As many who’ve been reading this blog for a while know, my hubby and I are pretty much majorly lusting after the elusive dream of financial independence. We want to be financially independent so badly that we can taste it. After spending years in school, we are now both working in jobs that we trained for. We like the work itself. What we don’t like? Some of the, um, baggage that comes with our jobs. It’s nothing terribly different than what probably millions of other people out there deal with every day- long hours, other people setting your priorities for you, difficulty working with certain personalities, etc., etc. The upshot? We have been doing some big dreaming about becoming less dependent on an employer.
However, we’ve been working hard on ditching debt and building up our assets for some time now (well, I have to admit that up until a few months ago we were in major asset accumulation mode, and it’s only been in recent months that we’ve decided that our debts, albeit at low interest rates, suck and we want to get rid of them). We’ve made progress, definitely. Is it enough to say Adios to our jobs? Not by a long shot.
It’s Pretty Far Off
Truth be told, right now it seems like we’re pretty far way from that. Especially with expensive things like an upcoming adoption looming on the horizon. We have been good savers and have squirrelled away a nice chunk of cash for that expense, but still it will be a chunk of cash that we’ll have to part with. And after that of course our expenses will likely increase since babies aren’t cheap we hear. 🙂
Anyway, on days when the jobs are particularly tough we dream of becoming at least partially self-employed (to start, and then hopefully build from there). Since it seems like we are not going to magically become independently wealthy any time soon, self-employment looks like a nice middle ground where we could have more autonomy and more control over our daily lives yet still have an active source of income to draw from in case we never have enough income-flowing investments to cover our expenses.
Pros
However, I think there are some definite pros and cons to be considered with self-employment. Pros would certainly include the ability to set one’s own goals and priorities, flexible hours, flexible work attire, etc. We could focus on the work we feel is most important. We could set things up for ourselves, and if we wanted all the work to be location-independent we could totally create it that way. I could go on I’m sure, as I think many would agree that there are lots of benefits to being self-employed.
Cons
There are some definite cons to self-employment that we are forcing ourselves to consider at this point though. For example, right now we enjoy some nice benefits at our employers, including a 401(K) to invest in (with a match), employer-subsidized health insurance, life insurance, etc. I also have I think five sick days that I can take each year. Plus some paid vacation time. If we go self-employed? All gone. Ouch. We actually have our own life insurance apart from our employers, so we would be covered there, but basically if we said goodbye to our employers tomorrow we would be on our own for everything else. Not to mention taxes. Yikes. That sucks.
Hybrid Approach?
So right now we are sort of looking at a hybrid approach to self-employment, at least to start. I am the one who is most dying to be free from paid employment and I am also the one who makes less at my day job and has another promising income stream starting to flow (from writing and starting a blog), so it makes sense that I could make the break first and hubby could keep his job and all the benefits. I also have the option to do part-time work at my job, so I could go part-time to start while hubby keeps working full time. I don’t think I’m exactly in the position to do this immediately, but it is definitely something we are starting to consider, especially since I would also like to be home more if and when we are able to adopt a child.
Anyway, suffice it to say that there is a lot to consider when you consider becoming self-employed! We are not quite there yet, but this is the direction we think we are going to be heading in the future.
I’d love to hear from any of you who have taken the leap and gone to self employment- do you have any regrets, or is there anything you would change? Is anyone out there like us, wanting to do it but a little nervous about the loss of employer-sponsored benefits?
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Photo credit: PT Money
I don’t want to be self-employed per se but would rather own a business with various employees. With that being said, self-employment is an ideal place to start because you have more control over your time and work. I have the hybrid approach going with some side income but I don’t foresee myself quitting my 9-5 job anytime in the near future.
That’s where I’m struggling right now, it’s hard to feel like I’m making much progress when I feel like I have so little control over the majority of my time. I’m still very much working on growing my writing so I’m not there yet anyway, but it’s something I could see being more of an issue going forward.
Friday is my last day at my job before I go part time. I’m terrified. But excited. I don’t know how it is going to work out, but at the moment, we do not have any major plans for our future like you do. No kids on the way. No big move. Nada. We have at least three years before we plan on making that stuff happen. So our thoughts were “why not?”
TBH, in your case, I would probably work up until the adoption papers were signed or until you were making your income after taxes via your side hustles.
Congrats Michelle! Yeah, that’s pretty much our plan right now. We have a lot going on at the present time for sure. It would be an easier decision to contemplate if we didn’t have so many personal goals that are going to take a lot of cash, like the adoption. Good for you, I’ll be interested to keep following your progress on your blog to see how it goes!
My switch to self-employment was the best thing that has ever happened to me. I had a lot of cons of staying at my job, and I’m glad I didn’t wait any longer than I did.
I would like to take a hybrid approach as well, at least until I could make enough from writing. I don’t really have many benefits so I’m not too worried about that. I do think that working part-time is a good way to transition into self-employment though. At least you still have some dependable income coming in.
I would love to have my own business, but don’t see starting one for at least the next 5 years. I have too many perks with my 9-5 job (like the ones you mentioned) and it would make it very difficult to give that up. Not to mention the taxes! Ugh. I think if the right opportunity came along, I would jump at it, but I’m comfortable with where I’m at (for now). But there is a lot of baggage, you’re definitely right about that!
It’s a lot to consider, that’s for sure. We’re still in the contemplation stage, but I think that’s where we are headed.
My wife and I are both self-employed. For her, she routinely stresses that the last job she got is the last one she’ll ever get. By my count she’s been proven wrong 147 times so far–still, she stresses. 🙂 So for some I guess that’s a negative, not that paid employment is a guarantee of anything these days.
For me, I love the autonomy and schedule flexibility freedom that comes with self-employment. Sunny today? I can usually choose an afternoon walk instead of daydreaming through the window of an office (if I were lucky enough to have a window) about what it would be like to be outside just now.
I think your hybrid approach is a good idea. Quitting paid employment cold turkey to go 100% into self-employment feels, often rightly so, too risky for many people to swallow. Baby steps may be the solution.
I love the way you put it- baby steps. That’s exactly what we are doing!
Congrats on the upcoming adoption – that sounds like such a wonderful thing to do for a couple!
The hubs and I are on the same boat – we’d love to be able to either work at home or just be financially independent through our savings/investing. I am able to transition my work into a home office position, so I think that’s what’s going to happen in the next several years. The hubs would probably prefer to work on our own business and write our blog all day if we can make that work 🙂 First things first: we gotta erase my student load debt. We’re 1/2 debt-free when we paid for the hubs’ student loans. Now we’re trying to erase mine too. Once we are completely debt-free, we are good to go!! Wooo…
We need all the inspiration we need to get to our goal of financial independence – it’s great to hear we’re batting for the same team!! We’re rooting for you 🙂
Thanks, we are looking forward to it! I totally hear you on the student loans, we are working hard to get rid of those too. We have several different irons in the fire right now, which is perhaps diluting the effort a bit, but adoption is important to us so we’re not willing to put it off! We are making progress on the student loan debt, but not as much as we’d be making if we weren’t trying to afford an adoption simultaneously. Oh well, we will get there too. Good luck to you!!
I can understand your eagerness to take the leap. My wife and I are about 11 years away from our anticipated financial freedom date. Like you we’ve thought a lot about whether or not we could do our thing or take the hybrid approach. Every year I’m getting a lot more confident that we might actually be able to pull it off.
Awesome! Good for you. We’re still doing a lot of thinking about what might or might not be possible. My problem (which me hubby would readily tell you) is that I am too impatient and want everything to happen NOW. That’s why we’re a good match, because he is a lot better at long-term planning than I am.
The allure of self-employment is definitely really strong. Could you imagine not having to deal with insane bosses anymore?? …although I guess you just get insane clients instead sometimes. I think I’m too much of a chicken to ever go 100% out on my own since I like the stability of knowing I have a guaranteed paycheck.
On the flip side, I’d love to build up a business to where I don’t NEED that paycheck. I feel like even just knowing you could walk away if you wanted is very liberating.
Amen sister! That’s what we are dreaming about right now. I think we have got a long ways to go, but it helps to have a blog, which allows for a place to muse about all this stuff and get lots of feedback. Especially when some of the folks offering feedback have done what we dream of doing! Gotta love it.
I think it takes a very self-motivating, driven and focused person to be self-employed. And let’s face it, not everyone is like that. The biggest reason I would do it is the freedom to choose my own direction/path and not have it dictated to me.
You make an excellent point, and I think that is definitely something to consider- although I would hope that the fear of not being able to put food on the table if you don’t put in the work would be a pretty strong motivator for most people! You never know though.
I loved the freedom of being self employed (and I’m very disciplined, so that helped). I sometimes ponder about going back to being my own boss, but I’d first need to know what I’d be doing for my money 🙂
At this point since I’ve never actually been self-employed it is just so hard to imagine what that level of freedom would feel like. I would certainly love a chance to find out, we just have to keep charting our course here…
I made the leap to self employment last September, and it was and still is a scary endeavor. The only thing that really helps me sleep at night is knowing that my hubby has a solid job and paycheck. Plus we get health insurance through his company which REALLY saves a lot of money.
I think that’s why a hybrid approach would probably work best at least in the beginning. I especially can’t imagine having to fork out that much cash for health insurance. There is soo much to consider with a decision like this.
I consider myself more of a hard worker than a risk taker so self employment kind of scares me. However most people that I know who have done it have no regrets it seems. At least I don’t know many people that have gone self employed and then switched back to working for an organization later.
You’re exactly right- it’s taking a big risk. I also don’t know many people who’ve ever lived to regret their decision to become self-employed (at least not here in the PF blogosphere). I wonder if that’s partially because you have to be really organized and thorough and a good planner in order to do it successfully- which probably means that many of the folks that I know who are doing it successfully were uber-prepared before taking the leap.
Self employment and running your own business has a lot of tax advantages. Start small, work your way up. Keep the jobs for now. I have been working 80+ hour weeks for years, and it is do-able.
Do not get employees, unless they are sub-contractors. It reduces your risk.
Once you become self employed, you will make a terrible employee.
I can totally see your point about being a terrible employee once you’ve been self-employed. I find myself NOW questioning some of the baloney, and I think it would be even harder to take if you’d had the experience of being self-employed.
Great point, and I think it would really take some of the pressure off doing it that way too. Much more enjoyable!
I’ve thought a lot about self employment as well. It sounds so fun and I would love to escape the 9-5 life. I wouldn’t mind working on the weekends or nights if I was doing something I loved. However, we are working on paying off debt as well and I don’t think I would seriously explore self employment (let alone what I would want to do!!) until the student loans are completely gone.
I know, it seems like getting rid of the student loans first would be best since that would decrease our monthly expenses and our obligations “just in case.” We’re getting there slowly…
I’m working toward financial independence myself and will also admit that it’s pretty far off still. I’m using the hybrid approach right now as well by working my 9-5 and spending a considerable amount of time working on my other revenue plans.
It’s exhausting at times, but it should pay off someday. At least that’s the attitude I have right now. I look forward to hearing your progress and I wish your family the best of luck!
Thanks John! It’s still pretty far off for us as well, but we are working hard on it 🙂
As long as you’re putting in the work, I am confident that you can get there just as I’m confident that I can too! I’ve been working my tail off to gain new sources of residual income and investments that will pay me long into the future. It’s exciting!
I’m a HUGE fan of self-employment… and also overlapping with full-time work.
When I started my last company in 1996 I did it as a part-time side-hustle for two years while working a salaried job. Then it started to get traction but I didn’t jump in with both feet yet – I actually hire staff while continuing to get an outside salary myself. In fact, it was almost five years of having a business before I quit my salaried job.
Following that process removes SO much risk! I went on to grow that business for 18 years and had a very nice exit in 2014. While investing did have me on a steady path to a millionaire retirement, having this influx of cash allowed me to retire in my early 40s.
I’d encourage everyone to look for an area they can be passionate about and make some money with. Don’t have money be the top motivator though – it has to be something you really enjoy.
Sounds like excellent advice! Thanks so much for stopping by!