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This is a big downside to having a single income HH and even more so if the non working partner has been out of work for an extended period of time. I know from your past posting you are on top of your current expenses but I'd think long and hard before I gave up 155k. Is there any thought to legging the current job out say for another 3-5 years until the kids are all in school and the wife could gain employment? The flexibility financially that an extra 40-50k coming in could provide as well as another employer sponsored choice for insurance would be hard to calculate imo
This is a big downside to having a single income HH and even more so if the non working partner has been out of work for an extended period of time. I know from your past posting you are on top of your current expenses but I'd think long and hard before I gave up 155k. Is there any thought to legging the current job out say for another 3-5 years until the kids are all in school and the wife could gain employment? The flexibility financially that an extra 40-50k coming in could provide as well as another employer sponsored choice for insurance would be hard to calculate imo
good points.
unfortunately though, staying another 3-5 years (or 1 year for that matter) is out of the question given the current situation with the boss. The job is ending one way or another; hence me thinking this may be a good opportunity;
I also highly doubt i'd be able to get the same compensation at another firm.....perhaps 120 to 140k is more realistic....
Wife has a couple of certificates that allow her to work as a contractor; something she's not really put to use right now given the fact that she has to be with the kids constantly. that might change if i have more flexibility with my schedule and can sync my work schedule with hers so that she can make a few appointments a week, etc.
This is a big risk; no questions.
I'm just trying to see if the benefits outweigh the risks involved.
So far:
Pros: No Boss, Can manage my own schedule, Learning something new, potential for expansion and earning many times over the current 150k, less stress dealing with a similar boss, business is already established, no up front costs, mentor free and willing to help and transfer knowledge, insurance concerns seem to be no concerns at all, especially in the beginning, given what i've learned about low income family insurance costs; currently have a very low cost of living, with enough savings to cover me for a couple of years at 0 income (which wouldn't be the case), etc. etc.
Cons: the unknown, eating into savings almost immediately after making the switch, what if.....(I can't learn the subject matter as quickly as i anticipate, clientele dries up, physical injury disabling me from doing manual labor, outside in the cold, outside in the hot, very little money (i think) for the first few years, troubles involved with expanding such a business, etc. etc.), gap in IT Project Management employment on my resume should i feel the need to go back to my original industry, etc.
Just hearing from my wife who works with smaller to mid size business owners every day the idea of being your own boss or having no boss is a falsehood as your boss simply changes maybe from the guy you directly report to and instead your customers, suppliers, the IRS etc and making your own schedule also kinda falls into that as well. I love the though of working for myself, but I also love the thought of selling everything and moving to Mexico. I admire you drawing it out and doing your homework
Obviously you don't have to tell ALL your financial business, but in general....
-- Is your dad giving/passing on to you -- a given book of business, with existing clients have have contracts that are locked in for at least a year?
-- Or are you 'buying' the business?
-- WHAT exactly ARE you getting when you take over the business?
-- Will you have to pay your dad for the business or ANY compensation for the business going forward.
-- Are you leaving the current job with ANY money in hand from the company? Buyout? Golden parachute? Severance? Bonus? SOME kind of money that's a boost to income. Heck even if it's just being paid for un-used vacation or sick time that would be some extra money out the door.
-- Are you able to, willing to downsize your life and expenses to decrease financial outgo and expenses?
Do you anticipate eating into your savings at all or will be business support you (even if with tighter finances) -- but you still won't have to touch savings.
-- Also WHEN is the absolute latest D-Day on this decision?
-- And what's the WIFE say about this. Her support will be absolutely VITAL.
Obviously you don't have to tell ALL your financial business, but in general....
-- Is your dad giving/passing on to you -- a given book of business, with existing clients have have contracts that are locked in for at least a year?
-- Or are you 'buying' the business?
-- WHAT exactly ARE you getting when you take over the business?
-- Will you have to pay your dad for the business or ANY compensation for the business going forward.
-- Are you leaving the current job with ANY money in hand from the company? Buyout? Golden parachute? Severance? Bonus? SOME kind of money that's a boost to income. Heck even if it's just being paid for un-used vacation or sick time that would be some extra money out the door.
-- Are you able to, willing to downsize your life and expenses to decrease financial outgo and expenses?
Do you anticipate eating into your savings at all or will be business support you (even if with tighter finances) -- but you still won't have to touch savings.
-- Also WHEN is the absolute latest D-Day on this decision?
-- And what's the WIFE say about this. Her support will be absolutely VITAL.
I'm receiving clients and a steady stream of revenue from insurance companies that he's signed up with and has been working with (sending him jobs) for almost 15 years.
I'm not buying the business....he's just giving it all to me....making the company in my name, giving me the truck with ALL the equipment needed to do the work. I've offered to pay him a portion of the profits or pay him to buy the business, but he's refused. He says he just wants to see the company that he's built continue on, and that satisfaction is enough for him. (i will still want to somehow compensate him, once i'm established....maybe less formally, but compensation nontheless. we can cross that bridge when i get to it).
Since i'm quitting my job (in 3 weeks), i will not receive any buyout/severance/etc. I will however get about 300 hrs worth of banked vacation hours (i knew they'd come in handy...lol) which total about 15-17k after taxes....that money will be nice to have for sure.
I'm not willing to downsize my life too much because my life is pretty modest as it is (for the most part...I do drive an almost paid off 80k car though, which I will not be getting rid of. lol)...but aside from that, we are very modest, no crazy expense and we don't have any bad habits. but to answer your question a different way, yes, if i have to sell my car, i will, but that's really the only thing that is of luxury in our lives, and i have enough 'cash' not to have to worry about selling the car for at least a few year (assuming zero income for a few years...which is not realistic).
I will probably have to touch savings but not by much. the 4k/month expenses i noted is very very liberal. it includes things like home taxes, car taxes, car insurance, home insurance, etc. that are paid in 6 months increments. so, since i'll be paying all those for the next 6 months before i quit my job, my actual monthly expenses will be only about 2000-2500....at least for the first 6 months.....(i also don't realistically expect my income to be zero for the first year or anything like that...)
I'm quitting in exactly 3 weeks, so that my last day after my 2 week notice is 1/1/2018! that way, i can say on my resume that i was employed as a PM from year x to 2018. (to soften the blow of a potential gap )
My wife trusts me in the finance department and knows that i'll do enough thinking and scrutiny of the details for the two of us ten times over
Well, "good luck to you," is all I have left to say at this point.
If you're taking over an existing business your father started and is giving you, with existing clients -- unless YOU SCREW it up, or the economy tanks to an unreal level...you should be fine...only way to go is UP, and grow and expand as you have the plans for!!
Thank you all...
It's kinda scary the more I think about it...lol
The way I'm looking at it, a new regular hob I'd get, would be in the 130k range most likely. Add about 6000 for 401k contributions from employer, and perhaps about 20k savings on the healthcare front, and we are at having to make 150-160k income/profit with the business just to break even.....
Add to the mix the following, and the decision becomes tricky....
+ potential for expansion and thus making much more
+ everything set up and ready to go
-+ having to lkearn a completely new field....challenges....learning curve....
- more difficulty getting a loan or credit card when/if needed I would think.
- low incomed for 1 or 2 (or more) years
- physical work means out of work if sick or even lightly injured
- no sick leave...
- working in the cold/hot weather, as opposed to a nice comfy office...
- inability to return to my field all together after about 4 or 5 years max....as being away for that long is a death sentence practically...
But I keep thinking....if I give up on this opportunity, will I regret it and always wonder what if.....?
Thank you all...
It's kinda scary the more I think about it...lol
The way I'm looking at it, a new regular hob I'd get, would be in the 130k range most likely. Add about 6000 for 401k contributions from employer, and perhaps about 20k savings on the healthcare front, and we are at having to make 150-160k income/profit with the business just to break even.....
Add to the mix the following, and the decision becomes tricky....
+ potential for expansion and thus making much more
+ everything set up and ready to go
-+ having to lkearn a completely new field....challenges....learning curve....
- more difficulty getting a loan or credit card when/if needed I would think.
- low incomed for 1 or 2 (or more) years
- physical work means out of work if sick or even lightly injured
- no sick leave...
- working in the cold/hot weather, as opposed to a nice comfy office...
- inability to return to my field all together after about 4 or 5 years max....as being away for that long is a death sentence practically...
But I keep thinking....if I give up on this opportunity, will I regret it and always wonder what if.....?
When you put it this way...yeah, it doesn't seem so clear. You're giving up a very well paying office job for something you keep saying requires manual labor outside? This is what your FIL has been doing up until now? It's a one-man business? Since you're not just out of school yourself I'd be trying to figure out a way to make the business profitable enough that I could quickly hire on someone to do the grunt work. And ways to help the business run itself more. "being your own boss" is a misnomer - you work twice as hard because you're working directly for your customers - and with no respite if you have no employees at all. Is there the possibility of your wife helping out at all, especially as the kids get older?
One thing I don't quite understand is that if your FIL is not taking any money for doing all this I guess you're getting very limited salary until you take it over completely? You seem to be starting off at ground level and unsure you'll be able to learn everything - so are you sure you're even going to like what you're doing at all?
When you put it this way...yeah, it doesn't seem so clear. You're giving up a very well paying office job for something you keep saying requires manual labor outside? This is what your FIL has been doing up until now? It's a one-man business? Since you're not just out of school yourself I'd be trying to figure out a way to make the business profitable enough that I could quickly hire on someone to do the grunt work. And ways to help the business run itself more. "being your own boss" is a misnomer - you work twice as hard because you're working directly for your customers - and with no respite if you have no employees at all. Is there the possibility of your wife helping out at all, especially as the kids get older?
One thing I don't quite understand is that if your FIL is not taking any money for doing all this I guess you're getting very limited salary until you take it over completely? You seem to be starting off at ground level and unsure you'll be able to learn everything - so are you sure you're even going to like what you're doing at all?
Thanks for the reply.
I know I can optimize and improve thed process to be more and more efficient. After all, that is a big part of what I do for my current job....improving processes for customers, as well as efficiency.
Yes, it's a 1 man business that can be expanded to as big an operation as you want it to be! Big potential with big demand and the industry is never going away!
It's my father, not FIL. My wife will certainly be able to help later on with scheduling clients, etc and filling the roll of admin/organizer as I focus on other things.
Yes, I plan on taking a very low salary and put the rest of the income into the business....
I know I can and will learn everything....its just a matter of time. The challenge excites me and the gambler in me likes the unknown to some extent....its just that I keep thinking about the + and - items I've listed above...over and over...
Thanks for the reply.
I know I can optimize and improve thed process to be more and more efficient. After all, that is a big part of what I do for my current job....improving processes for customers, as well as efficiency.
Yes, it's a 1 man business that can be expanded to as big an operation as you want it to be! Big potential with big demand and the industry is never going away!
It's my father, not FIL. My wife will certainly be able to help later on with scheduling clients, etc and filling the roll of admin/organizer as I focus on other things.
Yes, I plan on taking a very low salary and put the rest of the income into the business....
I know I can and will learn everything....its just a matter of time. The challenge excites me and the gambler in me likes the unknown to some extent....its just that I keep thinking about the + and - items I've listed above...over and over...
Excellent points by the way. Thanks again!
You should absolutely listen to radical finance's recent podcast on the RV repairman ASAP. I immediately thought of it when I first read your post.
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