So here I am, launched at last. A consultant. President of my own IT consulting company.
I spent well over a year preparing for this, and much more time than that trying to make this a possibility. After all, I wasn’t planning to stop working full time until we paid off our mortgage. Now I’m one month into my new role in life, and I thought it might be a good time to write about how things are going, and whether it was all worth the trouble.
The thing is, the ‘trouble’ fades from memory very quickly. I was working some long hours over long weeks and months, but that seems so long ago now… my daily routine has really changed!
I still get up around 6am even though my working hours have been reduced. I teach my 5-year-old her math lesson right after breakfast, usually around 8am. Three days each week I spend the morning at client offices, the other two I spend working from home. My lunches have no timetable, but I try to find people to grab lunch with in order to catch up and to network. In the afternoons I try to get some marketing done, maybe go by the gym on the way home, and tidy up some emails and phone calls when I get back to the house. At 5pm it’s quittin’ time most days, and I’m already home. On top of all that, I LOVE the people I get to work with every day, as well as the work itself.
When I stop and read back over that last paragraph I can hardly believe it, because it sounds like a dream scenario. And it is! It hasn’t all been smooth sailing, but what major change is? Some of the hurdles I’ve encountered have been things like “unwinding” after a year in the fast lane, because for the first few weeks I was thinking “If I’m awake, I’m working”. There were a lot of small tasks to take care of to get started with (bank accounts, filing documents, taxes, office setup, a vehicle purchase, contract negotiation, bookkeeping, etc). Once those to-do list items calmed down it was really difficult for me to calm down! I had been working non-stop for so long, it was hard to condition myself for less stress, if that makes any sense.
Income-wise, it’s been okay, not great. I’ve taken a drastic pay-cut compared with last year. 2014 was the first year I made six-figures (by working my tail off) but this year I’m only contracted to make around $60k, plus any web design business I can pick up. And that’s before paying for my own benefits and paying the higher self-employment taxes! I’m still trying to find another solid consulting client or two.
Still, not having a mortgage has been very stress-relieving. Our family’s annual budget is now set at around $36,000, without tightening our belts very much at all! That number includes family vacation money, savings for car replacements, things like that.
It doesn’t include our new expenses like medical insurance, work phone, liability insurance, and other business-related expenses, those are paid for directly out of my business account so they don’t touch the personal budget. I don’t think that’s cheating, but I wanted to disclose it anyway. Oh, and we’re also depositing a little each month into a SEP IRA, treating it like a 401k in some ways. Before self-employment I don’t think I could even answer the question, what does IRA stand for!
The Biggest Adjustments
Honestly, one of the hardest parts of being self-employed so far has been getting used to people NOT needing me as much. I’ve spent 15 years being the “hero” that saves people from IT emergencies. I’ve been the glue that holds systems, processes, and data together for folks. Afterhours email and texts have been a part of my life for so long, it feels strange that nobody is “bugging” me about minor issues outside of work hours.
That may seem silly to you, but to me it’s been difficult to adjust to. I have made a career on being responsive and dependable, and now my income depends on strategic thought, initiative and marketing. It feels wrong not to be putting in “extra time” so that my bosses notice.
Another struggle I’ve had is adjusting to the expectations of my family, and helping to set proper boundaries. When no one is calling me in the middle of the afternoon, it’s tempting to say “sure, I’ll go to the park with y’all”, but it’s important that I’m spending time taking care of clients by planning for them and marketing to them. It’s a very different way of thinking about what I do for a living!
So What About My FI Journey?
It’s a great question, and one that I’m still working through. In some ways this change is a huge step towards financial independence, because I’m downsizing my career in the pursuit of time for other pursuits. However, from a strictly financial sense, I’m going to need to earn more than I’m earning right now if I’m going to make significant strides there. I’ve made it past the first stage of debt, but have quite a ways to go to get past stage two!
I’m not stressed about it though. I believe that I’m right where I need to be right now. I’m enjoying re-connecting with my wife and my kids after so much time spent in the office over the last fifteen months. I even took my oldest two fishing in the late afternoon earlier this week, with zero concern for my “job duties”.
That’s a level of independence that is here in front of me, right now, and I’m really enjoying it!