Sitting down at my computer right now, I am scared.
I’m scared to write this post.
I’m scared because this post will be the launching pad for my biggest leap ever.
Please join me in discussing my decision to scratch the entrepreneurial itch. Should I quit my job in Corporate America and go full time on a start-up? Should I build up more in savings and work on the side?
In this post, I’m going to go through a few things:
- An Overview of My Life
- My Upbringing
- Thoughts on my Current Job
- My Thoughts on The Mastermind Within
- Chatting with My Boss About Leaving
- Budgeting for Leaving my Job
- My Plans for Life After a 9-5
My Life, Up Until March 2017
In the following few paragraphs, I want to discuss my upbringing and experiences which have shaped my perspective on life. I have a great family and have been successful as a result. Below I go into why I’m naturally conservative, quiet, and determined.
I’m blessed and grateful for being born into a wonderful family. I’m the eldest of 5 children and have 4 beautiful sisters (ages 23, 15, 13, and 11).
I can never remember a time when I had to miss out on something because of money or time. My mom stayed at home for my entire childhood and was always there to help me with anything I asked. If I needed help on homework or wanted a ride to a friend’s house, she’d be there for me.
My dad was my baseball and basketball coach for the majority of my childhood years. His dad was his coach, and by coaching me, this was one of the many ways he showed love for me. In addition to coaching, he was always up for a game of horse in the driveway or a card game.
From college to the year 2000, he was a banker and worked his way up to become CFO at a regional bank. In a merger, he was asked to move to San Francisco and declined. From 2001 until today, he has been involved in multiple enterprises and companies and has shown me a work ethic unlike any other. You want to talk about grinding it out? 12 hours a day, 7 days a week? That was my first experience to entrepreneurship.
When I was young, I was the quiet kid at school. I tried to be outgoing and funny, but this did not come naturally for me. From 5th grade until 8th grade, I thought I was funny when I made stupid comments and tried to act cool. Not a good strategy for trying to impress people. By the 9th grade, I realized school needed to be a priority and in class, I stopped messing around and hit the books.
Socially speaking, I didn’t take too many risks in high school. I stayed to myself in class and rarely talked to people I didn’t know. This was unfortunate, I was behind the curve communication wise and would need to make up for that in my college years.
A Builder and Problem Solver
In my free time, I was always building things. I loved playing with Legos. When I’d play, I’d create massive structures, tear them down and then build them up again.
I also loved to play with my baseball cards and would create fake teams and leagues to play against each other. After each game, I’d compile the stats and figure out the best players on each team.
In high school, I realized I was naturally talented at solving problems and playing games. I bought an Xbox 360 and was hooked on various online multiplayer games (Halo, Call of Duty, etc). This didn’t help my social skills directly, but working as a team and yelling at 13-year old kids over the internet was a good time (haha). I also started solving Rubik’s cubes… I’m ranked top 2000 in the United States. When I put my mind to something, I achieve it.
When I went to college, I continued to not take too many risks. I didn’t drink alcohol during my freshman year and didn’t go to any parties until late in my sophomore year. I didn’t understand why my friends wanted to drink. Eventually, I came around to it like most college students do – but it took me a while.
I finished up my undergrad degree in 3 years. Again, when I put my mind to something I achieve it. I entered grad school and did my Master’s in 2 years. Some of my friends in my program were looking to work in New York City or Chicago. Not me, I wanted to stay close to home because I thought Minnesota was a great place to live. It is a great place to live, but this was the conservative Erik speaking!
My Current Day Job
In my current day job, I’m working as a quantitative analysis performing statistical analysis. To be specific, I’m analyzing the credit risk in the Wholesale loan portfolio for the bank I work for.
My job was one of the jobs created by the Dodd Frank Act. It is very interesting and has allowed me to learn many different things about credit risk and banking. I’m a top contributor in the team and have been great in helping the team along throughout the year.
Pros of My Day Job
There are some great benefits I experience in my day job:
- I’m paid very well for my age
- My current salary is $76k with a 8% bonus and after a promotion, I would be around 82-85k with a 10% bonus
- I’m working on high visibility projects where I regularly meet with senior managers.
- Have opportunity to mentor an intern this summer to gain management experience
- My team members are nice people who are friendly and happy to work with me
- Corporate America benefits and 4% 401(k) match
- After researching various things for self-employment, no wonder people aren’t leaving Corporate America!
Cons of My Day Job
A few things bother me about my current job:
- I’m on the expense side of the income statement.
- Since my job is a result of a regulation, we aren’t revenue producing and won’t see revenue producing salaries.
- The 3% (if that) stick and carrot is all we see 😉
- There is little room for growth into a manager position
- I have 1 year of experience in my current role. While I have the skills to manage a team, I won’t be looked at seriously for at least 2-3 more years.
- I feel like I’ve learned 80% of what’s out there for this job in 1 year.
- Do I really want to specialize in this field?
- What else is out there for me?
I’ve listed out my pros and cons. It would be safe for me to stay, but the regulatory environment is up in the air. If Dodd Frank is repealed, then what? I’d have to find a new job. Even if Dodd Frank stays around, I’ll still have the entrepreneurial itch to get out and do my own thing. It’s tough to be creative in a group when creativity is frowned upon…
Conclusion on My History
Up until this point in my life, I’ve played it pretty safe. I’ve been successful, but feel I can do more and I can be more.
The result? I want more.
To Scratch the Entrepreneurial Itch or Not Scratch the Entrepreneurial Itch, That is the Question
I want more. I want to get out there and have new experiences. I’ve lived the majority of my life making the easy choice. I’ve sheltered myself from many experiences in my past. Life begins outside the comfort zone. Growth begins outside the comfort zone. It’s time.
The traditional path for people is go to college, get a job, start a family, retire. That sounds great, but I’m looking for more. I love building things, but I don’t get enough of it in my day job. I’m ready for a new adventure – an adventure which will take me to the next level.
Jobs suck because they’re rooted in limited leverage and limited control. Sure, you can have a great job (and a fun one too!) but in the scope of wealth, they limit both leverage and control – two things desperately needed if you want wealth. – MJ DeMarco
The Mastermind Within
Essentially, the decision to quit would mean going full time on developing The Mastermind Within. Right now, there are some products and features in the works. I’m working on a post for next Monday which will explain these developments in detail.
I’m very excited about the potential of this blog and this brand. As stated in our mission statement, we want our readers to experience amazing personal growth. This can only be accomplished with great features and great content.
The Mastermind Within Mission Statement:
The Mastermind Within hopes to build a collaborative community where ideas can flow openly, and readers can build knowledge and experience amazing personal growth.
Personal finance and self-development are two topics I’m passionate about. I want to continue to influence the minds of others and help them become more successful. I want to help, now it’s time to get after it!
Since I still do have a day job to do, I want to ensure I am wise about my potential exit. As a result, I called up my boss today to discuss my thoughts.
Chatting with My Boss
Earlier today, I chatted with my boss briefly to express my interest in leaving the company. He lives in a different state, so I called him on the phone.
I started off the conversation by saying, “I care about having open communication and being transparent and I wanted to chat with you about my interest in working on something revenue producing. I’m interested in starting my own company and wanted to get your thoughts.”
My boss said, “I understand, you are young, single, and have a dream. This is the best time to take a chance because you don’t have anything holding you back. I don’t want you to go, but if you do, I get it.”
We chatted a little bit more and will chat in person when he comes to visit in a few weeks.
Cash on Hand Analysis
What wouldn’t an Erik post be without a good hard look at some numbers! 🙂
In this section of the post, I’m going to take you through my analysis of wages and expenses to give you a better understanding of my financial situation.
Forecasting Starting Cash
The most important factor in my analysis is how much cash on hand I’ll have on my first day of entrepreneurship. With reasonable certainty, I can forecast my cash for the next three months. Note: my current 2017 financial plan is to pay down $25k of my mortgage to get rid of PMI. If entrepreneurship is the way I choose to go, then that plan may need to be put on hold! For this reason, I have two columns in the following picture.
I will have a cushion starting out – I won’t be without cash and will be able to cover any major emergencies. This is promising.
If I leave my day job, I still have 2 income streams: rental income and my side gig doing statistical consulting income.
My rental income will be constant at $1,300 a month through the rest of 2017. My side gig doing statistical consulting should bring me about $1,200 a month. The side gig will have hours that vary, so this number could be volatile.
In sum, my income without my day job will be about $2,500 pre-tax a month.
My main expense is my mortgage. When I include house insurance, taxes, and PMI, my monthly payment is $1,700 a month. Other than that, I don’t spend too much money.
I’ve determined conservative estimates for food and fun ($400 a month), gym ($25 a month) and home improvement ($500 a month). Also, I determined a number to hold for tax purposes ($500 a month). If I quit, I don’t want to have to scramble to pay off the IRS!
Health and Dental Insurance
If I quit my day job, I would need to get my own health and dental insurance. This would be a costly expense and something I have no experience dealing with. Currently, I got a good chunk of my insurance paid by my employer.
I went on the MNSure (the Minnesota Health Care Marketplace website) to see what kind of plans were out there. This would help me understand the market and allow me to get an understanding of the cost of health and dental insurance. Below is what I found:
Given my research, I will be slightly more conservative and input $275 for health insurance and $25 for dental insurance.
My Entrepreneurial Budget
Below is my entrepreneurial budget. This has the inputs I discussed earlier in this section. On the top left side of the figure, you see the wages. Next, I show you my fixed expenses and variable expenses. Finally, on the right side, you can see the monthly deficit I’d be running and how many months I would have in savings.
If I was to leave at the end of April, I’d have over 9 months to figure out a plan to increase my income. I know for a fact I would be able to build something in 9 months. Given that I’m working with a great team, I have no doubt that some kind of revenue will come through the door!
One thing I’m worried about is any big home repairs I’d need to cover. I know my water heater will probably need replacing in the near future, and my furnace is 27 years old.
One last thought on the budget: if everything fails miserably, it’s not like I’m unemployable. I will have read 75 books in 2017, have became an entrepreneur, and still only be 24 or 25 years old. I have full confidence I could get a job back in Corporate America… because of this… onto planning….
What I Would Do After Quitting
After quitting my day job, I would have 50 hours of time to fill with whatever I wanted to do. Let’s discuss how I would fill that time effectively.
Learning by Reading and Doing
In 2017, I have a goal to read 75 books. Currently, I’m through 19 and well on my way to reaching this goal successfully. If I had 50 extra hours, I would devote between 5-10 of these extra hours reading content on how to make myself and my business better.
Recently, I picked up a number of books on business, start-ups, sales, and personal development. I have a stack of 28 unread books sitting on my desk (no, that isn’t a typo). I already do book reviews for The Mastermind Within – now it would just be part of my job! Investing in yourself is the greatest investment you can make.
For the doing part, I would get out and travel. I will go on a road trip or visit another country. Given my only restriction, WiFi, I could work from wherever. This would open my eyes to new perspectives, and give me a better understanding of the world.
“If you aren’t showing up to be better than you were yesterday you will not last in real business.” – John D. Rockefeller
Consulting and Networking
As I mentioned above, I already have 3-4 hours of consulting a week through my old co-worker. Also, The Mastermind Within is going to start consulting individuals on various topics. By freeing up 50 hours of my time a week, I can spend a few hours a day with clients and potential clients.
In addition to consulting, I will be networking with other like-minded individuals to understand their experiences of entrepreneurship. Also, you never know what opportunities or collaborations will pop up without a large network. Networking will be vital to our success.
“If you are the smartest person in the room, you are in the wrong room.” – Richard Trendi
Blogging: Product Development, Content Marketing and Sales
Every blog has two main components to it: the content (posts like this one) and marketing (SEO, commenting, social media). For content, The Mastermind Within has consisted mainly of personal finance posts, fitness posts by Henry, and book reviews by Erik.
Going forward, we want to build out an entrepreneur section and continue to post on personal finance and fitness. Both Henry and I are passionate about these topics and want to share our passion with the world.
Right now, Henry and I are working on a free 5-day mini course on personal finance. This should help us build our email list and allow us to grow our traffic base. Next, we will write an ebook and produce a course which should bring in passive income. Finally, as mentioned above, we will begin consulting. Some of our clients will be acquired through cold calling local businesses (remember I wanted to learn while doing?). I’ve never done sales – this will be an eye-opening experience!
One last note on the blogging front: I love the allure of traffic primarily acquired through search engines. SEO is crafting your posts in such a way where search engines will display them when someone searches for a certain keyword (or set of keywords). I’m learning more and more about SEO as time goes on. SEO is somewhat of a black box – our efforts should pay off eventually!
Exercise and Sports
Okay, come on. You thought I wouldn’t take full advantage of my new schedule?
When I worked for my dad’s company in college, Wednesdays were reserved for golfing in the morning. My dad is a partner in a local golf course, and Wednesday is League Day. During those two summers, I became a decent golfer (12 handicap) and loved hanging out at the course with my dad. If I’m working for my own company, I can definitely make time to play a round of golf each week 🙂
In addition to golfing, I normally look to hit the gym 3-4 times a week. If I’m not held to a 9-5, I can go to the gym whenever I want. I could go to a yoga class mid-day, or go for an 11 am run around the Minneapolis lakes. The possibilities are endless.
I’m ready to take the next step. It’s nearly midnight and I have a call with a client at 8 AM. I also want to read a bunch of blog posts in the AM… looks like I’ll be tired tomorrow 🙂 (oh, did I mention I could take a nap without being at a 9 to 5?)
At this point, it’s a matter of time. Do I leave my day job at the end of April? At the end of May? Do I stay on for another year, get rid of PMI, build up a fat savings account, and work on my company on the side? There are many questions to answer for myself – I’ll figure it out!
What about Your Thoughts? Should I Scratch the Entrepreneurial Itch?
What do you think? Should I scratch the entrepreneurial itch? Would you give up my salary and position in life to try something on your own? Have I missed anything in my analysis?
Thanks for stopping by. Please leave me feedback on your thoughts – I appreciate all the comments I receive and will take each one to heart.