When to give up the 9-5 job? 18 posts by 12 users

Posted: 07/29/2010 at 05:45PM

if you are comfortable with the income you are making with your properties or doing real estate investing i think is the time. and or if you start thinking your job is taking a lot of your time -instead of working with your business and making more money your time is occupied with regular job i think it time to call it quits.

a few friends of mine quit their job because it was taking up their time when they can be their own boss and making their business successful
so it's up to you really to decide with your own situation.

Posted: 07/29/2010 at 06:57PM

Hey Dennis.

I would make sure I know exactly my cost of living, including medical insurance (at least until we get our free insurance from Pres. Barry). Then build a reserve of at least six months of that cost of living number. Make sure you are able to continue to grow your business and cover your cost of living.

I certainly haven't gotten there yet, but I'm working on it.

Posted: 07/30/2010 at 10:31AM

It's always a leap of faith at first. Thequestion for me was whether to sell my owner operated businesses and get immersed in real estate full time. I took 6 weeks off, drove around the country visiting old friends, got back home and decided to sell my businesses and concentrate on real estate.

That was ten years ago and was the best financial and personal decision I ever made. However, you must realize that you'r e out there without a security blanket, there are no regular Friday paychecks. I personally would not have taken the leap without a financial cushion and lots of experience and expertise in commercial real estate. You probably need experience , knowledge, and analytical ability to be successful as a full time real estate investor. The more capital you have the easier it is - but I have seen people with limited capital successfully launch full time careers as real estate investors.

Posted: 08/03/2010 at 07:13AM

Sorry, but IMHO, this "Just Over Broke" is guru BS to entice people to buy their courses. They try to make it sound like there is something shameful to being employed by someone else and that wholesaling, doing short sales, fix and flipping or whatever is somehow "better" than having a job.

Here's my view - you're trading one job for another. Really, there are two routes to "quitting your job". One is to have enough investments that the returns give you enough money to live off of. "Enough" is a very personal number. By investments, I mean totally passive - dividends from stocks, coupon payments from bonds, interest from CD's, rental income. Achiving that truly does give you freedom because there's no effort involved in making that money come in.

The other route is to be self employed. Guess what - you're still employed and still have a Just Over Broke. In fact, its almost has some big downsides over working for someone else.
1) You're almost always on commissioned sales. Turn the crank and do deals and money comes out. Stop turning and the money stops.
2) You rarely have any benefits. Medical in particular can be a real issue if you're truly self-employeed.
3) You have to make all the decisions. A few bad choices and your toast.

A lot of what we're told is "real estate investing" is just being self employed. Wholesaling, fix and flips, property management, developing, doing short sales -- all area JUST JOBS.

Getting to the first goal of having the money just come in is the real goal here, IMHO. Its actually the one we're beat into every day by lots of different people. Like the "retirement planner" every brokerage house has on their web site. Swapping you job working for someone else to being self employed is a very different sort of decision. It may well be the right one, and lots of people are very successful with that choice or are much happier or both. But its still a job.

Posted: 08/03/2010 at 07:30AM

Great post, Jon Holdman. The dream of leaving the day job too can turn into a nightmare.

Posted: 08/03/2010 at 09:23AM

In reference to the OP, I am asking myself basically the same question. I don't think I like my answer but I think it is a wise one.

To just have 6 months of living expenses in reserves COULD BE achieved rather quickly if the stars and the deals align just right. However, for me, and my wife especially, to be comfortable with me leaving the 9-5 (how is that 9-5 sometimes = 80/wk) I need to prove that this REI thing is sustainable. I.e. I need to at least match my current income with REI income for at least 6 months.

For me, just landing 1 big deal or two and having that money in reserve is not enough for me to leave the 9-5.

I wish my answer were different and it could be quicker, but that is what seems prudent to me.
And I'm seeing the truth of what Mike M says. The REI JOB takes a lot of time as well.

Bob

Posted: 08/03/2010 at 01:03PM

I agree with Jon that the "Just Over Broke" is guru nonsense! Many people with good jobs like what they do and make very good money.

However, I would also say that there is no comparison between having a job and being self-employed - especially in the rental property business. I'm just about to start my 8th year in this business and I can tell you that working 12-16 hours a week beats having a job any day! Better yet, I get to pick when I work and when I don't. I love it!