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Posts: 16632
Location: The desert | Slow Rollin - 11/29/2011 6:30 PM
I went on a guide outing 2 yrs ago in FL near Punta Gorda...we just stayed in kind of bay area for sea trout and smaller fish...$500 for 4 hrs and the guide had another guy waiting to go out when we got back...now that is making money. The guy maybe had a little more expensive boat - probably around $80k for the boat.
I wonder what his insurance was like? Do they charge more for ocean faring vessels?
Got to figure his gear and maintenance costs are a bit higher too. |
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| Exox addict did not say a guide would net $70,000 but rather that would be the gross revenue from a dream season. Out of that would come all the expenses, boat, motor, gas, truck, insurance for same, liability insurance and so on. If he does not purchase liability insurance, one slip by a clumsy client will cost him everything he owns. Also, because the guide is self employed he would be paying FICA to SS.
I would guess that on a gross of $70,000, you would be doing very well to net $35,000. Then from that you would need to pay health insurance. You can get a high deductible plan for $7,000 a year. He still has no life insurance, no disability insurance, dental, etc.
I am guessing those who take the $70,000 figure to be income, not gross revenue before expenses have never been self employed. |
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Posts: 1023
| MartinTD said:
The point is trying to make EA realize how ridicoulous his post was. I thought you were smarter than that PP. Don't bother responding 20 times like you always do, I'm signing off now and this will all be erased soon enough.
Come on!!!!!
Your posts are ridiculous!
That is not $70 000 profit!
And if a person works 2 jobs then they should make more than the rest of us "slackers" that only work one - kind of obvious.
Why be offended by EA's post - he wasn't being an elitist. He was just pointing out that it is not easy money. like everyone else - guides need to work for their money.
Landry |
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Posts: 16632
Location: The desert | North of 8 - 11/29/2011 6:45 PM
I am guessing those who take the $70,000 figure to be income, not gross revenue before expenses have never been self employed.
Or have any concept of how the world works! |
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Posts: 202
| Guaranteeing muskies is nearly impossible. I am lucky enough to guide on one of the only waters in the world that you actually could do such a thing on and not go broke, Lake St. Clair. This year I ran over 100 trips on St. Clair (I guided in MN 2 months this summer or it would be higher) and I was only skunked 2 times. However the reason I have not done so is two fold. First I do not want to do it change the game plan of the day when we dont have a fish by 2 pm and maybe target smaller fish just to fulfill my guarantee. Second I am worried it would look very cocky and is not worth an extra client or 2. |
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Posts: 716
| Guiding:
harder than it looks/sounds
less profitable than it seems
very rewarding when it works... |
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Norm 12 gallons a day up there? Why so much gas lake hopping in oneida? thats about 1.25 times as much as we use in Canada for a long day. Not calling you out bro, just seems like a lotta gas for around here.
Norm brings great points. Guiding fees aren't income. It isn't a 'net' paycheck. All expenses need to be subracted. Think about it. What if you police officers had to buy all your own gas, squad maintenance and donuts? What if you office rats had to buy your own ink cartridges, computers, coffee, and donuts. What if you highway line crews had to buy your own paint, orange barrels and donuts? I think the guys chartering, leaving a boat in the water all summer, running the same lures for the most part, trolled, could stand to make a bit more, but they still pay slip rentals, gas, lure costs, boat maint. and donuts. |
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Posts: 716
| Spencer has a captains license, guides full time and delivers solid results. |
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Posts: 16632
Location: The desert | Guest - 11/30/2011 5:05 AM
You have been advertising St. Clair trips for two years and did over 100 paying trips there this year? I'm calling BS. Are you licensed for that area?
This is what we call leading with your face. You shouldn't lead with your face. |
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| Seriously guides do not get rich guiding. They may be rich in what they receive from guiding in terms of relationships and doing what they love but not in money. Only those that can book the majority of the year, and usually need to be multi-species, make decent money. Others have tackle lines to help supplement the income, as well as part time/side jobs to make a go of it if they are full time guides.
To make a statement of pay for production…and you won’t be around too long at all if it is a full time job. Part time job the guide could make it as they have another job. Part timers usually don’t do it for the money.
The arguments of guides needing to charge what they do because off all the equipment, insurances, taxes, etc… just don’t hold much water. All guides are paying extra on really is the additional insurance in case something happens to a client, and advertising costs (minimal in the grand scheme of things). Beyond that any employed individual has similar expenses as a fishing guide. With one exception – I don’t get to deduct what it cost me in gas to get to work like you can as a guide. While guides have a lot of extra equipment expenses they also deduct those on taxes. In addition to that they also get price breaks from manufacturers that others don’t get. So while they may need to get one or two new rigs a year as Norm mentions to replace broken/worn ones they also get those rigs, usually, at a discounted price. Depending on the program they may get them free if on a pro-staff as long as they do particular work for the manufacturer.
Oh I also don’t get to deduct my vehicle payment on taxes like a guide does, or my boat payments. I make a payment out of my income and that’s it. No benefits in that regard to me.
So in the end while guides may need to make more payments in certain areas they also get many perks in terms of discounts and tax breaks. Average Joe mill worker don’t get those breaks. While Guides need to get their own health insurance, so does average Joe. His may be through his company, but now days unless you have a very very good company you are not getting any better insurance from a work plan than you are if you find a plan on your own.
Guiding brings certain headaches that non-guiding brings.
Non-guiding brings certain headaches that guiding brings.
Both have there perks and downfalls.
Guiding is like most other self owned business. You have to be very good at it (well known as a result) to make a decent go of it. You also usually need to be diversified (i.e. tackle business as well as guiding, and being a multi-species guide) to make a good go of it as if you aren’t you will be hurting when there is a lull in the demand of your business.
The thought that a guide will have a rougher go of it on 70K than anyone else making 70K is laughable.
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Posts: 10
| Very few accountants on this board. |
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Posts: 1036
| One good point was made. And that is the tax write offs that guides receive. They can depreciate their boat and write off all expenses. So, their $70k (assumed amount), goes a lot farther than a normal 8-5 70k job.
That being said, most guides I know have second jobs or businesses as well. They guide because they love it and are good at it, which makes jumping in their boat an enjoyable experience.
Lastly, you do have to take into account is the extreme hassle of being a guide. For every good client you have, who can cast and retreive a lure, you will have another client who can't cast, work a lure, or who has a rotten attitude. Those are some long days on the water. I've spent my fair share amount of time in the boat with "bad" clients. I actually figured out that one day I was being paid about $15 per backlash that I picked out of a reel. That is a tough way to make $300. |
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Posts: 13688
Location: minocqua, wi. | not meant to be a slight on anyone ... but, a question for anyone who knows?
the Ranger "pro-grams" used to be interest-only and then responsibility to sell it on your own before ponying up to another new one? is this still the case?? it seems i heard the program deals changed in the past couple of years. interest on a boat mortgage can be pretty cheap so you can't assess income to the value of boat being pulled down the road. the principle is at cost? so there is some remaining value that can be sold and then mark-ups for electronics etc..., still a net-cost to the "pro" i would imagine after all is said and done but not a payment that generates any equity to speak of.
bob ... as a car guy and such, what is the "deal" that comes these days? or is it different depending on dealer and particular pro? |
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Posts: 32880
Location: Rhinelander, Wisconsin | Very few memo bills left out there, sled. Those who have them are signing a contract to buy the boat, with a delayed payment. Shows up as debt on the credit report, and some lose a little money on the rig in total in order to pay it off in time. One loses a considerable discount to go with the memo bill, too. Either way, it's a debt.
Writing off mileage and expenses isn't going to spread $70K very far. A full time guide, salesman on commissions, or other self employed person will usually spend about 35 to 40% in expenses out of pocket not including the rig and tackle. Guides have to buy ALL their own insurance, pay their own SS taxes, pay a higher bracket of income tax, and take 100% of the risk.
$70 K would be top of the line gross income for most guides, as that would require 140 days at $500 a day. Most charge $375, which would require 186 days or 6 months booked solid. In order to book that many days, one needs to be established and successful, and probably travel to open seasons and waters which layers cost, and still have to find other work during the closed seasons or Ice time. Not that many opportunities in the South, so for most, that is out unless they live there and travel during the warm water periods. And keeping that schedule, every day no matter what in whatever mother nature hands out can get pretty old, and that's a fact.
I have spent most of my career as an independent business owner. It takes a different cat to begin with.
Have a client cancel a week and it REALLY hurts. Have a recession slam the business like 2008 to date, and it's not as rosy as some think. By the way, the Guides are not critiquing OUR jobs, so who the hell are we to critique theirs?
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Posts: 402
Location: Eagle River, WI | The lack of knowledge and general business practices on this thread is shocking. You do realize that when you pay for a service or product that all of that money isn't 100% profit................nevermind. Have a nice day. Go Packers. |
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Posts: 1996
Location: Pelican Lake/Three Lakes Chain |
Norm 12 gallons a day up there? Why so much gas lake hopping in oneida? thats about 1.25 times as much as we use in Canada for a long day. Not calling you out bro, just seems like a lotta gas for around here.
Yes, 12 gallons a day. 200HP running lakes like Pelican and Three lakes most of the time (lots of water) and not doing it at an idle will eat up some gas. This is not inflated by any means. |
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Posts: 202
| Sorry guys I did not mean to appear cocky that is y I said that I am lucky enough to guide on such an amazing lake like St. Clair. As for the Captains license I am pretty sick of getting called out on that so I have attached a picture. As for the gas I would love it if 12 gallons of gas was a bad day out there. I probably average around 5 per day but have done as much as 35 on a guide trip. However being on a lake that is 420 square miles will do that.
Attachments
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 DSC_0192 (3).jpg (176KB - 146 downloads)
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Location: Sawyer County, WI | nwild - 11/30/2011 11:28 AM
Norm 12 gallons a day up there? Why so much gas lake hopping in oneida? thats about 1.25 times as much as we use in Canada for a long day. Not calling you out bro, just seems like a lotta gas for around here.
Yes, 12 gallons a day. 200HP running lakes like Pelican and Three lakes most of the time (lots of water) and not doing it at an idle will eat up some gas. This is not inflated by any means.
That's clear. Everybody knows it costs money to chase beaver, even if it less expensive to do so in northern Wisconsin.  |
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Posts: 18
| For the folks out there that are employed by someone else and think they understand the term "tax write off". The term tax write off does one thing and one thing only, it's a deduction from any PROFITS the business makes, reducing any state and federal income tax you may owe at the end of the year.
Things like boats, trucks, trailers etc are based on a depreciation schedule and are not considered an expense. There long term assets that carry a long term liability payment(usually monthly) and are amortized over 5-7 years depending on the item. Things like lures, reels, rods and the like are going to be in a grey area on the tax scheme. If you’re lucky you can do a full 100% deduction on these, but it has to be shown that they are being consumed on a regular basis (1 year or less) otherwise these are considered assets and also have to be deducted on a amortized schedule.
What does all of this mean. Well put simply, if you plan on guiding full time and expect to make a "living" you are sorely mistaken. People are using the dollar amount of 35k a year "take home" quite a bit here. If the margin on service you provide is 50% you are the best business person to walk the earth. Let's run the real numbers.
Nice boat: 50,000.00 (Loan)
Reliable truck: 40,000.00 (Loan)
Fishing gear: 10,000.00 (Came from savings)
--INVESTMENT--
We have our 100k investment.
--EXPENSES--
Business supplies, advertising, fuel, meals, travel, repairs, maintenance, licensing, business insurance, health insurance.
It doesn't matter what business you’re in, the expenses listed above are going consume 40-50% of any income taken in, period.
I.E. we just got done with a great year and generated 70,000 in revenue. With the above mentioned expenses we have (let's use 40%) $42,000 in income (business profit). Chances are you are a S-Corp, which means your yearly business profits roll down into income for you personally. Remember, we haven't taken a salary yet. We look at our amortization schedule for our assets, we currently have 100k in assets that we can depreciate over the next 5-7 years. Let’s use 5 year(s), 100k divided by 5, is 20k a year. Now we only have to pay taxes on 22,000 dollars of income.
Ah, but we didn't have 100k in the bank to buy the new boat and truck, so those are financed at our bank. And yes the yearly expenses listed above don't take into account business equipment and equipment payments although we have already used them in the amortization/deduction schedule.
Truck payment for 60 months: $787.34 at 6.75% interest
-- Interest over the life of the loan, $7240.00 Divided by 5 year depreciation schedule(the time it takes to "write off" the asset) is $1448.00. Interest is tax deductable as well.
Boat payment for 60 months:$984.17 at 6.75% interest
-- Interest over the life of the loan, $9050.00 Divided by 5 year depreciation schedule is $1810.00.
So now we get to deduct the interest payment from our tax burden. 22,000 - 1448 -1810 is $18,742.00. Now we started out with 42,000 in profit and with the "tax write offs" that everyone is so excited about quoting we only have to pay taxes on 18,742.00 dollars of that.
But wait you are self employed, so you have to pay the employer and employee portions of the income you've earned minus your deductions.
Employee:
Federal: 9.4%
Social Security: 4.1%
Medicare: 1.4%
MN withholding (obviously I’m in MN): 4.3%
Employer:
Social Security: 6.2%
Medicare: 1.4%
26.8% of 18,742.00 is $5022.00. That's your yearly taxes between state and federal.
$42,000-$5022.00 equals $36978 profit.
Now we have to pay back the bank, in monthly payments. The truck is 787 dollars and the boat is 984 dollars a month. So for the year we had 21,252 dollars in equipment payments.
So, 36,978 profit after taxes minus 21,252 equals $15,726 dollars..... So if you've read all the way down to this point and want to know what your paycheck is every 2 weeks... here you go, you get to deposit $604.84 into your checking account. Can anyone here live on 604.84 every two weeks with their personal bills?
My intention with this is not to be a smart @ss, but to explain to folks that a sole proprietorship that only generates 70k in revenue every year is unsustainable. It doesn’t matter how good a guide you are, there isn’t enough money available to do it as a full time career unless you have already made your money elsewhere or you have an alternate income. And there is no such “tax break” that can save a doomed business from the get go.
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Posts: 897
| If you're gonna slam other people's numbers...well, you're assuming guides report and pay taxes on all of their revenue...and that you need a $50,000 boat and a $40,000 truck to guide...which you do not and most do not have. I'd be willing to bet a good number of the guys running $50k boats are sponsored and don't pay anywhere near that number...and probably end up making a profit when they turn them every year or every other year. I'm not saying guiding is a lucrative business by any means but I think the overhead numbers are a bit inflated/off here. |
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Posts: 2865
Location: Brookfield, WI | Early in the thread I though maybe most fishermen did not understand the difference between gross and net. One thing I didn't see mentioned is health insurance. Try on some self-employed health insurance for size.
Kevin |
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Posts: 32880
Location: Rhinelander, Wisconsin | 'I'd be willing to bet a good number of the guys running $50k boats are sponsored and don't pay anywhere near that number...and probably end up making a profit when they turn them every year or every other year. I'm not saying guiding is a lucrative business by any means but I think the overhead numbers are a bit inflated/off here.'
I'll take that bet. You will lose.
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Posts: 13688
Location: minocqua, wi. | i want a piece of the makin' money on a boat bet too ... LOL, that's a hall-of-famer post right there. |
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Posts: 906
Location: Warroad, Mn | I've guided for many years. Never made much money and always had another source of income (as do most of the guides I know). The days available on the LOTWs are too few to really make a living at it, or even close. I view it as a cheap way to go fishing. Met many-many great folks. Some of who are now great friends, and almost every one I've fished with are great and fun. I enjoy having folks catch a fish or two and teaching and showing. If I make enough money to pay for the gas, insurance, and a few repairs, for the rest of the year I'm pretty happy, Still I enjoy it all. Meeting new folks and fishing with old time clients is a great way to spent a summer. Doug Johnson |
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Posts: 402
Location: Eagle River, WI | Thank you Kodiak for taking the time to write what I don't have the patience to.
Thank you Whynot for helping me remember why I don't have any patience.
Everybody that owns their own business is rich. That's why I decided to buy my own health insurance for $1100 a month with a $5000 deductible. Don't forget though, I can write it off. I write off everything. At the end of the year, the government sends me a check I have so many write-offs.
People that are posting on here about write offs that are obviously employess and not employers just go to show you that good help is hard to find. If you could really clear 40-50k guiding for muskies, I don't think there would be any place to park at the boat landings around here. |
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Posts: 18
| Whynot,
Do you really want to be the small business owner that doesn't declare your earnings when the IRS comes around. As far as the numbers, if you can find fault in them I'm willing to listen.
To put things in perspective, I own a small business, know guides that have there own small business(guiding and other ventures), and work with dozens of business owners on a daily basis. If anything, the numbers are too generous on when it comes to what most would be able to put in there pocket at the end of the year. |
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Posts: 16632
Location: The desert | Kodiak_HL - 11/30/2011 6:12 PM
Whynot,
Do you really want to be the small business owner that doesn't declare your earnings when the IRS comes around. As far as the numbers, if you can find fault in them I'm willing to listen.
To put things in perspective, I own a small business, know guides that have there own small business(guiding and other ventures), and work with dozens of business owners on a daily basis. If anything, the numbers are too generous on when it comes to what most would be able to put in there pocket at the end of the year.
Logic doesn't do well around here. Great post with that analysis! |
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| Welldriller, you about summed it up. I have been in banking for many years and most of our customers are small business owners. The way people look at charges shows a complete lack of understanding about what it costs to operate a business. Even at $1,100.00 your health insurance is still cheap compared to some I hear about. I am sure folks look at the time you and a crew spend drilling a well and say, wow, look what they charge per hour. That is about the level of sophistication shown by some on this board regarding income vs revenue. |
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Posts: 1451
Location: Kronenwetter, WI | http://www.youtube.com/watch?v=rCZRqH7sRyA
Kodiak---point well taken. |
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Posts: 716
| I knew I should riteoff my boat...anyone have Kramers number I need more details ! |
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