MY route toward ER- Self emplyment's been good to me so far....

[thefed]

For those who remember, I started up an air duct cleaning business 1 year ago today. I made up some projections (lofty) at the time based on some very detailed/astute research. Well, I have exceeded my year one goals by 20%!!

I also started a handyman business about 4 months ago which is doing very well. It's been performing MUCH better than expected.

I also bought and rehabbed 2 homes...one is rented bringing me a nice cashflow each month and the other is on the market for 100% more than I have into it....


I also quit my 9-5 day job which many of you heard me griping about...it's been about 10 weeks and all is well. I have more time to focus on the businesses....I'm planning on taking an elevator to the top this year---- my goal is to STAY focused and turn this into a self sufficeint operation....we'll see.

I am only 23 but I feel like I'm racing the clock and losing. It's a good feeling though, because when I looka t the whole picture, I see that I'm not doing so bad at all. The GOOD thing is that I've been able to spend a LOT of time with my 18 month old son and my fiance. She hated her j-o-b, and I agreed to let her have a few months with the boy to see what a stay-at-home mom feels like. She LOVES it, but she misses the extra income....I think she'll soon be watching a few kids here during the day to keep the $$ coming in for nails and shopping LOL. But I feel great being able to help her do what she wants (which is spend all day with our son).


Thanks for all the input on my 2 business, RE investing, and j-o-b over the last year...it all helped greatly.

 

[macdaddy]

Sounds great... just remember to "pay yourself first" and keep socking away as much money as you can. One problem I have with being self-employed, is the tendency to never take out a salary for myself, and leave all the cash in the business where it ends up getting spent on something else.

 

[thefed]

Sounds great... just remember to "pay yourself first" and keep socking away as much money as you can. One problem I have with being self-employed, is the tendency to never take out a salary for myself, and leave all the cash in the business where it ends up getting spent on something else.

bingo! that's why I feel im losing the race that i appear to be winning....

 

[youbet]

I also quit my 9-5 day job which many of you heard me griping about

Actually it sounded more like whining, crying and bitching...... but......details, details.....

Congrats and glad all is working out!

Keep things in perspective. Compared to most, you have it made.

 

[brewer12345]

That's great, thefed. I was just wondering how you were making out the other day.

 

[maddythebeagle]

I was wondering about you also....glad to hear things are well....

 

[Outtahere]

Sounds like you made the right move for yourself, congratulations.

 

[BUM]

Way to go thefed! Over 20 years of self employment got me to ER.

Four things come to mind:
1. As said above, Pay yourself first. Not just via payroll, explore SEP plans and other perks.

2. Don't get hurt. Put skydiving and bungeejumping aside for now. Stay healthy.

3. Save, save, save! You won't have an early-out package or pension. You'll need enough cash to pay for health insurance until 65 or so, not to mention all the fun stuff you'll want to be doing when you pull the plug.

4. From the outset try to make your business into something someone might buy. That could shave a few years off your ER timetable, when you need them the most.

Good luck kid!

 

[bow-tie]

Great to hear things are rolling along for you.

 

[thefed]

THANKS FOR ALL THE POSTIVE COMMENTS!!

 

[Brat]

Fantastic. I second the suggestion of a SEP. You need to set one up before the end of the year if you have any hope of using some of this year's profits to set money aside.

When you marry maybe your wife could keep track of the business income and expenses, easy to do during nap time. Put her on the payroll and establish a SEP for her too.

It is so easy for a new family to spend a lot on stuff. Before you tie the knot sit down together and develop a spending plan with goals - maybe 2 year, 5 year, and 15 year targets. You will soon see if you have the same economic values.

 

[brewer12345]

Actually, I would do a solo 401k if I were thefed, but whatever the vehicle: stash it away.

 

[KB]

Glad to hear things are still going well. I was wondering how it was going after leaving the j*b.

 

[thefed]

ive been up in the air about the sep or solo 401k. tright now im only dumping $$ into a roth ira, so that i can, if need be, pull the $$ out in the event of an emergency, penalty free.


What's the key oints/differences between the SEP or solo 401k (moreso, why do YOU think one or the other is more advantageous?)

Thanks

 

[brewer12345]

The solo-k lets you Dump up to $15k in right away - up to 100% of your first $15k of earnings. Above that, IIRC you can toss in 25% of additional earnings. You can also set up a solo-k to allow yourself to take loans from it, just like a 401k. I don't believe you can borrow from a SEP and you can't do the first dollar up to $15k thing.

 

[Brat]

Good point Brewer. DH had a solo 401k when we started our saving and it has all the features you mention. I thought that the administrative costs today outweighted the benefits. IRS audits them frequently so it is important not to talke liberties, we walked the straight and narrow so came out smiling but IRS audits aren't fun even for the saintly.

 

[brewer12345]

Good point Brewer. DH had a solo 401k when we started our saving and it has all the features you mention. I thought that the administrative costs today outweighted the benefits. IRS audits them frequently so it is important not to talke liberties, we walked the straight and narrow so came out smiling but IRS audits aren't fun even for the saintly.

Solo 401k's are pretty de rigeur these days. Fidelity made it easy and cheap. No IRS worries that I can see.

 

[My Dream]

I think a lot of us were wondering how you made out. Glad to hear you're happy, that's the main thing. Self employment has it's up's and downs, just don't let it take over your life.

Keep in touch.

 

[TromboneAl]

Remember to take advantage of all the benefits that the govment gives to businesses. The main ones that I used:

1. Use SEP-IRA to save tons of tax-exempt money (then convert to Roth).

2. Have a company medical plan to deduct all medical and health insurance payments.

These work best if you have no employees.

 

[thefed]

Remember to take advantage of all the benefits that the govment gives to businesses. The main ones that I used:

1. Use SEP-IRA to save tons of tax-exempt money (then convert to Roth).

2. Have a company medical plan to deduct all medical and health insurance payments.

These work best if you have no employees.
[/quote

an the advantage o going into a sep, then rolling to a roth?

as far as a company medical plan, what companies offer guidance in setting something like this up?