heavy financial hit: A bad business deal that ghosted him, unexpected car problems, medical issues with his dog.

Takeaways

Many people forget that a career on Youtube is really just a career in show business. And show business – like all business – has all kinds of boom and bust stories.

The vlog is a great watch for anyone interested in what it takes to “make it” as a full-time creator. It’s a lot of hard work! It also means not getting caught up in it all, along with living modestly below one’s means, diversifying one’s income streams, and finding ways to generate passive income.

Watch it here: 

Author
B. Carlisle

Contributing editor at Wealth Gang. An entrepreneur at heart, he's passionate about meaningful ways to leverage technology and social media for business opportunities and side hustles.

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