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Go It Alone


Go it alone - self employmentHave you ever wanted to be your own boss? Did you dream of starting your own business when you were young? If you are not self-employed now, what is stopping you? Is it not the right time? The timing is never perfect, but at some point in your life, the opportunity to go it alone will surface. I’ll share some stories with you today.

Someone who made it

One of my college roommates started his own business immediately upon graduation in the mid 90s. John started an ISP company to service the college town where we lived. In those days, it took just a T3 line and a modem bank in an office at a strip mall. He did this for a few years and then branched out into ecommerce.

The company had an IPO and the stock went up for a while since anything that had the word ‘ecommerce’ attached to it was doing well in the late 90s. After the dot com bubble, the stock value dropped to almost nothing, but John continued to work on his company.

Eventually he left the start up, but the IPO process gave him an invaluable connection. He kept in touch with the venture capitalist company and subsequently became friendly with them. John then worked with the venture capitalists and helped started another company. He fully joined the capital side of the equation and this was when he hit his stride. My old college buddy is now snowboarding up in Tahoe every day and is financially independent. John is the only one I know from college who has that kind of freedom. All my other friends are working for someone else and while they are doing very well, they don’t have that kind of freedom. Guys who worked at Yahoo, Microsoft, and Cisco in the mid 90s are still working for someone now.

I’m not saying everyone who went out on their own made it rich. Other friends also partnered with John at his ISP/ecommerce company, but they eventually went to work for the big companies. A start up life is not for everyone.  It wasn’t easy for John to work 80 hours/week barely making rent for years while all his friends were making good salaries, buying houses, and taking international vacations.

tahoe fresh powder

Buddy, I don’t really need the Tahoe fresh power report. 😉

What about Joe?

The best time for me to go it alone was at the same time John started his own business. I did not have any student loans and my belly was full of fire. Why didn’t I join John in his venture? Unfortunately, I had to work for a big company because back then, I was an international student who needed a sponsor for the H1 visa. I needed to get my permanent residence status to stay in the US. After 5 years, I received the permanent residence status, but by then I had a house, a wife, two cars, two cats, and bills to pay. The paycheck was fat and the work was important. I actually liked my job because I was making real contributions to current and future technologies. It’s not an exaggeration to say that you probably have used a product that I helped to develop during my engineering career. A lot changed in 5 years and I became dependent on my salary and my employer. The window of opportunity to strike out on my own was closed, but it’s not permanently shuttered.

Fast forward to today. I’m still making important contributions, but now I know I am just a cog in the machine. If I leave the company tomorrow, there will be someone else to work on whatever I’m doing. I’m not willing to work long hours anymore and I care less and less about the latest version of the same product. My motivation has changed. The window of opportunity for taking off on my own is opening again.

go it alone

Mrs. RB40 go it alone on the Great Wall at Simatai.

Blogger friends

Now, let’s look at my blogger friends who want to take the reins of their destiny, and the different phases that they are in.

Nothing to Lose – This is the time when you don’t have much to lose. This is when you are just starting out and willing to work your ass off. Corey at Passive Income to Retire fits in here. He is working on his Master’s degree while working full time job with a small salary and blogging like a mad man on his online business ventures. Personally, I think this is the best time to start a business. The major downside is the lack of capital in this phase.

Not much to lose – This is when someone has a job that is not fulfilling either mentally or financially. Kevin at Invest It Wisely recently quit his job and is planning what to do next. His pay stagnated over the last few years and the future of his company is in question. Many of his friends already left the company so he is not losing much by going out on his own. He is still in his 20s and has a lot of drive and energy. He saved up some cash and should be able to pay the rent for a while during the start up phase of his businesses. I’m sure Kevin could have gotten another job with more pay and in a year or two, it would have been much more difficult to let go of that steady paycheck.

A lot to lose – This one is the most difficult of all. Some people have a great salary, like what they do, and enjoy working with their coworkers and friends. Financial Samurai is currently struggling with this dilemma. It gets harder the more you make. He is very entrepreneurial, but can he give up all these things? Personally, I think 95% of people with entrepreneurial dreams are stuck, unable to fully pursue their dream given so much is at stake. Life is good, why give it up to work like an insomniac mad man, getting paid diddly squat?

A lot to lose, but need to go – I am in this position right now. We have a very comfortable life and leaving my day job will be an upheaval. Sure, we have been living only on Mrs. RB40’s salary and saving my paycheck for almost a year now, but it still won’t be easy to give up my six figure salary. That is a lot of money to lose, but I really have to go. I feel like this is my last opportunity to strike out on my own. I can stay at my company and do average work for 10 more years and we will continue to have a comfortable lifestyle, but at what price? I need to see if I can stand on my own and like many readers know, I don’t like the job much anymore.

To me, striking out on your own is like bungee jumping or skydiving. If you have tried either of these, you know there is a point where you have to jump or back off. The first step is the most difficult and the rest is never as quite as bad as you imagined. What about you? Have you thought about working for yourself, but the timing has never been right? When would be the right time to do it? This post is much longer than my usual and if you made it to the end, I would love to hear your thoughts.

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Joe started Retire by 40 in 2010 to figure out how to retire early. He spent 16 years working in computer design and enjoyed the technical work immensely. However, he hated the corporate BS. He left his engineering career behind to become a stay-at-home dad/blogger at 38. At Retire by 40, Joe focuses on financial independence, early retirement, investing, saving, and passive income.

For 2018, Joe plans to diversify his passive income by investing in US heartland real estate through RealtyShares. He has 3 rental units in Portland and he believes the local market is getting overpriced.

Joe highly recommends Personal Capital for DIY investors. He logs on to Personal Capital almost daily to check his cash flow and net worth. They have many useful tools that will help every investor analyze their portfolio and plan for retirement.
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{ 142 comments… add one }
  • 20's Finances February 13, 2012, 4:29 am

    Great post Joe! I can’t wait to read your “I quit my day job” post. I have no doubt that you will be able to do it. Good luck letting go of that kind of salary.

    • retirebyforty February 13, 2012, 9:14 am

      Thanks Corey! I’m working on it. 🙂

    • Financial Samurai February 13, 2012, 9:51 am

      Just wondering, why bother doing a Masters Degree if you plan to quit your job? I think you mentioned your employer paying for it though right? If so, you don’t have to stay on board for X amount of years?

      • David @ VapeHabitat August 1, 2018, 6:03 am

        Agree. I think education is overestimated at the moment. You just need a 6-12 months course of something you like to become a middle specialist to earn around 60-80K/year

  • Money Infant February 13, 2012, 4:32 am

    I was in the same spot as you Joe, lots to lose, but had to get out. My salary wasn’t in the 6 figure range, but I definitely gave up the security of a steady paycheck when I cut my ties with the corporate world and struck out on my own. And guess what? We couldn’t be happier.

    • retirebyforty February 13, 2012, 9:14 am

      I keep hearing the same from people who left the corporate job to become their own boss. I know it’s not easy, but I’m glad to read about success stories.

  • YFS February 13, 2012, 4:56 am

    I’m in the Financial Samuari camp. I like my job, make a great salary, love my coworkers and to give all that up for a start up is just too much of a opportunity cost. I can only consider leaving my job if I’m matching my salary (after tax) from other sources.

    • retirebyforty February 13, 2012, 9:15 am

      It’s a difficult position to be in. Too many choices. 🙂

    • My University Money February 14, 2012, 5:41 am

      Ya, this is where I am as well YFS (although, I make much less than Sam!). My thought process is more like Mike’s from TFB where he is managing a pretty large blogging empire while maintaining his regular job, all in the name of building up a nice nest egg of passive income. I have recently starting thinking about the benefits of taking a year sabbatical in a couple of years and doing the whole cheap travel while blogging thing that some PF bloggers make sound so attractive.

      • retirebyforty February 14, 2012, 9:51 am

        You know he is single. Once he get married and have children, it will be a different story.
        Travel blogging sounds nice, but I don’t know if I can really keep up blogging while I’m having fun like that. 🙂

  • Drew @ Epicfinances.com February 13, 2012, 5:12 am

    I want to do my own thing more than you can imagine. If the right idea and opportunity comes along I would love nothing more than to be my own boss.

    I am okay with losing some of my pay, but I want to be secure. I literally think about this subject virtually every single day. Great post

    • retirebyforty February 13, 2012, 9:17 am

      Thanks! Don’t pass up any opportunities.

  • Michelle February 13, 2012, 6:29 am

    I definitely want to be on my own soon. I’m on that path at my current job, but I don’t know how long this will take.

    • retirebyforty February 13, 2012, 9:17 am

      Good luck! It’s not easy to build up the saving, but I’m sure you can do it.

  • Financial Samurai February 13, 2012, 7:13 am

    Howdy Joe,

    Thanks for sharing the various stages of going at it alone. One can look at the examples and say, “It’s a no brainer to do so while you are young.” But, when I was young, all I wanted to do was prove my stripes, work at a great company, learn, and build my savings! I couldn’t do that at some random start-up.

    After 13 years, I started telling myself, OK, let’s try and work and make it a nice 15 years and then do my own thing. If you save 50-70% of your after tax income for 15 years, you’ve got about 20 years of living expenses covered.

    Now, I am itching to do something else. It’s important people don’t quit though if they’ve been with a firm for a while. Get laid off!


    • retirebyforty February 13, 2012, 9:19 am

      You got a good point. The industry you’re in makes a big difference. In the Tech. industry, it’s much easier to jump right into a start up. I hear you about getting laid off, but it is a lot more difficult that quitting.

      • Invest It Wisely February 13, 2012, 6:31 pm

        Sam, the problem with getting laid off is that you have to be a low performer (or grossly overpaid for what you do) for it to happen to you. If neither happen, why would the company let you go? You could slack off, but why waste your life that way?

        • Invest It Wisely February 14, 2012, 5:02 am

          Read this again and thought it was unfair to contract workers. Those guys can be really good and still shown the door. Still, it sounds like you are too good to get a layoff, Sam, unless your compan.y completely hits the rocks

  • Financial Samurai February 13, 2012, 7:16 am

    Joe, was there any catalyst to make you think this way (going alone)? Or has it just been building up?

    How will you know exactly WHEN to leave?

    • retirebyforty February 13, 2012, 9:24 am

      I always thought about being my own boss and it has been building up. You are right that the job gets less exiting as time goes on and that also contributed. I think the real trigger was when my previous manager got fired right before Christmas 2009. I knew that the corporation is all about dollars and cents, but that event made a big impact on me.
      Have you gone skydiving or bungee jumping? If you haven’t, you should try it. Leaving take longer than one step, but it is still similar to me.

      • Simple Rich Living February 14, 2012, 6:31 pm

        I am sort of in your boat regarding the work situation. I am craving to leave to do something else but I need to figure out the ‘what’ first. I happened to have tried skydiving. It took me a while of get out of the plane, particularly the first time on my own. The 50-60 seconds free falling was absolutely thrilling!!! Fortunately I landed safely each time. Not trying to be downer, however, the reality is that there is the possibility of crashing and burning, in the literal sense. I, too, also want to have financial security hence I still haven’t left my job. Though, just like you, the itch is building up for me.

        • retirebyforty February 15, 2012, 3:21 am

          That’s great to hear. At least you have some time to shore up your finances while you explore. Be sure to keep your eyes open for any opportunities and don’t pass anything up. Good luck!

  • Daisy February 13, 2012, 7:24 am

    I’m probably the only PFer that has never had the desire to work for myself. I just don’t. At all. I love being able to leave work at work, and come home to do the things that I like (or have) to do. I’ve never seen somebody who works for themselves that can do that. I also love getting paid every two weeks, I love having balance in my life. I love that I connect with my co workers and pay into pension so I can make it work for me later on.

    But that’s just me. You’re brave! I wouldn’t be able to leave six figures.

    • retirebyforty February 13, 2012, 9:26 am

      Thanks for your input. I think it’s perfectly valid to work in a corporation and enjoy the benefit. Most people are very happy with that. I’m sure there are many self employed people who’d rather work in a secure job too.

    • Steve February 13, 2012, 2:14 pm

      It does seem that every PF blogger out their is either entrepreneurial or at the very least believe in some form of side hustle. Maybe it’s just because a blog is, for many, that business or side hustle – a bit of a self selection bias.

      Personally, I am not very interested in either. When my wife and I signed our mortgage papers a few months ago (our first house purchase) I felt slightly more trapped. Yet, I would rather have a day job than throw the dice at starting my own company. Someday when we have enough money to cover our expenses indefinitely (which will be well before normal retirement age if all goes well) maybe I’ll found a tech startup just for fun and the chance to strike it rich. But until then I’m happy to be part of a team, let my employer take the risk, and sock away one of our household’s salaries.

      Good luck Joe and I too look forward to your I QUIT post.

  • cashflowmantra February 13, 2012, 7:31 am

    Great post with good examples. I am in the lots to lose camp and probably even more so than Sam since I have 8 mouths to feed. I want to get a few more things taken care of but do have a dream that I would like to pursue. I am thinking that in about 6 years I might be in a position to go for it.

    • retirebyforty February 13, 2012, 9:27 am

      I don’t know what you can do with 8 mouths to feed. Hopefully they can all get scholarship for college.
      With your income and investment, you are ahead of many people. Good luck!

  • krantcents February 13, 2012, 7:34 am

    It just seems that the first step is the biggest! There will be many moments of anxiety along the way after you go out on your own. Did I make the right choice? Was it worth it? Those feelings come up every time something does not go as planned. It takes about a year to feel comfortable. Is it the same for everybody? No, but it does take a while. Think it through and develop a plan B. The other side of this is, you will devote more time to your passion and there will be many more successes vs. failures. It is a mixed bag at best.
    The length of the post is less important to actually saying something. I think it worked just fine.

    • retirebyforty February 13, 2012, 9:28 am

      Thanks for your input. One year sounds about right to me. I really appreciate the input of someone who has been through it.

  • Aloysa February 13, 2012, 7:53 am

    Great article! I would love to be on my own but I am in that camp when the opportunity cost is just too high. I cannot leave my job, great paycheck and benefits. Too many people depend on me and my paycheck. And I do like what I am doing. It is tough.

    • retirebyforty February 13, 2012, 9:29 am

      It is a difficult decision and that’s why I said 95% of the entrepreneurs can’t leave their job. That’s why I’m sitting in my little gray cubicle right now. 🙂

  • Dollar D @ The Dollar Disciple February 13, 2012, 7:53 am

    I’m was in one of the first two categories when my wife was working. But she put in her two weeks notice last week and very soon I will be the sole breadwinner (though she will still work part time as a freelancer).

    We’re taking a gradual approach to “going it alone.” We’re developing our freelance business on the side and some day it will pay all the bills but for now we can just invest the money.

    • retirebyforty February 13, 2012, 9:31 am

      Good luck! It is essential to have at least one stable job at the beginning right? My wife will keep working while I explore self employment.

  • frugalportland February 13, 2012, 8:27 am

    wow, good luck. my friends and I have had this talk, and you’re right, the more you make, the harder it is to leave. HOWEVER, you’re itching to go, and you’ll regret it if you don’t. best wishes!

    • retirebyforty February 13, 2012, 9:31 am

      Thanks! It is getting more and more difficult to come in to work every Monday. 🙂

  • CultOfMoney February 13, 2012, 8:42 am

    RB40, I would consider what are the potential upside gains at this point vs. the risk of failure. Risk and reward are linked, but many people take on more risk than they need to for a given level of reward. I would make sure that you’re not taking unnecissary risks in whatever path you may choose. Perhaps the risk is in being unhappy where you are, maybe it is the financial risk of loosing a good income. Like Morpheus said in his phone call to Neo, you take a chance either way, the choice is yours.

    • retirebyforty February 13, 2012, 9:35 am

      The upside is my sanity. 🙂 I really doubt that I can make 6 figures working for myself, but I think life will be much better. Thanks for your suggestion.

  • SB @ One Cent at a Time February 13, 2012, 8:44 am

    I am in this eternal dilemma. Until a couple of months ago I was waiting for permanent residency. I no longer needed an employer but, I love what I do. What kind of venture you are looking at? Your kid still needs a lot of attention, will you be able to put in 80 hrs or more a week?

    • retirebyforty February 13, 2012, 9:37 am

      No, I won’t be able to put in 80 hours/week. It will be very difficult until he goes to school. The prudent thing to do is to keep working and saving, then go out on my own when he starts school. You can’t always do the prudent thing though. Is it safe and prudent to go skydiving and bungee jumping? Not really.

  • Marianne February 13, 2012, 8:55 am

    I never realized how many opportunities I was missing out on by working my butt off at my job until I went on maternity leave. I’ve always been entrepreneurial but I was so burnt out by working for my employer that I didn’t have the time or energy or even ambition to pursue anything outside of my job. Now that I’m at home I’m absolutely bursting with ideas and doing them all! It’s so much fun! I’m not making what I make at my real job with any of my extracurricular activities but having my mat leave benefits has enabled me to take chances that I might not have otherwise. It’s been a very cool experience and I’ve certainly learned a lot!

    • retirebyforty February 13, 2012, 9:39 am

      Are you going back to your job after the maternity leave? I took 3 months paternity leave when our baby was born too. It gave me time to start this site and be with the little guy. Today is his birthday! 🙂
      I know what you mean about being burnt out. I feel like my brain is always in a haze, it’s not healthy.

      • Marianne February 13, 2012, 9:49 am

        Yes I will be going back to work soon but doing some different stuff that will free me up to only go into work for about 20 hours a week and do the rest at home after my son’s asleep. Fabulous opportunity that I will blog about as soon as everything’s firmed up. I will be able to continue doing some of the things that I started to earn extra money while I’ve been off too. (Like the following: http://www.preservingpennies.blogspot.com/2012/02/how-we-earn-extra-money-teaching-piano.html)
        I think with our next kid I will split a bit of the leave with my husband so he can experience a little bit of extra freedom. Unfortunately, this baby was born at the wrong time of the year to allow my husband to take time off with him (his job is just picking up now so it wouldn’t be super smart for him to take leave now).
        Happy birthday to your little one!!

        • retirebyforty February 13, 2012, 3:23 pm

          That’s great! I’ll look forward to hearing more details. 20 hrs/week is not bad at all.

  • Everyday Tips February 13, 2012, 8:59 am

    I too keep waiting to read your “I Quit!” post.

    I gave up a pretty sizable salary when I quit in 1999. However, it was the best thing I ever did, and we did just find without the money.

    Since I am older than you, I will provide sage advice. 🙂 Quit before your financial commitments are too great and you almost cannot go it alone. It is so exciting and motivating to see how great our ‘coworkers in blogging’ are doing!

    • retirebyforty February 13, 2012, 9:43 am

      Thanks for stopping by Kris. Our financial commitment were too great, but we cut back a lot over the last few years.
      There is still hope for anyone willing to make a sacrifice. I agree about our coworkers. 🙂

      • Everyday Tips February 13, 2012, 6:32 pm

        Your low monthly expenses put me to shame every single month! 🙂

        • retirebyforty February 13, 2012, 10:05 pm

          Well we only have one kid. Hopefully his expense stays under control.

  • Roshawn @ Watson Inc February 13, 2012, 9:33 am

    I think this post will resonate with so many. First, I think that most people are “trapped,” but they certainly don’t have to be. It’s a matter of choice to position yourself to take advantage of such opportunities. I think people should have a 5, 10, 20 year plan and allow for the fact that they will be different at different points of their lives. While something may be meaningful to a 20 year old, it may not be as important as a 40 year old, and vice versa. Thanks for painting the pictures for us. Great post!!!!

    • retirebyforty February 13, 2012, 3:21 pm

      I like your 5, 10, and 20 years plan idea. Life is strange though and I didn’t foresee this 10 years ago.
      5 years is much easier to plan for. So many things can change.

  • Thomas - Ways to Invest Money February 13, 2012, 9:34 am

    I enjoy what I to so my problem is not money or career choices but rather freedom. I hear a lot of people making 6 figures and it would be great to do so for several years but the hours most of my friends are working just doesnt add up to much after you divide what they make by how many hours they work. My ideal situation is making money working a little as possible and the hours I want. Seems like everyone is in a different situation but someone has probably been in that situation before as well. Nice post.

    • retirebyforty February 13, 2012, 3:22 pm

      I know what you mean. The hours and the stress are not worth it.
      Sometime people convinced themselves that they like their job, but they really just like the paycheck.
      Not saying that you do that. 🙂

  • Evan February 13, 2012, 10:20 am

    I don’t know if I’ll ever be able to do it, without the right kind of push (i.e. layoff/getting fired). You use the word “business” and “company” so generically…what are you thinking about starting?

    • retirebyforty February 13, 2012, 10:24 pm

      I know what you mean about the right kind of push. Life is good, why make a change right?
      Does it matter what kind of business? As long as we can provide for the kid, we’ll be all right. My ideas are strictly small times and probably won’t generate a 6 figures salary.

  • Andrea @SoOverDebt February 13, 2012, 10:30 am

    I was definitely at the “a lot to lose, but need to go” point when I left my job. It’s not that I was giving up such a huge salary, but more that I was giving up on the plan to find another job in my field. In 7 years of employment, I worked for 5 companies. The money was horrible, the work environment was horrible, and the only thing that held me there was thinking, “This is what I went to school for; this is what I’m supposed to do.” When things got so bad I couldn’t have paid my bills without freelance income, I thought, WHY am I doing this to myself?

    I know I’m in for a rough year. This month in particular has been pretty crappy income-wise. But I have never thought, “Maybe I should go back to work.” Never regretted my decision even though I jumped much sooner than planned. I’m just even more determined to make this work. People have mentioned the difference in my mood and stress level – even people I don’t see very often. I never knew I could enjoy life this much without being retired! I have been able to spend tons of time with my family and my son, despite working more/harder than I ever have in my life.

    It’s scary. I won’t lie. But it’s the most glorious kind of scary you’ll ever experience. Some people have no desire to go it alone, as evidenced by the comments so far. But some of us have that itch, and it just gets worse whether or not you scratch it. I say you should get things in order and live your dream. The worst that can happen is you have to go back to a “real” job. But I’m here to tell you, it won’t happen if you’re sure self-employment is what you want. You’ll work harder, take on things you never thought you’d want to do, WHATEVER IT TAKES so you can achieve the type of happiness that some of us can never get from a 9-5.

    Good luck, Joe. I look forward to seeing where you go from here. And for the record, when I bungee jumped, I stepped off the ledge the instant the guy told me to go, with no hesitation, and I never looked back. My only regret was taking the “safer” option of the harness around my waist instead of around my ankles. 🙂

    • retirebyforty February 13, 2012, 4:10 pm

      Great reply. 😉
      I really appreciate your perspective since you just made the jump. I am scared. It will be a big change and I know sometime working for yourself is extremely difficult. My dad has always been an entrepreneur and I have seen the ups and down.

  • bax February 13, 2012, 10:32 am

    Is your job not interesting, not fulfilling, not in line with your moral compass? I’ve been reading some interesting stuff about acting like an entrepreneur within a corporate structure.

    In other words, If you’re going to quit, why not take a chance on getting the dream job within your current structure?

    • retirebyforty February 13, 2012, 4:23 pm

      None of the above. It’s just not what I want anymore. It’s hard to pinpoint, but I don’t like working for the corporation at this point.
      I like the paycheck. 🙂

  • [email protected]'s Plans February 13, 2012, 10:33 am

    I, too, am waiting for the IQuit post. It is scary to venture on your own, but you and your wife have already proven that you can survive on her income. What is the worst that can happen if you strike out on your own? It sounds like you will be able to reenter the corporate world should you want or need to. You’ll regret not doing it soon.

    • retirebyforty February 13, 2012, 4:24 pm

      Thanks for your comment. I don’t want to look back 20 years from now and said to myself – I missed another opportunity.
      Life is short.

  • Bruce February 13, 2012, 10:36 am


    I have been only following your blog for a about a month or two, but I was in a similar situation. The difference was my engineering career wasn’t moving forward, it seems the hours and travel just kept increasing, and after a couple of kids, It was ripping us apart. (Un)Luckily for me the economy kind of put a damper on my billable hours and I was laid off. Its not like I didn’t know it was coming, big projects in the pipe were geting cancelled, so for the last year of my employment, I was fully pulling a 4 hour work week, trying to build up my online business before the inevitable happened.

    Needless to say, I have been out 2 years, and there has been great top of the world times,nightmare nights, and more than once that I polished up my resume… But I am still kicking at it, every dip makes me smarter and every rise brings along a great deal of awesomeness.

    But you will surprised, about how much better life is. Today the kids were sick, so I stayed home in morning built some star wars lego with the little guy, and this afternoon I am kicking it out here in the coffee shop. A win win.

    My advice to engineers leaving
    1. Make sure you take some of those really good engineer pens and pencils, when you are out, you will not be able to bring yourself to waste your cash on them.
    2. Consider doing a bunch of credit card churns… not to use it, but when you go to the bank as a new entrepreneur they are less than polite. Its better to have that money waiting for you… and why would I need that much credit… well.. when the opportunity hits, it will take a lot of fast cash —
    3. Make a commitment to be open, I am having a hard time doing this one, by this I mean you have to go and build your own community of startups — this is key

    • retirebyforty February 13, 2012, 4:29 pm

      Thanks for your input Bruce. I really appreciate an engineer’s input.
      I really want to spend more time with my kid and that’s one big reason why I’m contemplating this move.
      2. I only have 2 credit cards right now. Maybe it’s time to open a few more accounts.
      3. I need to follow up with you on this. I’m trying to network with other local bloggers and meet more self employed people in general. It’s not easy for me though, I am not the most social person.

  • BE @ BusyExecutiveMoneyBlog February 13, 2012, 11:39 am

    RB40, one of the most powerful posts I’ve ever read. I sounds like this decision will be one that you’ll always point back to later on in life. Personally, im in the ridiculous amount to lose category and like CFM commented, i have mouths to feed. i reconciled that my day job is a means to an end. i am funding my future with it and this will get me to financial independence the fastest. It also is allowing me to pursue passive opportunities. I envy the leap you are about to make. Can’t wait to read about it.

    • retirebyforty February 13, 2012, 4:34 pm

      Thank you! It took a lot of work and I’m glad you enjoyed it.
      I think your way is valid too. Everyone will have to find their own path through life.

  • Jeff @ Sustainable Life Blog February 13, 2012, 12:02 pm

    Like many others joe, I wont be surprised when an I quit my job posts comes through my rss – it seems like you are adequately prepared for it and have been preparing for this for at least 1 year, so that is something you’ve got going for you. Good luck!

    • retirebyforty February 13, 2012, 4:34 pm

      Thanks Jeff. It’s true that I am more prepared now than previously. It will help ease the transition tremendously.

  • John | Married (with Debt) February 13, 2012, 12:39 pm

    Great post, Joe. I share your mindset about retirement. It frees us to pursue our interests or to help others. These are noble goals.

    • retirebyforty February 13, 2012, 4:34 pm

      Thanks John.

  • Jeffrey February 13, 2012, 12:45 pm

    Joe, while I think you certainly stand to lose something financially, I think the benefits of working for yourself could very well outweigh the downsides of leaving your job. It seems like you’re destined to make it happen, and it only seems to get harder and harder the longer you wait for things like this.

    Best of luck making your decision!

    • retirebyforty February 13, 2012, 4:35 pm

      I envy your youth. 😉
      It does get harder and harder. Thanks!

  • Marissa @ Thirtys Six Months February 13, 2012, 1:56 pm

    1) great post.
    2) I live/love the entrepreneurial spirit. I think the lessons that can be learned working for yourself is beyond any other work experience out there.
    It’s funny because I am in the middle of writing a post for one of the national papers here (canada) about the same topic. It seems that the number of Gen-Y choosing self-employed has grown exponentially, as it should. I, also, think that the lack of perfect options in terms finding positions for well qualified candidates has dwindled thus causing some to explore other routes.

    All in all, I would take this leap in a second provided that I am fully prepared for it.

    • retirebyforty February 13, 2012, 4:36 pm

      Thanks Marissa. Let me know when your post come out.
      Like I said in the post, the leap is never as difficult as you imagined. 🙂

  • Denise @ The Single Saver February 13, 2012, 1:59 pm

    If you can live off of your wife’s salary, and you have a decent emergency fund saved up, then I think you have nothing to lose by taking the plunge. If you are nervous, take another 6-12 months to really plan and then take the leap. Personally, I am working on a 2 year plan when i, too, hope to take the plunge. For me it is a little harder without a 2nd person’s salary to help out. GOOD LUCK!

    • retirebyforty February 13, 2012, 4:37 pm

      Thanks for your input. I think being single is not a bad spot to be either. You don’t have to support a kid or anything. You can always move back to your parent’s basement right? 😉 Good luck to you too!

  • Invest It Wisely February 13, 2012, 6:37 pm

    Hi Joe,

    Leaving my company was definitely not the easiest decision. The fact that some friends had left did make it easier, and the fact that the company was (and is) sinking made it easier, but I had many memories from being there for 7 years and had built up relationships with many people there.

    That said… I believe people exaggerate the differences. People are afraid of the unknown, but the truth is, a job is an unknown too. Who knows what will happen in the next five years? Even government jobs are not as secure as people one thought them to be.

    If you have savings, then you have time. If you have time, then you can experiment. The real risk is that of regretting the choices that you did not make, because you were too afraid to look in the dark and realize that there is no bogeyman there, after all. 😉 In this day and age with internet businesses, it takes almost no capital to get going, only time, and if you’ve been saving diligently then you can learn to make do with less, in order to pursue your dreams. It is definitely a different feeling, and sometimes I get that knot in my gut and I might not yet be working as hard as I should, but I felt good after working the weekend on writing an app of my own.

    At the end of the day, I am treating this like a self-directed job with the chance to gain experience in the areas that I want to gain them in, so I will be that much more valuable and skilled should I choose to work for another company at one point in the future. It’s not a permanent decision, and you can make entrepreneurship part of your career.

    Great post, Joe, and thanks for sharing and including me. 🙂

    • retirebyforty February 13, 2012, 10:08 pm

      Thanks for sharing Kevin. I admire your courage to go out on your own.
      When I was in your similar position (@7 years), I got another job instead.
      I don’t regret doing that, but this time I will do something different. 😉

  • Invest It Wisely February 13, 2012, 6:44 pm

    P.S. Regarding “The first step is the most difficult and the rest is never as quite as bad as you imagined. ” the hardest part so far was bringing my boss into a room and breaking the news to him. I really liked the guy, and seeing the look on his face was hard to bear. Still, it had to be done. Everything since then has been smoother, and things are getting better as I am adjusting to this new routine.

    Also, reminds me of when I started skiing for the first times of my life a few weeks ago. Man was I scared when I didn’t know how to turn or stop! I went out of control a few times… but as you gain experience, you gain confidence, and then it can be a lot of fun. I have never gone sky-diving or bungee-jumping, but I imagine it’s much of the same. At least with skiing there’s less chance of something going wrong — a bungee cord can always break ;).

    • retirebyforty February 13, 2012, 10:09 pm

      Heh heh, that part won’t be difficult for me at all. I have had some really good bosses that I would hate to let down, but I don’t mind walking out on my current manager.
      Bungee and skydiving was a once in a lifetime experience, but now that we have a baby, I won’t do it again.

  • Paula @ Afford Anything February 13, 2012, 10:38 pm

    I’m in the opposite boat. I struck out on my own years ago, and I’m in that frustrated position right now …. working my butt off and earning a decent-but-not-impressive income, but with a ton more work, added uncertainty, and no benefits.

    Sometimes I think about returning to the employee world. I get jealous of people with paid sick days. But then I think to myself: could I really return to a system in which I have to “ask” for time off, and I can’t make my own schedule? The flexibility of setting your own hours is addicting.

    Long story short, I don’t know what I want. The grass is greener no matter which side of the fence you’re on.

    • retirebyforty February 14, 2012, 9:50 am

      Thanks for your input! I want to hear from as many people as possible.
      I hope I can avoid that grass is greener on the other side situation, but who knows…

  • J$ February 14, 2012, 7:15 am

    Love it bro!! You kept my A.D.D. attention the entire time – way to go 😉 And I hope you do what’s right for you too here soon! I know the feeling of wanting to go “All In” like that – it’s an exciting time in life! Holler if I can ever help out with anything, you know I got your back 🙂

    • retirebyforty February 14, 2012, 9:52 am

      Thanks J$. I was afraid the post will be too long. I have a really short attention span too and usually can’t last much pass 700 words. 🙂

  • Alok February 14, 2012, 8:38 am

    Great Post. I struck out on my own a little over 2 years ago (leaving a very high paying consulting gig) and have finally hit my stride — not in terms of matching income (which wasn’t the goal) but understanding how to be an entrepreneur. A few lessons learned:

    1) Glad I Saved – the departure was planned and my wife and I had saved for years and dropped our expenses to the bare bones. I wanted 5 years before I needed to go back to work. Sounds like a ton but it was more about cutting costs then saving.

    2) Build while Working – I see a ton of bloggers have full time jobs while they blog at night. I wish I had done more of that to build a following but I was working 80+ hours/week so anything outside of work was difficult.

    3) Set Milestones – If you’re raising money, VCs will ask for a clear set of milestones before the next tranche of capital. The same should hold true with time. What’s the next milestone I need to achieve before I put more of my time into this entrepreneurial venture?

    I’m still learning everyday and finally feel like I have a clear vision of what’s next…..it took 2 years of frustration but I’m glad I did it. My mentor always tells me that the only risk that’s bigger than going off on your own is staying where you are. I think I finally understand what he means.

    • retirebyforty February 14, 2012, 9:54 am

      Thanks for sharing your lesson.
      1) It is essential to have the Mrs. on board with the plan. After that, it’s all logistic. 🙂
      2) I’ve been able to build while I’m working full time, but it is cutting into the day job a bit.
      3) Good to know.

  • Miss T @ Prairie Eco-Thrifter February 14, 2012, 1:10 pm

    Very inspiring post. You hit the nail om the head multiple times.

    I like what I do but I am still trying to figure out what I really want to do. I haven’t quite reached that point yet. However, when I do, I definitely plan to take action. It is so important to make these changes so that you can feel good about living an honest life; one where you were true to what you wanted. And having a team mate in the journey is also a great support.

    Sometimes we just need to take a leap of faith and jump.

    • retirebyforty February 15, 2012, 3:18 am

      Thanks Miss T. I like your philosophy. It’s much more healthy in the long run to be true to yourself. I don’t know what I would do without a partner. It would be so much more difficult.

  • Christa February 14, 2012, 1:56 pm

    I had a unique situation in that I wanted to try my hand at freelance writing but I didn’t want to work full time. My husband and I made it work, although I must admit it’s a little tighter than it once was. But I love my work now, and I am much, much happier!

    • retirebyforty February 15, 2012, 3:18 am

      That’s what I want to hear. Thanks for sharing.

  • My Own Advisor February 14, 2012, 5:15 pm

    Great post Joe!

    Reading about all these guys, is very inspirational!

    I only hope my blog can continue to grow and grow over time, so I can at least have some options to consider in the years to come 🙂

    • retirebyforty February 15, 2012, 3:19 am

      These guys work very hard and they are all very entrepreneurial. It’s great to know them.

  • 101 Centavos February 14, 2012, 6:43 pm

    Nicely written sentiments, Joe. My two cents, take a chance now while you can. You’re in a good position, well prepared with back-up spousal income. If you’ve got the drive, you’ll find out soon enough if this is for you. I remember one past co-worker. He quit a well-paying job to pursue fine wood-working full-time. As gifted as he was ( a true artist, in my opinion), he wasn’t able to generate enough income to be happy. He went back to work for his old employer, still keeping the wood-working as a sideline. But at least now he knew, and no regrets.

    • retirebyforty February 15, 2012, 3:22 am

      Thanks Andrew. I agree with you and I will probably have to do it soon. Thanks for sharing your co-worker’s story.

  • JB February 14, 2012, 7:36 pm

    Awesome post. I hope to find your courage one day. I’m currently in the “a lot to lose” group. I strive for something more in life (a PhD, perhaps) but I have too much to lose from 6 figures at an occasionally enjoyable, mostly lackluster job. Currently 31 and saving half of my after-tax income, I’ll be able to retire by 45 and play golf, travel, or whatever. Gambling on a PhD or something entrepreneurial might provide significantly more overall fulfillment (than not only my job but perhaps also just playing golf) or it might be less fulfilling and postpone retirement by 10-15 years.

    Great post and good luck!

    • retirebyforty February 15, 2012, 3:24 am

      15 years is a long long way to go in a “mostly lackluster job.” Hope you keep your eyes open for other opportunities as well.
      I felt the same way as you when I was 31, but it turns out I couldn’t last until 45. 🙂 Good Luck to you too!

  • Hunter - Financially Consumed February 14, 2012, 8:40 pm

    I like the way your heading Joe and think you’re in a great position to make it work. You have financial backing in terms of savings, investments and Mrs. RB40’s income, so the financial risk is reduced. However, I don’t think you need to ‘go it alone’. Key to making this transition pay is to surround yourself with like-minded people, and from the comments on this post you have done this well. This is your support group. Plus, I am just realizing the benefits of creating collaborative partnerships. It’s fun to work with peers, and the added accountability is a powerful motivator. Together we can all go it alone.

    When’s your 40th?

    • retirebyforty February 15, 2012, 3:27 am

      I am working on building relationships this year. I’m not a natural at this and it’s difficult for me. I’m going to FinCon12 and hope to meet a lot of people there. I’ll also try to meet other local bloggers and entrepreneurs.
      I’ll be 40 next year. Time is short.

  • The Financial Blogger February 15, 2012, 7:09 am

    Great post Joe!

    how about keeping your day job while focusing on your other projects? you can certainly do an “okay” job and create some growth in your business? This is what I’ve tried to do for the past 3 years and it did well. Funny enough, I’m currently performing at both my day job and online company…It is weird sometimes how you can more productive by doing more work 🙂

    • retirebyforty February 15, 2012, 9:18 am

      I’ve been doing that for about a year. With baby RB40 in the mix, I can’t be productive in both my day job and online. I think you are not married and are childless for now right? I can’t multitask very well, it’s not one of my strength.

  • Brave New Life February 15, 2012, 9:28 am

    Hey Joe –

    I see what you’re saying, but let me offer a different view that I hope you’ll appreciate. It seems like you are assigning a strong correlation between current income and how much one has “to lose” by quitting a posh job to go do something on their own. I believe there is a correlation, but I think most people give it far too much credence. Consider the marginal utility of money. What are you really getting out of your 6-figure income if you’re living off your wife’s salary anyways? It seems like that’s unnecessary money that you’re paying for with your valuable time. Time that could be spent venturing into self-employment, writing here, or just staring at the ceiling.

    Companies want you to think this way. They want you to feel like you’re walking away from so much. This is why they offer big salaries, benefits, etc. I say screw that. Letting go of fear (and the thought that you have a lot to lose) you can start considering things in the opposite way: “What do I have to lose by *staying* at my job?” I say that you risk becoming a drone, doing a job you hate for money you don’t need. You also risk losing valuable time you could be at home, or with family/friends, or not doing something creative or entrepreneurial.

    This is the paradigm shift in thinking that takes the fear of retiring early and makes it fun and exciting instead!

    Anyways, this is how I see it. This is why I have no fears with leaving my 6-figure job. My bigger fear would be that my young kids grow up while daddy’s in a cubicle, and that I finish life having never taken any chances or created anything great. That’s way scarier than giving up a 6-figure income.

    • retirebyforty February 15, 2012, 10:26 am

      Thanks for your input, I really appreciate it.
      I am putting a strong correlation between the paycheck and the difficulties of letting go. Most people need to do that because financial security is a must. My parents were poor for a number of years and I don’t want to put us through that.
      I agree with you in principle, but I want to shore up our finances just a little more.
      What’s stopping you from leaving your job now? 🙂
      I know you plan to leave soon. Good luck!

  • Don February 15, 2012, 9:29 am

    You write: Have you thought about working for yourself, but the timing has never been right?

    Yes, all the time… Slowly I’m chipping away at my defenses for not doing so though. I’m totally debt-free, I had a small dividend stream, and I have a small entrepreneurial stream.

    I’m hoping after 2 more years (or hopefully less), I can join the fun and have my own business too. Both my grandfather and dad does (and did), so why not 🙂

    I think you have your bases covered, I wish I were in your position! Kudos to you for gearing up to take the plunge in being an entrepreneur!

    • retirebyforty February 15, 2012, 10:27 am

      I knew you are thinking about it!

  • Sunil l Expedited Wealth Building through Entrepreneurship February 15, 2012, 12:42 pm

    I am personally a big proponent of “side gigging” (keeps things more interesting IMO), but in your case in the event the job becomes unbearable it is definitely time to move away and try something that truly gives you happiness / more meaning. We have one life to live. That said, with your quals and the tech demand you can always go back to the workforce arguably at will

    • retirebyforty February 15, 2012, 3:41 pm

      I like side gig too, but it is hard with a demanding day job and a baby. I can’t expand my online footprint anymore because there is just not enough time and energy. Thanks for your input Sunil.

  • Shane @ Beating Broke February 15, 2012, 1:33 pm

    I think what it really comes down to it your happiness. If you aren’t happy with what you are doing, there’s a psychological effect on you. You may not even notice it. I know I didn’t. It wasn’t until I quit that I realized how much added stress the job had added to my life. It just isn’t worth it. And, that doesn’t mean that you can’t return to the workforce some day either. But, having the experience of going it alone will give you an entirely different perspective on what you are looking for in a new job.

    • retirebyforty February 15, 2012, 3:42 pm

      I agree Shane. I am not happy at my job anymore and I know it. My shoulders are knotted up for months now.
      I’m going to physical therapy to try to fix this, but it’s not going to work in the long term.
      Love hearing about your success and happiness.

  • Darwin's Money February 15, 2012, 6:33 pm

    Wow, that’s a doozy! So, I guess the biggest question for me would be, could your family do OK on just your wife’s salary if the site didn’t earn a lot of money – OR, could you get back into the swing of things professionally relatively easily? In my case, my wife’s not working now, she won’t make nearly what I do when she goes back (teaching salary) and if I left, I’d be hard-pressed to go back at a similar salary unless I spent a few years moving around the country jumping at the next best offer to get back to my old salary. For me, the risk is too high, especially saving for 3 kids’ college and retirement. But if your wife’s job is secure and you’re living relatively comfortably, it would probably be great to go for it! I’d just bear in mind that on any given day, google can rejigger their algo or the million finance blogs that pop up daily could start to dilute your readership a bit. But hopefully you continue to grow. Whatever you do, keep us posted!

    • retirebyforty February 15, 2012, 9:55 pm

      Our family will be OK if the site doesn’t make much money right away. I have a low bar for online income. I need to make $1,000/month and our cash flow will still be fine. If I can’t maintain that income, then I can get a part time job. Shouldn’t be that hard to make $1,000/month with a part time job.
      With 3 kids, it would be very difficult. Thanks for your input.

  • Jen @ Master the Art of Saving February 16, 2012, 6:45 pm

    I’ve had the entrepreneurial spirit since I was little. I was always trying to come up with different ways to make money and lots of little businesses here and there. Each time, I held myself back without even realizing it. Hopefully this time will be different. 🙁

    • retirebyforty February 16, 2012, 8:33 pm

      What do you mean by held yourself back? Please share because it sounds like something I should avoid.
      Good luck!

  • youngandthrifty February 17, 2012, 1:52 am

    I would be very scared to go at it alone and I like the idea of guaranteed income or diversifying different streams of income.

    That being said, I also haven’t ever bunjee jumped and I would probably pee my pants if I did lol.

    • retirebyforty February 17, 2012, 9:35 pm

      You have other pants right? 🙂
      I think everyone is scared to go it alone, but some people are able to get over that threshold. Nothing wrong with working for a corporation if you like your job and situation.

  • Suba February 18, 2012, 4:40 pm

    As you know, I have been thinking about this a lot lately. In fact my Monday post will be about why we won’t quit. I was never entrepreneurial, it might have been due to the fact that both my parents are scientists so it was a given I would become one too. So it really scares me to go on my own. I like the guaranteed income, so losing it seems like losing everything I have worked up to so far. And also leaving the career I trained for all my life scares the hell out of me too. What if I have to get back? I know the competition will be high and I wouldn’t have kept in touch in my field as I do now. What then? What if my husband lose my job? So many what ifs… I have made my decision, again, you know what that is. Only time will tell if I made the right decision. I guess I will always wonder what if I had gone the other way… Great post Joe!

    • retirebyforty February 19, 2012, 6:26 am

      Looking forward to it! I felt the same way for many years. My degrees cost a lot of money and it wasn’t easy to get through the program. There are a lot of sunk cost, but now that I’m older I feel a bit differently. I’m pretty happy with the ROI that I got from my education. At this point, I’m ready to move on. There is the rest of my life to consider too. Good luck!

  • Buck Inspire February 19, 2012, 2:24 am

    Looks like you’ve got a whale post on your hands! With a new job and a baby around the corner, won’t be striking out on my own anytime soon. Will be working this hybrid mode for as long as I can. Good luck and I’m sure I’m be reading your “I Quit” post real soon! 🙂

    • retirebyforty February 19, 2012, 6:30 am

      Thanks Buck. I understand you position. The hybrid mode works pretty well for me too. 😉

  • Diane February 25, 2012, 8:51 am

    I gave up a hefty 6-figure salary to go on my own, because I was literally at my last straw and couldn’t take it any more. I’m now making double out on my own.

    Of course, I also work 90-hour weeks and never get a vacation. My quality of life is nowhere near as good in some ways, but much better in others (no political pressure). I’m glad I did it – it’s been a great learning experience.

    • retirebyforty February 29, 2012, 1:08 pm

      It’s great to hear a success story! Would you like to write a guest post and share some of your learning?

  • Geoff March 2, 2012, 1:22 am

    At a time of recession a number of people lose their jobs and become self-employed, some very successfully. Not everyone realizes how difficult it can be though, especially during the first 2/3 years.

  • Shilpan March 31, 2012, 9:54 pm

    I have been on both sides of the aisle. I’ve owned businesses and I have worked for major corporations earning way over six figure at the same time. I was able to do this because real estate is a great passive income source. Mos of my investments are in hotels and commercial land. I don’t have to work full time to run these businesses. It offers me best of both worlds.

  • Sean @ One Smart Dollar April 18, 2012, 10:59 am

    I was laid off from Bank of America in 2008 and have been working for myself ever since. I can easily say I have never been happier.

  • Steve May 2, 2012, 5:23 pm

    How was the Simatai Great Wall? We stuck with the Badaling section.

    • retirebyforty May 4, 2012, 10:06 am

      It was really great. We were the first one there that particular morning and I really liked it.
      I figured we could go to Badaling next time.

  • 30sAndRetired May 27, 2012, 5:44 am

    I’m with you retirebyforty! I just left a VERY stable, almost 6-figure salary to go it alone (well, not exactly; I’ve joined forces with my wife and our IT/Web consulting company).

    The reasons might be different but I think a person KNOWS when it is time to call it quit.

    Good luck with your journey!

  • Jordan Rodriguez May 16, 2013, 7:38 am

    I was in self-destruct mode at my old job, so at one point I just stopped focusing on their work and started looking at mine. I worked from home so it was easier to ignore the work I didn’t want and spend time on the work I did want. I started my own company in a few months, and with a team of people, finished our first product in two. In the span of less than 6 months, I had a business with $1000+ down and to this day, not a single profit. It was easy for me to go out on a limb and take the entrepreneurial leap. But now that I’ve failed, it’s harder to go back to not knowing if things will pick up.

  • Krystian Kowalczyk August 27, 2013, 6:53 am

    Well, I’m in the “Not much to lose” group. I have graduated from university and took a job as computer programmer in nice software firms in Poland (in Europe ;)). During that time I was thinking about starting my own business. It took me 2 years to quit a job and start my own venture. I don’t regret it. The more I’m doing on your own, the more natural it feels to me.

    I think that it is true that the longer you wait to make a leap, the harder it is to do it – especially when your salary increases, for the same effort you put in work.

    • retirebyforty August 27, 2013, 8:45 am

      Good luck! That’s what I hear from everyone who started their own business. I guess it depends on your personality too, but going to work for other people probably is impossible after that.

  • Elle @ New Graduate Finance September 5, 2015, 10:04 pm

    This is my dream! The only weird thing is that I have not yet started working full-time yet.
    I wonder if you think it is necessary to get that experience of working for someone else, really gaining motivation to start your own empire and work for yourself, or if you think it makes sense to just go straight from earning your degree to being your own boss?
    Interested in hearing responses!

    • retirebyforty September 6, 2015, 7:13 am

      Hey Elle, congratulation on getting out of school. You have to find your own path. Only a few of my friends went straight into self employment. Life was very difficult compare to other friends who had a stable job, but it paid off for my old roommate. Jon struggled for many years and he made it now. High risk, high reward. Good luck!

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