My Adventure in FI (but not RE)

[Culture]

I thought I would relate my experience in my first three weeks as a wage slave for myself, working as a consultant on my own.

My expectations were that I would be working less hours (since my wife also quit and is performed all administrative duties), and enjoying the work about the same as before, just with more flexibility since I eliminated the commute and management responsibilities.

What I have discovered it that the work is MUCH MUCH MUCH more enjoyable working for myself. No worrying about others and eliminating the 2 hour round trip commute has been terrifically liberating. I have actually worked many more hours per week the last two weeks (at least 65 hours each week), but because I can walk to and from the office in my backyard, it is much less stressful and feels like I am working less.

One surprise is that it looks like I will be able to work as much as I want (both good and bad). I have booked as much work in the last three weeks as I expected to book in the first six months. I have started having to give potential clients very large lead times on projects (I.e. i would love to do the work, but can't start for two months).

I expected long hours during the startup, and hope to tail down to 40-45 hour/week over the next month. This is significantly less than the 60-65 I worked before (including my commute). Plus my wife has freed up much more as she will be working at most 20 hours/week and was working full time before.

For some reason working an hour knowing the whole enchilada is going into by wallet has changed my perspective on work. This is somewhat surprising because I was one of the partners and owners at my previous firm and was certainly well compensated. However, essentially all the overhead has been eliminated, narrowing the gap between the invoice and my wallet. I estimate that when I bill $1000, $950 goes into my wallet. Yikes! This makes the hours enjoyable.

My wife and I did take off Friday afternoon to go to the RV show, and she went on a day trip out of town with me last week (I earned a Southwest companion pass last year so she can fly for free). We have also enjoyed other afternoon recreations that were not possible before .

I am calling this FI because I would never have had to guts to do this unless I was effectively FI. In short, everything is perfect so far. I will give an update every month or so, whether you are interested or not!

 

[cardude]

Oh man, your situation does sound good. I'm in the process of selling my business, but I don't have anything lined up to do yet to fill the void (mostly for "something to do" as my wife puts it, and not really for income).

I'm really tired of the hassle of running of my current business, and that's why I'm getting out. I don't mind going back to some sort of "work" eventually, but like you, I don't want any employees.

 

[clifp]

Congratulation Culture being your own boss seems to suit you.

One thing I don't get is how $950 out of every $1000 you bill goes to your own pocket. What about taxes payroll taxes alone I think are much more than 5%?

 

[Culture]

One thing I don't get is how $950 out of every $1000 you bill goes to your own pocket. What about taxes payroll taxes alone I think are much more than 5%?

You are 100% correct. I am referring only to administrative overhead such as HR, Accounting, MIS, rent, administrative staff, etc that I no longer have to pay for.

I still have to pay the taxes .

 

[Culture]

Of course with the solo 401(k), I expect to be to shelter $90,000 from taxes of any type, and the typical self-employment (legal) tax dodges will probably shelter another $15-20K. Nice if you can do it.

 

[maddythebeagle]

Nice thread, culture....what kind of consulting?

 

[Culture]

Nice thread, culture....what kind of consulting?

Structural/Mechanical Engineering.

 

[Dawg52]

I have a buddy who found working for himself very enjoyable and financially rewarding. He was a salesman for an office supply company then decided to open up his own company. He sells furniture to schools and Universities. Sounds somewhat limited but he is making a killing. He buys the products from the manufacturer and ships direct to his customers. He does have the hassle of collecting, but you rarely have problems with them. He started this business 8 or 9 years ago and has already brought one son into the business. In a few years he will turn most of it over to his 2 sons and will stay in touch a little, all the while making a nice living working very few hours a week.

So if you have a good idea and the know how to make it work, working for yourself can be a very good thing.

 

[Culture]

He does have the hassle of collecting, but you rarely have problems with them.

I always hated collections. I started a new policy working for myself. No retainer, no work. Since it never seems to bother any of my clients for me to front them my work, I decided that it should not bother them to front me their money. So far, not a single complaint in 28 jobs opened.