YouTube star who earns $1.6 million a year shares how he got his start

How a 29-year-old YouTube millionaire in Los Angeles spends his money

YouTuber Graham Stephan is on track to earn a minimum of $1.6 million in 2019.

It'll be the first time he's earned seven figures in a calendar year, a milestone he's been thinking about since 2017. "Two years ago, I made a goal challenge video," the 29-year-old millionaire tells CNBC Make It. "My goal was to make $1 million in 2018." He didn't quite achieve it, but surprised even himself by hitting it just a year later.

Today, 85% of his yearly earnings come from his two YouTube channels, primarily via ad revenue, and the remaining 15% comes from online courses he sells through the platform Teachable, real estate commissions, rental income and affiliates and sponsors.

Stephan didn't start creating videos with the intention of making money off of them. He was earning good money as a realtor, but posting on YouTube "looked like such a fun thing to do and I'd always wanted to do it," he says. "But I also felt like, Who would want to watch me? I felt like I didn't have the personality for it."

But about three years ago, he decided to film and upload his first video. It was an explainer on how to be a successful real estate agent that he shot "selfie-style" on his iPhone. "That was such a fun experience," says Stephan. "I remember that video getting nine or 10 views, and thinking, Oh my God, nine people somewhere have seen this video! So I started making more videos."

Graham Stephan earns most of his money making YouTube videos
CNBC Make It

When he first started earning money from his main channel, Graham Stephan, it was just "a few cents a day," he recalls. "Then it grew to a dollar a day, and I remember thinking at that point, OK, if I go an entire month, that means I can eat an all-you-can-eat sushi dinner entirely for free just with YouTube."

After a full year of making videos, he earned $26,000. It exploded from there.

"I started seeing a lot more growth in the second year," he says. "I made about $260,000." In 2019, his third year on the platform, he launched a second channel, The Graham Stephan Show, and is on track to make more than $1 million. Between the two channels, he brings in an average of $90,684 a month, though the most he's made in one month is $165,219, which he achieved in August.

Most of his YouTube money comes from ads, but he also gets revenue from YouTube Premium membership fees.

"In terms of scaling my income like that, I think a few things played into it," says Stephan, who spends the majority of his work day creating content and uploads multiple videos a week. For starters, he was selective about what he posted: "I dedicated a lot more time to the content that I felt my audience would really want to see and that I felt would do well for a YouTube algorithm. Half the time, it's giving the audience what they want to see, but also playing into what I think YouTube is likely to promote.

"Secondly, I think there's a snowball-like growth, in that the more subscribers you have, the more you will get — it constantly builds on one another. But you have to put in the time at the very beginning to get to the point where I am today."

Half the time, it's giving the audience what they want to see, but also playing into what I think YouTube is likely to promote.
Graham Stephan
YouTube millionaire

Since he can't predict his future earnings with YouTube, he doesn't rely on it as an income source. Instead, he treats it like "bonus income" and hasn't spent any of it. If he suddenly lost his following on YouTube, he'd revert back to his original career: selling real estate, which he's been doing since 18.

"If YouTube were to vanish tomorrow, I would be disappointed," he says, but from a money perspective, "it's never been something that I've relied on."

Don't miss: How a 29-year-old YouTube millionaire making up to $220,000 a month spends his money

Like this story? Subscribe to CNBC Make It on YouTube!

How a 27-year-old making $112,000 outside of Chicago spends her money