For the majority of the last six months, I have been psychologically hamstrung by a crippling thought process:
In order to leave work behind, I must first be generating an online income that is equal to what I currently earn in my full time job.
There are several key weaknesses in this line of thinking. In this article, I intend to reveal every single one.
I am also going to break a taboo. I will suggest (nay, recommend, given the correct circumstances) that you quit your job before you have a sustainable online income that matches your existing fulltime wage.
Understanding the Value of Time
In order to be successful, you need many assets. Determination, skill, intelligence, and so on. However, by far the most valuable asset is time.
Success is hugely influenced by time in two intrinsically linked ways:
- Simply by its passing. In theoretical terms, if you work consistently over an extended period of time, you will eventually reap the rewards.
- By your use of it. Time only gives you back as much as you invest. It’s no good letting months pass in the hope of achieving success if you are not actually investing any time in your business.
Let’s say your current job brings in $2,000 per calendar month after tax. You think that you need to make at least that much from your online business in order to consider leaving your job. It’s the “safe” and “sensible” plan.
Your problem is that you will not be able to invest a great deal of time into your business. Perhaps 18 hours a week if you spend say 2 hours a night and 8 hours on a Saturday, but I’m guessing even that many hours will be a struggle.
Because you can’t invest much time, the length of time that will need to pass before you hit your goal will be far longer than if you had more time to dedicate to your business.
Time only gives you back as much as you invest.
Leaving Work Behind Doesn’t Have To Be As Difficult As You Think
So you feel that you need to match your online earnings before you quit your job? Rubbish. You don’t need to make this endeavor so tough for yourself! You need to ask yourself three key questions:
- How much are my monthly outgoings, on average?
- How much could I reduce those outgoings by if I made bearable sacrifices?
- If I lost my job on the 1st of next month and had absolutely no income to rely upon, how many months could I rely upon my savings before I ran out?
I am willing to bet that there is potentially a huge gap between 1 and 2. There certainly is for me. If there is a big gap, you need to ask yourself if the additional creature comforts you have are worth staying in your job for. Because if you remove those costs, the time it will take for you to leave work behind will be reduced – probably by a drastic length of time.
My average monthly outgoings have over the past six months been about $3,680. I am confident that I can reduce my outgoings drastically – to about $2,240. How? With some big material sacrifices.
But that is all they are – material sacrifices. All being well, given time, I can get them back again. My wish to leave work behind far outweighs my materialistic desires.
What Are You Worth?
If you are trying to match your fulltime income with your part time online income whilst you are still in your job, you are fighting against a strong current. You don’t have to make it so difficult for yourself.
Let’s consider an assessment of your worth. Ultimately, you are employed because your employer profits from you. He assesses your skills and worth, and is happy that the income generated will exceed the cost of employing you. That cost is your wage, taxes, overheads, training, and so on. Why can’t you cut out the middle man and extract that income direct from source?
Let’s look at a simple example. Your basic wage is $25,000 per annum. The employer has to pay additional taxes of $2,500 to the government every year. It will cost $5,000 in total to train you up, which amortized over 5 years employment (which is the company’s average employment period) equals $1,000 p.a. It costs an additional $5,000 p.a. in overheads to simply sit you in your chair. And on top of that, they are in business, so they want to make a profit from your services! So let’s add a 15% profit margin onto the total.
( $25,000 + $2,500 + $1,000 + $5,000 ) * 1.15 = $38,525
I’ve kept this real simple – I haven’t even mentioned health insurance or any other potential perks. Notwithstanding that, your employer hopes to generate an income of $38,525 p.a. with your skills whilst they pay you just $25,000 p.a.
You can draw one of two conclusions from this:
- Your employer is an idiot, and you are not worth the cost
- Your employer is making money out of you that you could ultimately be making for yourself
This line of reasoning essentially asks you one brutal and potentially life changing question: do you value yourself as highly as your employer does? If you do, congratulations – leaving work behind just became a hell of a lot easier.
The Necessity of a Safety Net
There is just one piece in the puzzle that absolutely needs to be filled, and must not be compromised on. You must have a safety net. I am not here to tell you to take stupid risks. I am here to tell you that you might consider taking calculated risks.
So what is your safety net? It would traditionally be an amount of money that equals several months’ worth of outgoings. But it could be something else – for instance, the guarantee that a job is waiting for you if you change your mind. The point is, you need to be comfortable that you won’t be left in a position where you are unable to meet your outgoings.
I do need to make a clear distinction here. We are not talking about you being 100% certain of your security. Because no one ever is. For instance, employment does not guarantee 100% security (far from it). You just need to get comfortable enough with the situation you propose to expose yourself to. The definition of “enough” is up to you.
Could You Leave Work Behind Now?
I’ve covered some key principles in this article:
- You need time to make money – the more time, the better
- You probably don’t need to make as much money as you think
- If you have a safety net, you have an open door to opportunity
I don’t know what your online endeavor is. I don’t know if you even have one yet. However, I believe that plenty of people who thought of leaving work behind as a pipe dream may now have a completely different perspective.
If you think that you cannot work towards building a viable online business with an additional 8 hours a day, you are not yet in a position to leave work behind. However, if you believe that you can use your skills to execute the simple formula of time + application = income, you may well be ready. Right now.
What are you waiting for?
Images courtesy of The Chive, ToniVC and prescottspies