Transitioning from wage earning to self-employment/passive income

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Jan

Jan

Resident GILF
Aug 6, 2006
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www.jansideas.com
Before you can think about getting rid of or cutting back on hours at your wage earning job, make sure you know what your really make. Be sure to figure in the following:
Income:
  • Paid time off
  • Retirement contribution matching
  • Health insurance
  • Life insurance
  • Misc perks and discounts
Expenses:
  • Childcare
  • Wardrobe
  • Travel costs
  • Meals
  • Travel time
Reduce/eliminate all discretionary bills and expenses (credit cards, gift giving, vacations, and “toy" purchases).
Reduce/pay off necessary expenses (car loans, utilities, etc).
Have a savings to fall back on.
Have the monthly income be equal to 5 weeks of pay so that you can save the extra income or if a job falls through, you'll be OK.

To fill save money or supplement income, find temporary/part-time jobs. These are often available. It won't provide big bucks, but it can help:
  • Deliver flowers around holidays (contact local florists and see if they contract out).
  • Work at a boy/girl scout camp (great outdoor job and they will provide meals and lodging) for 5-6 weeks during the summer.
  • Find a job you can be "on call". You can work as little or as much as you want (group homes are always hiring).
  • Deliver newspapers, its just a few hours early in the morning. Not all routes are 7 days a week.
Know how your natural work cycle and create a skeleton routine around it. For me:
  • I'm a morning person so I get up early, write, and clean the house.
  • I'm an outdoor person so I take a break with the kids and go to the park during the day.
  • The girls are busy 1/2 the time late afternoon/evenings so I work more then.
  • I do best with short blocks of time so I set one-hour goals and rotate tasks.
When income begins to come in, assign it a bill or expense. When that is covered consistantly add another one. Repeat till all bills are being paid by self-employment/passive income. During this time, take the money from wage earning and save it.Have a plan to consistently generate self-employment/passive income.

NEVER give up you goal to get rid of a wage earning job. A set back may slow you down, but you don't have to let it stop you!




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Very useful info Jan.
I plan to be leaving my wage paying job very soon and this brought up some issues that I haven't considered before.

+rep
 
Nice guide!

One goal I have that I must hit before I quit my day job is to save up to take my day job weekly earnings * 5 (weeks) * 3 (months) ~ That's gross earnings, not net, that will give me a nice cushion. :)
 
Thank you!

Another job to supplement income is to take the classes by H & R Block and get hired for next tax season. It's 4 months work and there is a way to have medical benifits all year. I'm going to call them at the end of April and find out more about it.
 
Finding individual health insurance in NY

Great points, Jan, especially with regard to insurance. I'm betting there's a wealth of knowledge among WF members about how to find reasonably priced individual insurance - maybe if we pool our tips in this thread it will help more people make the transition to self-employment.

When I left my full time job almost 3 years ago, I was absolutely shocked at the premiums for individual comprehensive health insurance in NY. Most companies wanted to charge $500 or more per month for a healthy woman in her 20s.

Here are the 2 affordable NY group health insurance options I found after doing a ton of research:

Working Today Freelancers Union
Medical, dental, life, & disability insurance for the self-employed working in several industries including technology & advertising. Applicants must demonstrate that they've worked more than 20 paid hours in each of the last 8 weeks or earned more than 10k in the last 6 months.

Healthy NY
Health insurance with or without prescription coverage. A fairly low income is one of the criteria, so this option only works if your monthly household income is less than current threshold. If you don't have any ethical qualms about beating the system, it would probably be pretty easy to be selective about what proof of income you submit.

Anybody have tips for other locations?
 
ditton on healthy ny. it's is an awesome choice for people who qualify - i know several people who use it - they even let you pick your insurance company
 
chris22 said:
Wow, I'm 24 and only pay $80/month through Aetna.
Click to expand...

Lucky girl.

Unfortunately, NY has some of the crappiest insurance regulations in the country. Don't even get me started on what I pay for car insurance.
 
I used to pay over $1k a month in car insurance, so lets not get into insurance. Being a male in the capital of auto thefts AND uninsured motorists is just lethal.
 
Older cars/trucks=cheap auto insurance

Blue Cross/Blue Shield has a pretty affordable kids only plan, sucks for adults though. I can't afford it, but it's better than the family plan at my wage earning job.
Insurance is a big issue, just took my daughter to ER last week (uninsured) and am scared to get the bill. She didn't break anything but wanted to be sure after the second day she couldn't use her arm. I need to find something for the girls.

I'm in the group that can't afford insurance and doesn't qualify for assistance.
 
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