Looking at quitting my day job????

[Bernie Weishapl]

Jim, you have gotten some good advice here. Markus and Ian are dead on in their advice. My only comment would be to hold on to your job for the year you have left to get full benefits. During this year which will go faster than you think, I would get all my ducks in a row so to speak. As Ian said get your marketing, accounting, insurance, etc. all ready to go. Do a few jobs during this year so you can just step into this without missing a beat. 5% is 5%. That could pay your health insurance.

I have a clock repair business with woodworking on the side that I do part time. I repair a lot of clock cases and build clocks for sale. I have often thought of quitting early and doing this full time. I sat back, have watched and talked with others who have went the early retirement route. 5% doesn't sound like much now but as the years progress each one of these people I have talked with said don't be silly like me and quit with 1 or 2 years to go. There will be seasonal flucuations where when I first started I am glad I had my main job to get me by. I don't worry so much about it now but will finish my 30 years then will retire to do this full time. I have about 2 years and that will go pretty fast.

Just my $1.298.

[Jim Hager]

Thanks for all the kind replies. I have studied this thing pretty thoroughly and still cannot make up my mind for sure. I will have to move on this one way or the other come March. That is when the school district will offer me another contract and I will have to say yea or nay. Come July 1 of 06 I will either still be in my rut or off and runnin. My quandry is that I can't decide. I'm all over the road as if I had been to the local pub too long and now driving myself home. Maybe it is just not time for me to decide just yet.

I know in my heart that I will make it just fine because I will have a decent retirement income that is more than lots of people around here live on every month. Is that enough for 10 years from now with the 3% COLA. I don't think anybody can say.

[David Giles]

It's exciting to try something new. I've started five businesses over the last 17 years. Two failed, two were average and one made good money. All were fun to try.

What's the worst thing that can go wrong? Can you live with that? If so, great! If not, better rethink.

Can you identify today where 30% of your first year's income will come from? Specifically, do you have a contract or handshake with someone who will pay you for at least four months work? If not, solve this problem first. A reasonable risk is finding the other 70% of the year's income. Wishful thinking is trying to find 100% without a past track record.

There are two parts to a successful business: selling it and execution. Everything else is secondary. Become equally good at both activities.

Your character will be judged based on how you handle the money. Consider the following priorities:
1) Taxes (FICA, self employment, etc). Don't mess up here. These are not nice or forgiving people.
2) Suppliers: A purchase is a promise to pay.
3) Employees: Ditto. This doesn't include you, you are the owner.
4) The company: treat the business as a separate entity that needs upkeep, maintenance, etc.
5) Yourself. house payment, truck payments, bills, food, etc.

It sounds like you have everything in place to be successful. Good luck and we hope you make a million!

[Scott Coffelt]

I guess I may be the odd man out here, sounds like you have it started now part time. I know 2% doesn't sound like much, it does add up. If it were me i think I would hold that for one more year. In that time, spend some time, money and effort into developing your business--officially (if not already). Get your legal stuff in order, spend some money on marketing materials, begin focusing on the type of clients you would like to have. If you are doing it part time, most likely you have not figured in what you would need to charge to go it alone. You might start charging that for awhile to test your level of business. Like I said, I may be the odd one out here.

[Jesse Cloud]

I retired early about a year ago. Took a stiff penalty, but I have not regretted it one minute. I asked myself if the crap I would have put up with back at work was worth the money I would have made, and it was a definitive no. I am saddened to see a lot of people who just can't let go, even those who retire jump right into another job they hate. What is the money worth to you?
Sorry if this sounds like a rant, but you really pushed a button ;^).
On the other hand, I asked a pro onetime if he had any regrets and he wisely said that doing something you love for a living can kill that love. I don't know if anyone can really give you any advice thats any better than whats in your heart.
My 2 cents worth.

[Michael Gabbay]

Jim - Since you've paid off the mortgage and are basically at full retirement then I'd say go for it. Make sure you know your total costs however before you make the leap. Things like health insurance (if not included in your retirement) and shop insurance may add up. Worse comes to worse you can get a job at Wal-Mart.

On the other hand you might consider staying on the extra year and bank as much as you can to build up the reserve that you'll need during the lean times. Going to a fixed income does pose its challenges. My FIL retired several years ago a few years too soon. He sometimes regrets having the fixed income but overall enjoys life more now then when he was working.

Good luck!

Mike

[Jon Olson]

Interesting thoughts....as a young guy, retirement is not directly on my mind but satisfaction in my work is VERY important to me. I'm losing my job currently and had a ton of interviews and phone calls but in the end I accepted an offer from my friend's company b/c of the satisfaction and trust i saw working from him was more important than the potential money at a number of start-ups.
Lots of hobbiests, who make the jump to selling, lose the love they had for the hobby. Make sure you get up everyday and look forward to "working" and if that love is not there, take some steps back and evaluate why you want to sell your products. We live in a very materialistic society so be prepared to be compared to the Walmarts/Target products.

Good luck!!!

jon

[Tom Jones III]

Wait for it. You said that you can't make up your mind. You are about to enter a project that will be extremely hard, do you really want to face hard times when you are never really sure if you made the right decision?

I quit my job while I was in college and started working for myself (computer programming). Although I was young and didn't have a mortgage, I had a wife to support and college to pay for. It was wonderful and I sometimes consider going back to that, but it was hard. I can't imagine being in that situation if I wasn't sure that was where I wanted to be. I knew I was doing the right thing, balls to bones.

It is great to pump this forum for information on the "how-to", but if you need to ask anyone IF you should ... then the answer is you shouldn't. When you find yourself so excited that you can't stop telling people about the shop you are going to start, then it is time.

[Jim Hager]

I've got some of this stuff covered already. I have a steady flow of clients for whom I make rp doors and cabinet parts and also do retail of drawer glides, lumber and plywood. I am well known in the area, I have a website. www.hagerwoodworks.com

I have a pretty good portfolio of completed jobs in a fairly wide arena. I love the weekends at home working in the shop. I got my LLC covered earlier this year. I will by 49 in April.

What gives the courage to go out on my own. My gut I guess.

Sorry about all the ramblings, I do however appreciate everyone's posts to help me make up my mind. They do help. A lot.

[Chris Giles]

Jim,
Fifteen years of fulltime woodworking for all the marbles, wife and kids and all the responsibilities that go with it, and I still can"t wait to get down in the shop every day, seven days a week. The fulfillment that this profession provides is not like any other. Only you can decide if you are this dedicated to this profession, but if you believe you are, then do it. Don't let the numbers and worry dissuade you from your true passion. If you've managed to make a decent living this far, why would you think this endeavor would change that? It is YOU that provided your living, not the employer paying you all these years! Believe in yourself, my friend. You won't regret it!

[Tom Hamilton]

Hi Jim:

You've have received excellent counsel from the Creeker's so I don't think I can add much new.

A couple of recurring thoughts pop up in this thread:

You have a shop and customers so you can get a quick start.

You want to change but I don't think a read that you've had enough teaching, in other words, you are not an ineffective teacher. Or said in the positive, you are still an effective teacher!

You are not sure you're ready this year, and you only need one for full retirement. This to me is the critical issue. The 2% difference is forever. You might calculate the difference in life of retirement income with and without the 2%. If you apply a little growth factor to all or part of the 2% it will be a sizable amount of dollars in 25-30 years.

Know your market and charge for it. Richard, Marcus and others have this exactly right. You have no competition, because no one can do what you can do. Charge accordingly.

So, if you came to me I would suggest spending the next year defining a business plan, in writing, securing your full retirement, and continuing to build projects as you can fit them in during the last year of work.

I retired in 1990 from my own businesses and 15 years with Procter & Gamble to manage investments and volunteer in the community. I've enjoyed every minute and I know you will also. Good Luck, Tom

[Ed Breen]

Jim,
Quite a few years ago at age 50 I got the axe from a high corporate position. In my earlier years I had taught special education both in public schools and at the University. My wife wanted to return to Oklahoma and so we did where we took over a small shelterd workshop with an annual budget of about $40,000. Not even close to my prior salary or bonus situation.
Today, 26 years later I go to work every day quite happy. We budget about 7 million a year, but are doing what we are happy doing, regardless of all the extra junk that sometimes comes with the job.
Get your extra year in and go at it full bore!!
Good luck
Ed

[Tom Stovell]

Joe, my retirement benefits will be reduced by 5% by retiring one year early.

My wife looked into retiring early from her teaching job. She wasn't eligible to receive any retirement until the age of 56. This is Ohio, one needs to have 30 years or age 56 (I think)

Tom

[lou sansone]

well I really can't add anything to the discussion except the observation of how careful and thoughful the responses have been to a serious question. This really is a great place to exchange ideas, and a great bunch of folks as well

thanks
lou

[Jay Knoll]

Jim

My wife and I quit our "big jobs" when we were 45. Didn't have kids to worry about educating so that wasn't an issue. Lived on our sailboat for 2+years. Moved back ashore and started wondering what we were going to do with the rest of our lives! Unexpected things happen, most of them good. We started a home computer training business. some of my former clients started calling and I could do jobs for them (my non-compete clause was 2 years). Now almost 13 years later we describe ourselves as "under employed". And it is working! We are happier than when we were chasing around doing the "big job", healthier, and have much more free time. We downsized, moved to a lower cost area and found that our quality of life is much improved.

Heck, I even had time to start learning how to do woodworking!

Don't under-estimate the emotional challenges you might face. A large factor in male identity is our work. I had what I characterized as "job withdrawal dreams" for about 3 years after I quit. And I was doing something I had dreamed about doing for MANY years!

The point I am trying to make is that in addition to all the other good advice you're getting is to be open to possibilities. You may end up using your skills in ways that you haven't anticipated.

It seems that the economic aspect of the decision is a no-brainer, you aren't going to get hit hard by "going early". You will have a monthly check coming in, it just will be a pension rather than a paycheck. Perhaps a session with a financial planner or your accountant will give you a dispassionate evaluation of the financial aspects of your decision. Then, the question really comes down to the emotional aspects. If you're really hot to make this happen then you'll go into it with all the energy you need to be successful. I am not suggesting that you can't have doubts, hey that's part of the deal. But on balance if the excitement doesn't over power the doubts then I'd wait until it does.

All the best in your decision. Keep us posted!

Jay