MBA1812 How Much Money Do You Need To Quit Your Job? + Free Ride Friday

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Hey O. Welcome to the Hunter. Because every improvement counts. That's why we deliver daily 10 minute business lessons for the real world. I'm your host, your coach, your teacher Omar Zenholm. I'm also the co founder of Webinar Ninja, an independent software company I started with my co founder back in 2014 and today's episode is Free Ride Friday. On Free Ride Fridays we give away a lifetime membership to one of our programs. If you want to win a free ride to our course Easy Course that retails for $500 over at EasyCourse Co so you can learn how to build your own online course. Leave us an Apple podcast rating and review and you enter our weekly random draw we call Freeride Friday. Listen in on Friday like today to see if you won. We'll be announcing the winner later on in today's episode. It's that simple. It's our way to say thanks for showing us some love. In today's episode you will learn how much money do you need to quit your job and become a full time entrepreneur. I get asked this question more than any other question. Whether I'm out to dinner with other people, whether it's over WhatsApp or in an interview. So I wanted to address this topic head on in today's lesson. Making that leap that full time entrepreneurship leap is a big one. It's a momentous moment. I remember when I did it and it can be quite scary because you're not really sure how much you need to prepare in terms of finances. You don't want to take a leap and then step off a cliff. So in today's lesson, I'm going to give you my best advice when it comes to this topic. How to come up with an actual number so you are prepared and how you can get closer to that day where you say goodbye to your job and hello to full time entrepreneurship. And it could be sooner than you think. Most people are actually quite surprised at the results once they go through some of the exercises and equations that I will share with you. No one's going to give your life your future on a silver platter. You have to go and get it, you have to plan for it, you have to work for it and then you got to make the decision to make it happen. I'm going to help you through that right now in today's lesson. So let's get into it. Let's get down to business. Let's lifelock how can I help? The IRS said I filed my return, but I haven't.

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I made the leap to full time entrepreneurship after working one of the most stable jobs and careers in the world. I was a teacher for 13 years and after 13 years in 2012 I quit my job, my very very cushy and senior position at the university I was working at and man, I was really good at my job. I was advancing in my career. I was way ahead where I should be for my age when it came to my trajectory in the world of education. I was a head of department at 25 and moved up from there. So the decision to leave my job and become a full time entrepreneur was a tough one because I was leaving something so secure, something I know for sure I can do really well and continue to do for as long as I want to. But I knew I wasn't getting any older and I Realized I didn't want to work as a traditional teacher for the rest of my life. I didn't see myself doing that for the rest of my life. And I thought, hey, I'm not getting any younger. I need to make this decision now. Now I need to tell you that before I took that leap, I was not new to entrepreneurship. By the time I got to that point, I have started and created and run multiple businesses, big and small, in different industries. Services, online products, arbitrage, e commerce. And the reason why I share this is because I gave myself enough years and enough chances and enough reps to figure out how to do this entrepreneurship thing. How to earn money, how to run a business, how to manage people, how to hire people. I wasn't perfect, and there was still a lot of room for improvement. But I wasn't quitting my job to start my first business ever. I had a bunch of failures under my belt already. I made money, I lost money. The point I'm making here is a lot of people ask the question, how much money do I need saved up before I quit my job? I say, that is actually not as important as how much experience have you had as an entrepreneur, as a business builder, before you quit your job. The beauty of a side hustle is that you have the safety net of your job. And yes, it's limiting what you can do as a side hustle because you're not working full time in your business, but you can have a taste of it. You can see if people actually like your product or like your business. But more importantly, if you like doing business, if you like being an entrepreneur, what kinds of business do you want to run? What kind of products are you interested in? Are you into B2B or B2C or retail? Are you into software businesses? No. Maybe you like networking businesses. That's the point I highly recommend before you quit your job is to get some reps, build some businesses on the side. And you can easily do that like I did while you're in a job, side hustling, evenings, weekends. And it's going to be fun and exciting. And again, you can't afford to fail. You can afford to crash and burn several times and learn a ton of lessons that you just simply can't learn in a book about business, about yourself, about management, while keeping your income. Okay? So I highly recommend doing this. It really helped me. I learned a ton. I made a ton of mistakes. I learned a ton from it. But the biggest lesson I learned was what kind of entrepreneur I wanted to be. What kind of business I wanted to run, what kind of products and market I want to be a part of, what kind of products I wanted to sell and what market I wanted to be a part of all these things. And the only way to know this is to try things. Try things, try things. And I side hustled for 13 years. So before you start thinking about finances, take my advice and think about experiences. Get some experiences in. Only way I can equate this is let's say I wanted to be a professional table tennis player, okay? It would make more sense if I was absolutely new to table tennis. I don't know anything about table tennis. I've never played it before. It would make more sense for me to ease my way into it. I wouldn't quit my job and say, hey, I've never played table tennis before. I'm going to become the next table tennis champion. I'm going to get the gold medal in the Olympics. I'm going to quit everything and just dedicate my whole life to table tennis. No, you wouldn't do that. What you would do is you'd probably pick up table tennis on the weekends in your free time, maybe you'll get a lesson or two. Maybe you'll join a league in your local community. Maybe you'll enter some local tournaments then. And then maybe you'll say, hey, I'll invest in a table tennis table at home and start, you know, playing a little bit more in my free time. Maybe on my next holiday, instead of going somewhere, I'll go to table tennis camp. Then once you get to a certain point, you're like, okay, I won a few local titles. I'm doing pretty well. I'm actually pretty good at this. I've worked through my kinks. I got a coach, I got all this stuff going for me. Maybe I should go for the Olympics. And that would probably take you a few years before you got to that point. Now, I know I belabored at this point about experience and getting your reps in, but it is important. Now let's get into the finances of things. One easy way to know how much money you need is to find out what are your costs. How much do you spend every month on all your bills, your mortgage, your rent, your food, your car, all that stuff? How much money leaves your bank account or gets charged on your credit cards every single month? Know that you can figure this out in 30 minutes or less, maybe even 10 minutes, just by going into your bank accounts right now and adding up the numbers. Most bank apps will tell you, you spent this much money this past month. You can see the total debits in your accounts. Add them up, there you go. Now, you know, let's say that figure is $6,000. Many people believe that if you're going to start a business with zero capital, it's good for you to have at least 12 to 18 months of Runway, meaning you need that much money in the bank. I like to err on the 18 month side. Why? Because you want to give your full time efforts a good year. And then if things don't work out and you don't see a way to pivot or change, you still have six months to pivot into another job or go back to your career. And it doesn't put you in a dire situation. So in this example of $6,000, 18 months would be $108,000. If that sounds like a lot of money, that's because it is. That is a lot of money. That's how much money you spend every 18 months. Right? So a good way to reduce this or to have this money is to lower your expenses. What can you cut out? Can you downgrade your car if you are on a monthly payment? If you don't have a monthly payment on your car, what if you sold your car and maybe took public transport? Now if you think, hey, whoa, Omar, I'm not going to sell my car, this is extreme, then I'm going to ask you to reevaluate how bad you want to be a successful entrepreneur. Because that was no question for me. I was like, a car. No, I can live without a car. I've been driving all my life. I love cars, by the way, but I knew in the future I can buy a car later on once I get my business established. It was an easy ask, easy sacrifice. If it means I'm going to have the Runway, I need to focus on my full time entrepreneurship endeavors. Can you downsize your house? Move from one house to another, whether it's rent or buying? Can you move into a different city or neighborhood or even state or even country? I know you might be thinking, Omar is lost his mind. What is he talking about? No, there are plenty of people that do this. There are plenty of people that sell their house, sell their car, and move to a different country and live for a year to run their online business on the cheap with families with children. Chiang Mai in Thailand is known for that, where people can live quite well at a fraction of the cost in their home country. Now, if that's a little bit too hard for you to take that leap. That's okay. Most people can move down the street and save $1,000 on their monthly housing expenses or next town over. Again, this is temporary. If you can lower your expenses in any way, this is amazing because this is going to allow you to get to your Runway faster. So say, for example, you reduce from 6,000 to 4,000 by doing some small things like eating out less and buying less things or toys. So now, Instead of needing $108,000 in Runway, you only need 72,000. I know people that moved in with their parents for a year while they're working on their business, drastically reducing their costs. If you're single, this is easy, okay? Very easy. I know a lot of people that are in my co working space that live on $2,000 a month easy. And they have a very good life. They have roommates. They eat most of their meals in the co working space where they have free food or free lunches or they pack a lunch. They still have money spare for clothing and nights out on the weekend. They don't have a car because they just live in an apartment with other roommates, comfortably walking distance from their co working space. So the lower you can reduce your monthly expenses, the easier it is for you to get to that Runway level or that Runway amount you need another way you can get to that Runway amount and quit your job sooner than later is what I mentioned earlier. Start building your business now. Make some sales, get some side income, and don't touch that money. That money is for your business, and you can put it towards your Runway. Have that money get deposited into a different account, even as a savings account or even just a business bank account. Since you're starting a business and if your business is doing quite well, in a couple years, you should be able to make that money in those two years. Many people also sell some of the things that they just don't value anymore over a business. I mentioned your car, but some people sell other things like their baseball card collection or their jewelry. I know this sounds a little bit like maybe desperate, but all it means is that you're willing to sacrifice things that maybe are not as important as your dreams. Some of us have some pretty fancy things like nice watches and designer clothing that will go for a lot of money on ebay. So all of this is fair game. So you'll know your number once you've reduced all your costs. Hey, I can live off this much money. Times that by 12 or 18 months. That's how much money I need to quit My job.

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To wrap up today's lesson. Becoming a full time entrepreneur is a huge moment. It's exciting. You should be proud that you're making this decision. But it's not just a professional decision. This is a personal and life decision. Your life is going to change majorly when this happens. You will become somebody else. Your priorities will change. How you live every day will change. So this is why it's really important for when you make this decision. You're planning towards this exit of leaving your job, that you include anybody that's close to you in that process. And what I mean by that is, like people that live with you in the same household, your significant other, maybe kids or a parent that lives next to you or maybe even a roommate. Why? Because your journey to do this is going to be challenging and you're going to need as much support as possible. You need everybody on your side to help you and to remind you and to push you and to be okay with the fact that, hey, all right, we're not going to take a fancy vacation this year because we're putting it in the exit fund in the quick my job fund, Right? It may require a family meeting, may require everybody just to be on board, but that's going to help you get to where you want to go. You can't do this in isolation. I shouldn't say can't, but you're making things really difficult on yourself for no reason. You can get the support of others. And my last piece of advice is this is not the time to be proud, okay? Park your ego at the door, okay? You're trying to achieve some amazing things in your life. You want to build a business. You want to be a successful entrepreneur. This is a path that not a lot of people take, okay? You're the exception to the norm. So you have to make exceptional decisions and have an exceptional mindset. You can't be too proud to downgrade your car. You can't be too proud to ask for help or to say, hey, maybe I'll rent out that spare room or maybe I will move in with a friend or with a family member. This is the easy part. Building the actual business is a lot harder than some of these decisions. The decisions you're gonna make in your business are a lot harder. So this is sort of a practice ground for you to in decision making and triaging and prioritizing when it comes to your new life. Thanks so much for listening to the $100 NBA show. Today is Free Ride Friday. So let's see who won this week's Free ride. And the winner is CDN Listener. CDN Listener says great format. 5 stars. I enjoy Omer's conversational style and his awesome tips for business and for life. This podcast is gold. Keep podcasting Omar. Thank you CDN Listener. You are our Free Out Friday winner. Your mission is to email me over at Omar100- MBA-NET so I can hook you up with the lifetime access to Easy course over at easycourse Co. If you want to win a free ride, just leave us an Apple Podcast rating and review and you enter a weekly random draw. Just like today. It's that simple. Thanks so much in advance. Before I go, I want to leave you with this. When you're on this journey of building up your savings for your Runway, and even when you're in that first year or two of building your business and you're living off a Runway or trying to be frugal, you're going to be on what I call the no train. Okay? You're going to have to get used to saying no to a lot of people. You have to say no to going out or spending money or expensive trips or no to beautiful things you see in the store because it's not in your budget. Just get used to being comfortable saying no. That's okay, because when I say no in that moment, I know it's a yes for the future. I'm saying no now so I can make it a yes in the future. A yes times 10. Because that's the success I will have as an entrepreneur once I get this thing off the ground. But I got to give myself a fighting chance. I got to give myself that momentum in the beginning. Thanks so much for listening and I'll check you in Monday's episode. I'll see you then.

I'll see you.

Take care.

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