It’s a dream come true to make money doing what you love.
However, most people are unable to support themselves financially by doing what they are most enthusiastic about. So, how do we strike a balance between the work we have to perform and the work that we enjoy?
We pondered this very subject as we neared the end of our corporate careers. We realized that if we could gradually replace the income we were earning at work, we’d be in a position to leave our jobs and pursue something we were passionate about.
Rather than chasing the next six-figure job, we set out to create multiple smaller revenue streams that would allow us to better manage our time and income potential.
We both planned to become full-time entrepreneurs by 2020, and we’re on target to fully replace our previous work wages by 2022, if not sooner. However, the procedures necessary to get to this stage began in 2015.
We asked ourselves several important questions as we began to picture a more balanced life. What kind of job do we want to be known for? Who would benefit from the work we’d produce? Finally, what financial decisions do we need to make in order to make this transfer a success?
The work-related questions were straightforward: we wanted to tell innovative and culturally relevant stories that motivated people to make better financial decisions. Our sales and marketing backgrounds equipped us to recognize who our clients were and how they distinguished themselves from other consumers.
The financial decisions, on the other hand, were significantly more difficult because they forced us to make forecasts about the trip ahead (despite the fact that we didn’t see the epidemic coming).
If you’re considering making the same shift from a job to pursuing a passion as a full-time entrepreneur, here are some tips.
1) Have a Large Amount of Cash on Hand.
A good rule of thumb is to have three to six months’ worth of living expenses saved away in an emergency savings account. However, if you want to become an entrepreneur, you’ll almost certainly need a lot more. If your new company venture isn’t able to support your lifestyle, you should aim to have at least six to twelve months of cash on hand. In fact, it’s preferable to hold off on quitting until you’re certain in your capacity to pay yourself.
2) Get Yourself Out of Debt.
It’s difficult enough to start a business. It’s considerably more difficult to start a business when in debt. As an entrepreneur, you’ll need to be able to turn on a dime, which might be difficult if you’re saddled with high-interest debt. To avoid this, you should try to remove or reduce your debt to manageable levels so that you can better manage your cash flow and have a greater chance of getting access to reasonable lines of credit if you need it.
3) Open a Brokerage Account and Begin Funding It.
The majority of investment discussions center on retirement planning, so 401(k) and IRA accounts receive a lot of attention. However, if you’re still a few years away from retirement, you might need money that isn’t locked up in a tax-deferred account or sitting idle in cash, such as an emergency fund.
Having a separate brokerage account can make a big difference in this situation. There are no contribution limitations or early withdrawal fees, and the funds provide you with post-tax dollars that you can use now or leave to grow.
We began to look at our legacy and money differently the day we realized our job titles would not be on our tombstones. We’re now among the fortunate few who earn a living performing what they actually enjoy, thanks to years of cautious, deliberate growth. It’s a dream come true, and we hope you’ll be able to say something similar one day.