Thinking Big

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Not only do I want to retire early, I want to have a great life on the way there. Duh, right? What I’m trying to say is that I don’t really worry about money in the long-term anymore. My wife and I are educated, hard-working (well, I can be…), and aren’t too materialistic. I’m already unhealthily obsessed with money matters. We’ll be fine.

The key is to avoid complacency. To be totally clich?, I want to Think Big. I’ve been toying with the idea of not looking for a ‘real’ job when I graduate. No annual performance reviews. No paltry two weeks of vacation a year. No more ‘Casual Fridays’. Be completely self-employed. This begs the questions – How much do I need to make to go solo? And where am I at right now?

I went graphic-happy:


At $40,000 a year, I think I could start to fathom not having a real job. At $60,000, I would feel confident to try it for a whole year and see how I like it, and determine how much work it will take to maintain that income. At $100,000 a year, I’d would be very happy. That would mean I could work half-time if I wanted, and still clear $50k a year. This would fit in nicely with our dream future.

This is also assuming that my wife keeps her own job and income, and can therefore provide the nice benefits package that a corporate job offers. Insurance for a family is expensive!!

I’m not there yet. Can I do it? We’ll see. I’m keeping my options open. But publicly announcing this is one way to light a fire under my ass. I have lots of business ideas swirling around in my head, but I need the focus and drive to execute it. As with most things, I need more action and less talk to achieve this form of financial freedom.

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  1. Well, maybe you don’t want to let the cat out of the bag, but this begs the question: how? What do you think you’ll end up doing being self employeed? Are we talking about the web designing stuff you are doing part time now? Through this website (I have no idea how profitable this website is)? Buying a store? Consulting thing-a-rather? Do tell!

  2. The problem is, to make $100K having your own business, you usually have to work very long hours. Several folks in my family have their own businesses, and they routinely put in 60+ hrs/week.
    The only one who doesn’t is my BIL… He’s a tax accountant, and he’s got enough of a reputation to be very choosy on the clients he takes on.

  3. Dave the H says

    As my self-employed friend, Carl, says when I ask him about time off: “My boss is a real SOB about that.”

  4. If you still work 40hrs/week, in order to generate $100k/yr, you have to generate $48/hr. But since you’re an independent contractor, add 7% to it for the extra FICA, which will add up to $51/hr.

    “Per-hour” part-time jobs can hardly get you that far. So, all I can think of is commission-based, trading-based things such as stock/real estates trading, online/offline store owners, commission-based sales/agency… or something WITHOUT a market price.

  5. Awesome, I love the graphic. I’d love to go freelance and sponge off of Her benefits, but you’re one step ahead of me in determining how much I’d need.

  6. I love this idea and it’s been a hope of mine for awhile as well. I’m curious though what the breakdown of your current 18k income is, where are you getting this non-corporate income from?

    I have some, invested in stocks, returning dividends, I’d say that’s the majority of my non-corporate income but it’s not coming anywhere close to 18k a year. I’ve envisioned needing around 1 million dollars returning on average 10% to come to a happy income level for me, of course finding somewhere cheap to live. Any 10% return over the long run needs to grow to account for inflation, so I average 3% of the return dumped back into the primary fund to continue the growth.

  7. Coming from a family of entrepreneurs, I’ve learned that running your own business can be extremely difficult. It has its ups, but there are also extreme downs. Generally, I would rather have a steady job working for someone else and not having to worry about work when I’m not working, than having to worry about my own business 24/7 (yes, you’ll lose sleep!), not to mention the extrme risk involved, depending on which industry you want to try.

  8. jigsaw1975 says

    I have been making around $50K a year for the past 5 years (and wife made $50K as well) and am pleased to say that we have cash savings of around $200K. Now i am so unsure what I am going to do with this hard earned money. So far it is in a savings account drawing about on average 4% interest. I have been burnt many many times in the stock market so there will try to stay away for now (new investments). I am now looking for a job that will pay at least $60K.

    This is our portfolio:
    Cash $200K
    Retirement: $20K
    Stocks: $30K (from wifey’s stock options)

    Recently on a flight, a broker sitting next to me recommended The American fund….anyone knows anything about this?

  9. How? Very good question. To be honest, I am making the $18k and working about 20 hours a week. The money comes from this site, web/computer consulting, and tutoring. I am actually avoiding hourly jobs even if they pay better, I want everything right now to be on my terms. I am not counting stock dividends, although that might be an idea.

    The thing is, I don’t want to depend on just one activity. To use another generic term, I want ‘multiple streams of income’ – some passive, some active. That is, a mix of ad revenue from websites, one-time consulting fees, ongoing monthly fees from reselling hosting and services, revenue from an online business selling physical items, and real estate income.

    I am *not* looking to start a restaurant or convenience store or any other franchise-type retail business. That is just too much trouble, and I know plenty of people who’s parents worked 7 days x 16 hours doing that. The goal is to work the same or less hours than a corporate job!

  10. If you go into some kind of business consulting you should be able to bill clients at $200+/hr., which won’t make it hard at all to get $100k in a year as long as you can find enough work. It may be worth it to work for another company for a while to make contacts, make a name for yourself in your chosen field, and create a client base, as well as get on good terms with an attorney or two who can refer work your way. Or you may be able to get work through a well-connected business school professor if you talk to him or her about your plans.

  11. If there’re jobs like that, I bet many of us will go for them, too…
    100k on our own terms… hmm… like ones in our dreams…

  12. Hi Jonathan
    I think the idea of multiple streams of income is key…I really do believe that if you are not materialistic and live below your means that you can save up, start multiple small businesses or micro businesses as I like to refer to them, buy a few rental properties, do some bond latters/Cds, and have a reasonable income. Oddly, 100k/yr seems to be the target that I would like to aim for also, but I think that you can live quite comfortably off of much less. I think that many businesses can be set up to be run on auto pilot eventually, but it takes a lot of work and planning to get there?but like the title says ?think big? and I think it can happen?

  13. I would love to make the money on my terms, but I come from a family who had a business for many years. The only way I would consider not working for “The Man” would be to explore the type of work you are talking about. I agree, no retail etc, and especially not a business with much overhead. I love all the benefits I get from working for a large company and when I’m done working each day, I think about anything but my company. (Okay, I do spend some time thinking about money making opportunities on the side)

  14. You guys don’t belive in already started businesses?

  15. In order to pull in $200 an hour you have to be pretty specialized with many years of experience. $100 an hour should be obtainable but if your skills are web development or something similar then the going rate is more like $60-90 (in Detroit anyway). This is what I am paying the three contractors who work for me. I’ve seen some slightly higher rates but they are not common.

  16. savvy saver says

    I agree, $200 an hour is barely attainable, unless you have highly valued skills and work for a D&T or Accenture type company. Here, even very experienced consultants are lucky to bill at $100 per hour… I know many that are highly, highly skilled and get $75 per hour.

  17. One huge benefit to being self employed are the tax savings: meals, travel, part of your rent, and any equipment you need for your job (cell phone, service, computer, software.) The list adds up quickly and results in huge deductions to offset your income. You do get hit with the Self Employment Tax, as well as paying your own SS, but the increased retirement minimums offset that. Five figures for SEP/SIMPLE retirment accts. I love being a sole proprietor, and I look forward to owning a Corp C. Good luck!

  18. I like the gist of your post. However, I think you and your commenters are generally thinking too small…

    Having been around entrepreneurs and business owners all my life, making $100K should be an interim goal for someone who possesses your creativity, education, and skills. Many, many small business owners make five and even ten times that. And, they aren’t slaves to their companies after they’ve built the foundation.

    Above all, you have to want it. Telling the world that you want it is the necessary first step. It will compell you to move forward. Kudos to you for doing that.

    A little over three years ago (when I was 28), I decided to trek out on my own. I met with someone who wanted to be my executive coach, and she asked me how much I wanted to make. I told her I could see myself making $450-$600K per year in my business. She nearly laughed in my face. If you go through with this, lots of people will doubt you and laugh at you behind your back. Don’t give in.

    In year one, I paid back 75% of the loan I made to the company, made a tiny profit, but I received no salary. In year two, I took home about $70K. In year three, I cleared over $130K. This year, my goal is to make $180K. I think I’m realistic about growing the company at a this pace, however others think I’m off-base. Whatever…

    If I only make $130K forever, I can live with that. But the real prize is the flexibility and the enjoyment that comes from doing it on my own. I’ll never work for The Man again.

  19. Jonathan: Consider becoming a contractor straight out of the gate.

    Build a business around yourself. You’re obviously a self-starter (you built this huge ass website right?) so why cow-tow to some pea-brain supervisor for 4 years?

    Form an S-corp for your contracting biz, then start shopping for high-paying contracts in the city of your choice. Most employers don’t even WANT full-timers any more.

    I’ve been a contractor for 5 years and its been fun and profitable. I’m no friggin’ zillionaire but its’ been a fun ride learning different businesses and biz cultures.

    One thing you should know: the higher pay you’re looking for, usually the shorter the contract (time-wise). Most of my gigs are 3 months or less.

  20. Believe in yourself and you can do it. Set goals and make steps to achieve them.

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