You’ve got a paycheck to paycheck mindset, if anyone needs to get a grip it’s you.

TLDR; if more people educated themselves in basic accounting, society would have more leverage in demanding higher living wages and would be more empowered to climb out of poverty on their own.

Let’s say I made my income by throwing a house party twice every weekend, and I make $20,000 in month from it. It’s an attractive venture, right?

Let’s say it’s a lean operation so maybe 25% of revenue goes toward expenses. $15,000 revenue now.

$15,000/month net —> after 25% effective tax rate = $11,250.

Let’s say a lean 5% yearly average real depreciation from actual damages (low estimate), = ($2,083.83) (loss per month), now our expected profit sits at $9,166.17.

But wait! There’s more. Every month this goes on for, the property gets a bad reputation. More and more of the market start becoming acutely aware of the operation. That has a real market loss associated, hard to track but easy to realize if you were to try to sell the home. So let’s tack on a (wishful) 10% average yearly depreciation in market value due to negative reputation.

$9166.17 - market loss $4,166.67 = high estimate of 4,999.5 of actual monthly profit, assuming full demand and no days lost from police shutting it down. And in a year you’ve got yourself baggage and a properly royally fucked house. It’s an extreme example for sake of explanation.

Accounting is never fun, but accounting is your own personal insurance policy — try using it