Hey friends! I recently guested on GrowthHit’s podcast and shared a fun conversation with the wonderful host Jim Huffman. I got to pick his brain on growth hack (Jim is a growth genius!), and I also answered questions about my journey from a big corporate employee to starting my own business. In the podcast, I talked about how I prepared to quit my high-pay tech job and “embrace for impact” for what was to come in the startup world. Give it a listen on:
I also wrote an issue about how to prepare to quit your job, so I thought it would be appropriate to share it here again. The following is a re-run of my early newsletter issue: Three and a Half Tips Before You Quit, with some edits.
Today’s issue is answering one of the great questions that people asked me: how did I prepare to quit my corporate job?
I asked for advice from friends who survived outside of the corporate world. One piece of advice that I kept at heart is:
Tip #1: build multiple streams of income.
When I got the advice, I only had one stream of income which is my corporate job. It makes me very dependent on the job; quitting that only income source is very scary. People in my field often picked up teaching; the friend who gave me the advice had a great teaching portfolio. I started to look for part-time teaching gigs and luckily landed on two great recurring opportunities to teach interaction design.
I also started stock investment to build on a passive income portfolio. Truth be told, I am currently negative on this “income stream.” But getting financial literacy is crucial to wealth growth, and I don’t regret starting to learn. I recommend studying Jack Bogle’s investment principles.
Tip #2: cut down living expenses.
Apart from creating more income streams, I also look into cutting down living expenses. Learning to cook wasn’t something I did specifically in preparation for quitting my job, but I think it helped a lot. It cuts down food expenses significantly while maintaining or even improving my life quality. I didn’t limit the number of times I can eat out; I switched the default option from eating out to homemade meals. This shift also makes eating out feel better than before. Quitting a job will mean an income cut; you either have to dig deeper into your savings or reduce expenses. Cooking is a pretty painless way to cut down expenses.
Tip #3: sort out your housing situation for the next few years before quitting.
If you are like me, who is renting in big cities like NYC, signing a new lease requires income documents like pay stubs and W-2 forms. Before you quit, you should find a place that you would want to stay for the duration of your entrepreneurship journey and sign the lease. Once you quit, you won’t have the same income level, making leasing or buying complicated. Lease renewal usually doesn’t require these income documents again. If you decide to buy, don’t buy the expensive “forever” home. Buy in the range where the mortgage is a similar amount as your current rent. I also don’t recommend downgrading living situations to save expenses since you will most likely operate your business at home and would need more space, not less.
Tip #3.5: … let me explain.
There is also advice I didn’t take. Storytime! A friend started a design agency as a side business while working for a tech company. He was very successful and eventually quit his tech job to pursue it full-time. When I asked him when was the time he thought he was ready to quit and commit full-time, he said: “It is time to quit when your side income is equal to or greater than the day job income.”
It blew my mind! It was such a clean-cut and fool-proof formula. However, I eventually decided against it. Here are my two reasons:
It does not apply to startup businesses. I would have to file a conflict of interest disclosure form to my employer to operate my startup while working full-time, which had a slim chance of getting approval. Most tech giants are branching their businesses everywhere; your startup idea will likely be a conflict of interest.
It is too conservative. It will take me a long time, if ever, to make that much income from a side hustle. I don’t want to wait that long.
I think this advice is still very sharp and may apply to some other folks in their situations, so I thought I would share.
I hope these tips are helpful to prepare you for the leap of faith into indie life if you are thinking about it! I know it is scary; I have been there too. Feel free to ask me more questions.
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Nice advice, hadn't thought about the leasing situation and I think that's applicable for more countries than just the US (also here in Europe). For cooking at home, i recommend you to check out https://yumee.recipes - community of home chefs on a convenient mobile app