The Secret (Financial) Life of a Modern Day Influencer

Influencers seem to have it all. Coffee at a quaint cafe, followed by a quick vlog walking the city streets, and a half hour on Instagram Live to chat with followers about what was in the latest FabFitFun box.

By sharing a small snapshot of their lives each day, it can look like influencers are earning multi-six-figure salaries while they spend the rest of their time indulging in the high life. But the reality is likely very different.

Another Selfie, Another Sale?

The number of people hoping to become social media stars is growing by the day and it takes more than good luck and a few pretty pictures to build a sustainable career.

As I close in on my first 10,000 Instagram followers, I’ve become what’s known as a micro-influencer: a social media personality with a small, but engaged audience in a targeted niche. In my case – millennial personal finance.

I’ll spend an hour or more putting together a single Instagram post and another hour or two engaging across the platform – commenting on other posts and responding to comments on my own. Not to mention the hours that go into researching hashtags and analyzing analytics to understand what content is and isn’t performing based on the latest algorithm updates.

It took over a year of dedicated efforts to grow my Instagram following, not to mention the hours I put into tweeting, blogging and traveling to and attending offline activities like conferences, professional speaking and national media appearances.

While I earn a full-time income as an influencer, my social channels alone do not generate enough income to cover the bills. They’re just one piece of a multi-pronged influence strategy that spans across multiple platforms and media types, from custom content creation to live events.

While some influencers shoot to stardom and financial success like Liza Koshy, who recently locked in a deal with YouTube Originals to produce the show, Liza on Demand. More than 96% of YouTubers don’t make enough in ad revenue to reach $15,000, which is the federal poverty level.

The appeal of fame and followers can outshine the financial implications if an influencer doesn’t know how they will bring in revenue. It can turn anyone into a harried hustler with little to zero cash flow from all of the output.

Inside the Financial Life of a Social Media Influencer

As influencers work to grow their followings, they’ll often hustle within the gig economy – picking up freelance jobs, writing blog posts, creating website graphics, etc. Even taking on work outside the industry, like babysitting or driving for Lyft, to make ends meet.

In her viral post, ‘Get Rich or Die Vlogging: The Sad Economics of Internet Fame’, influencer and author Gaby Dunn writes, ‘My Instagram account has 340,000 followers, but I’ve never made $340,000 in my life collectively. The high highs and low lows leave me reeling. One week, I was stopped for photos six times while perusing comic books in Downtown LA. The next week, I sat faceless in a room of 40 people vying for a menial courier job. I’ve walked a red carpet with $80 in my bank account.’

Wait, There Are Business Expenses?

In addition to the time cost of growing a following, influencers often incur steep financial costs to create and promote the content that lives on their channels.

Common influencer expenses include social media scheduling tools, video and photo editing software, website hosting, dedicated email addresses, and at least a dozen other paid apps to make sure their platforms are connected properly.

It’s common for influencers in niches like fashion to spend several hundreds of dollars (and often going into debt!) putting together a single post – think professional photography, accessories, clothing, lighting, etc. Not to mention the costs of doing business, like accounting, legal and marketing services.

And don’t forget the 15.3% tax rate if you’re a self-employed influencer. Net profit can amount to less than half of the revenue you make in any given month. Plus you’ve got to pay for your own healthcare and fund your own retirement.

So How Much Do Social Media Influencers Really Make?

Like all things financial, it depends.

The more followers an influencer commands, the higher rates they can charge. YouTubers with more than 7 million subscribers have the ability to charge upwards of $300,000 for a video partnership.

But not all influencers are savvy enough to turn their raving fans into profits.

Without multiple revenue streams and a way to translate followers into engagement and sales, influencers can experience feast and famine scenarios.

It’s Possible to be Profitable

Bottom line, influencers can see positive financial results when they start treating their social hustle as a legitimate business. That means looking at monthly business expense reports, identifying multiple revenue streams and consistently putting out content. Without a legitimate business approach though, influencers can flounder financially, burning out before they learn to grow their influence into a sustainable business.

The views and opinions expressed in this content are those of the author and do not necessarily reflect the opinion or view of Intuit Inc, Mint or any affiliated organization. This blog post does not constitute, and should not be considered a substitute for legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.