Tag Archives: Financial freedom

The Top 5 Things That Changed When I Started Working for Myself

For fourteen years, four months and eleven days, I worked in software. My job was like a lot of jobs: conducted in a cubicle or sometimes remotely, during regular business hours, and almost every week of the year.

In July of 2019, I left that job to make my investment business full time. I still remember the feeling when I walked out of the office for the last time into a hot, sunny summer’s day…”Wow, this is it, I’m really gone”.

Looking back on the past 21 months, I decided to write down a few of the biggest changes in my life since leaving the world of corporate employment:

1) Your time is your own. When I wake up in the morning, I eat breakfast and do a little journaling. I can plan out a day focusing on whatever I want. The ability to design your own day is a huge difference from working at a company, where you’re crossing off items on someone else’s to-do list.

2) You find yourself suddenly immersed in new areas on a regular basis. In the last couple of months, I’ve done deep dives into COVID, vaccines, meme stocks, and startups. Some for business purposes, some just because I’m interested. When your time is your own, you find yourself delving into new topics a lot more frequently.

3) It’s harder to decide what success means. At a job success means not getting fired, getting a raise every year, and maybe a promotion. How do you define success in your own business? That’s a lot more subjective, and I tend to move the goalposts further whenever I reach a goal. This can put you on something of a treadmill. It’s important to get off sometimes and smell the roses.

4) You have more energy. Even though I almost never use an alarm clock anymore, I wake up earlier and am more energetic in general. Being able to do what I want with my time gives me energy. Doing what someone else wanted all day tended to drain it.

If you can make money through something other than selling your time, like investing or writing or selling a software product, you can remove that ceiling on your income.

5) The sky is the limit. My investments this past year made far more than I ever made working, and new investments I’m planning in early stage startups could blow away all previous earnings if things go right. (Or go to zero if they go wrong!)

If you work for a company, your raises usually come yearly and they’re only so much. There’s a limit to how much an employer will pay for an hour of your labor in most fields. What’s more, you only have at most 24 hours a day to sell! But if you can make money through something other than selling your time, like investing or writing or selling a software product, you can remove that ceiling on your income.

If you can generate enough income to fund even a modest living, and you aspire to work for yourself, I encourage you to do it!

If you can generate enough income to fund even a modest living, and you aspire to work for yourself, I encourage you to do it! If you can’t, build up a side business over time and eventually you’ll be ready!

For more on improving your life, check out these posts:

Photo: “The Workaholic NSA” by herval is licensed under CC BY 2.0

Americans Are Using Their Stimulus Checks to Get Out of Debt

Stimulus checks for $1,400 went out this month to most Americans. I found myself wondering today, did they save it, invest it, or just blow it?

Data indicates that the biggest use of stimulus funds has been to pay down debt. A Census Bureau survey found 52% of people mostly used their checks to pay off debt, while only 28% mostly spent them.

Repeated rounds of stimulus have left households with the lowest debt levels on record:

Households finished 2020 with $14.1 trillion combined in checking and savings accounts, compared with $11.4 trillion in 2019, according to Federal Reserve data. Their debt-service burden—the percentage of after-tax income used to pay off debt—fell to its lowest level in records going back to the early 1980s.

Nonetheless, the impact of stimulus funds on consumption has been notable. Bank of America found a huge spending spike among its customers:

As the latest round of federal stimulus payments reached bank accounts, credit and debit card spending soared 45% overall last week on a year-over-year basis and 23% over two years, according to data aggregated by Bank of America.

I strongly advise people with debt to pay it off before they do anything else. If you owe money on a loan at 10%, for example, when you pay it off, you are automatically guaranteed a 10% return on your investment! And that’s exactly what it is, an investment in your future.

As someone who invests for a living, if I could get a guaranteed 10% return anywhere on earth, I’d be singing Hallelujah and dancing a jig. Take the easy win!

For more on markets and finance, check out these posts:

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Photo: “Monopoly Guy Graffiti – Rich Uncle Pennybags” by Indrid__Cold is licensed under CC BY-SA 2.0