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Tomorrow will be my last day at my job.
After 15 years of working as an event marketing professional, I’ve decided that I’m ready for a new chapter in my life.
The companies I’ve had the pleasure of working with have treated me well, given my family benefits and paid me generously. I sincerely appreciate the opportunities I’ve been given. It’s just time for me to follow a new calling.
When I started my podcast in 2016, it was just a hobby. Something to do as a way to give back, learn from others and hopefully help a few people along the way.
As time passed and I learned more about the incredible network in the personal finance community, I discovered there were people who were doing this full-time. Not only were they doing it full-time, but they were also making a solid living and had flexible hours as well.
Fast forward a few years later, I too figured out how to make a living from my hobby and now I have an award-winning blog and podcast that is landing me sponsors, content creation opportunities and speaking gigs.
This wave of opportunity combined with my passion for helping families build wealth and thrive is too hard to ignore.
So I’m going for it.
But it wasn’t easy to give up a stable career with great benefits and a six-figure salary with two young kids at home. Nicole and I had a lot of conversations and man, did we prepare.
Here are the 10 steps we’ve taken to ensure my transition to entrepreneurship is a success.
1. Eliminate Debt
When Nicole and I got married, we both carried some debt into the relationship. I had $30,000 of student loans and she had a $20,000 car loan.
We agreed that we’d tackle the debt together by living on my income alone (at the time it was around $70,000) and using Nicole’s income to pay off our debt. This helped us eliminate our $50,000 of debt in around 12 months.
With no debt or car payments in our lives and lower overall living expenses, we allowed ourselves to be more open for opportunities like part-time work for Nicole, her eventually going full-time Stay-at-Home Mom or, in my case today, entrepreneurship.
2. Pay Off the Mortgage Early
A few years ago, we were able to pay off our $200,000 mortgage early. We were able to do this by partnering together, keeping our expenses in check and increasing our income.
During this time period, we averaged around $170,000 in income so as I said earlier, I was very grateful for the generous income I received in my career.
Even though we were making great money, we lived on a lot less than we made. Our annual expenses were between $60,000 and $80,000. This helped us to realize we could live on a lot less than we made and feel very happy.
Once the mortgage was gone, I felt a lot more confident, happy and prepared to make decisions that were in the best interest of our family and our future.
3. Save 12 Months of Expenses
About 50% of small businesses fail after the first 5 years. One of the major reasons that they fail is that they run out of money. I didn’t want that to happen to me.
We decided to save up 12 months of expenses in a high yield savings account as a cushion. This made us feel protected as our income is going to be unpredictable at the beginning (no steady paycheck anymore).
Originally, we were going to use this money to buy our first rental property, but we’ve since decided against that. This small business is going to be our first big investment instead.
4. Invest Consistently for Retirement
Over the last decade, Nicole and I have saved for our retirement so that we can take advantage of compound interest while we’re young and save on taxes. Here are the areas where we invested:
For the last 6 years, I have maxed out my 401k at work. Combined with the match I received from my employer (another awesome perk), we have nearly $200,000 saved up. This nest egg, if we didn’t add another dime to it, can grow to around $1.2 million by age 65 (using a conservative 7% growth).
Additionally, we have amassed another $100,000 in our IRAs (both Roth and Traditional). If we allow that do its compound interest growth thing as well, we should have around $600,000 by age 65.
Another incredible benefit offered to me by my employer was an Employee Stock Ownership Plan. This was free money given to me for being an employee of the company. Now, I didn’t make it to 100% vesting, but I got to 80%.
In a couple of years, I should have another $100,000 available for retirement funds. This is all in company stock so anything could happen to the value. Based on that, I will be transferring it all over to a Traditional IRA as soon as possible so I can diversify across some select index funds. Again, that should land us around $600,000 come retirement time.
With all those options combined, we should have around $2.4 million (if we don’t invest one more dime into our retirement). Using the 4% rule, that should allow us to live comfortably on around $96,000 per year in retirement. We’ll still plan on contributing more, but knowing those numbers are conservative, we’re feeling very comfortable in taking this entrepreneurial leap.
5. Research the Cost of Health Care
One thing I was always worried about was the cost of health care. If I lost my benefits, how would I get coverage and take care of my family?
Well, it helped me a lot when I started to research it. It wasn’t as scary as I thought.
If I kept my coverage at work through COBRA, it would be around $1,700 per month. That wasn’t bad, but I thought I’d do some more research.
I went on HealthCare.gov and found a High Deductible Health Plan that covers our family (very similar to my coverage at work) for around $1,200 per month. With dental thrown in, we’re around $1,300 per month.
And since we’re going with a High Deductible Health Plan, we can continue to invest in our Health Savings Account (HSA) and save and invest for future health care expenses. As that HSA account continues to grow (we partnered with Lively), it gives us even more protection for unexpected health events that may arise.
6. Diversify our Household Income
For the last 5 or so years, Nicole has been a stay-at-home Mom. She started back with part-time work last year and her income has really helped us plan for the future and have more fun.
A few months ago, she found a 30-hour per week job as an administrative assistant that she really loves. It’s close to the house, she has manageable hours and she still can drop off and pick up the kids for school. Her new income definitely makes this decision a lot easier!
Additionally, my business has multiple sets of income. I have podcast advertising, freelance writing, brand ambassador work, coaching and content creation services that help me diversify my income. If one of them falls flat or goes away, I have the others to lean on.
This year, I’m projecting to make over $100,000 in my small business. I’m hoping this diversification plan will allow us to live a similar lifestyle as we’ve had in the past.
Related Interview: How This Young Mother of Twins Earns Six-Figures Working from Home
7. Try Your Business as Side Hustle First
Jumping right into small business ownership would make me feel nervous. I’ve learned so much over the last 3 years about managing and owning a business.
Being an employee for the last 15 years, I’ve had an HR department, sales team, marketing leaders, accounts receivables and even an accounting department. With entrepreneurship, you have to be ALL of those things.
I’m glad I’ve given myself some practice to realize this before taking the leap.
Also, by trying out my small business as a side hustle first, I gave myself ample time to decide if I liked it or not. I’d hate to quit my job, start my new business and then decide I don’t like it!
My side hustle time was like a test run beforehand. “Try before you buy” per se!
8. Plan Out Our Budget
The sheer act of writing down the numbers made us feel more comfortable with this big decision. We will have to sacrifice some “extras” for a while as we get used to our new income level, but we’ll be ready.
9. Grow My Network
Over the last 15 years, I’ve developed a solid network of folks who work in the event marketing industry. That network has helped me to get new career opportunities, grow my skills and increase my salary from 5-figures to 6-figures.
Now that I’m jumping into a new industry (personal finance), it was important for me to grow a new network as well. So for the last 3 years, I’ve been making connections, both in-person and online. Through my interviews on my podcast with millionaire entrepreneurs, personal finance experts, and financially independent families, my network has grown substantially.
With a bigger network, you get more opportunities. Based on the connections I’ve made, I was able to receive new opportunities for writing, speaking and content creation.
As they say, your network is more important than your net worth.
10. Take a Leap of Faith
I like to think I’m VERY prepared for this big decision, but I know there are thousands of things I’m yet to learn. After all, I’ve never done this before.
I know failure will come. There will be rough days ahead.
But I know there will also be some big wins in my future. And those days will be incredible ones.
I know, either way, my family will be there to give me a hug and say, “You’re doing your best. Keep at it.”
This is an adventure. Pure and simple. That’s what gets me excited. The unknown. The unpredictable.
So here I go. I’m jumping in with both feet starting tomorrow.
Wish me luck. I’m going to need it.
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“Go out on a limb. That’s where the fruit is.”Jimmy Carter