“You’re making how much!” said the new CFO. “That’s more than what I make!”
No sir, I’m not making near as much!” said the fee-based insurance consultant. My overhead is 35% of gross revenue leaving 65% taxable income. At my tax bracket my net income is 42% of gross earnings.“
“But we’re paying you $180,000 per year! That’s too much!” cries the CFO.
“But my net is only $75,000! That’s not enough!” says the consultant. “Tell what I’m gonna do. I’ll bill you $75,000 and make enough on the backend to actually earn the $75,000 by hiding the bulk of my fees on the claim side of the ledger. That way you’ll be happy that I appear to be making less that what you think I am and I will be sort of maybe happy too! Plus I’ll look real good on a spreadsheet in case you go out for a Request for Qualifications for an insurance consultant!”
HOMEWORK READING ASSIGNMENT: How Much Do You Charge?
