I had about my annual salary minus taxes in savings. I also had 2 or 3 contracting gigs lined up.
In addition to all of that, I had zero debt.
Ask HN: How much savings did you have before quitting your industry job?
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Re: Ask HN: How much savings did you have before quitting your industry job?
#22If you plan on quitting your job, don't just follow what people comment here. The actual amount you need should be calculated yourself, based on your plans. 1) How much money do you need to get round per month. 2) Add a chunk ontop of that for unforseen expenses, broken fridge for example... 3) How long do you estimate you'll be working on your project? 4) Add a large percentage to that estimate for unexpected issues…
Include potential health issues in your unexpected issues if that's possibly calculable for you.
Re: Ask HN: How much savings did you have before quitting your industry job?
#23I had about my annual salary minus taxes in savings. I also had 2 or 3 contracting gigs lined up. In addition to all of that, I had zero debt.
Same boat here.
Re: Ask HN: How much savings did you have before quitting your industry job?
#24Number is pretty irrelevant if you're not relating it to expenses. Living with 4 roommates or something for $200 a month is going to take a lot less cushion than if you have a family of 3 and a mortgage.
Numbers can be described, as they are throughout the thread, in multiples of monthly expenses or other types of scales.
Re: Ask HN: How much savings did you have before quitting your industry job?
#251 year of expenses including rent,healthcare, food ,etc. When doing financial planning you should always try to save up to 6 months of all expenses. This is hard to achieve but the recommended number even if you are staying at your industry job. You never know what can happen.
Seriously, how do you do this? My family makes a good income, own a modest home, drive 10 year old cars, have $0 debt ex-mortgage and don't do exotic trips. We put 20% away for retirement. Our baseline cost to live including mortgage, property tax, food & minimal extras is probably around $45k. Our area has a tight rental market, so owning the house is a net money saver. Other than cannibalizing retirement, building…
Most financial planners usually say to build the 6 months before anything else - since if shit hits the fan you're likely to dip into your retirement which has penalties if you're pulling some out early.
Re: Ask HN: How much savings did you have before quitting your industry job?
#261 year of expenses including rent,healthcare, food ,etc. When doing financial planning you should always try to save up to 6 months of all expenses. This is hard to achieve but the recommended number even if you are staying at your industry job. You never know what can happen.
Seriously, how do you do this? My family makes a good income, own a modest home, drive 10 year old cars, have $0 debt ex-mortgage and don't do exotic trips. We put 20% away for retirement. Our baseline cost to live including mortgage, property tax, food & minimal extras is probably around $45k. Our area has a tight rental market, so owning the house is a net money saver. Other than cannibalizing retirement, building…
I think cannibalizing retirement (by significantly reducing how much you save) temporarily is the way to go.
If you make that decision, it also makes it easier because it reduces the amount of money you would need for six months expenses. If you're low on cash, you're less likely to put money into retirement savings anyway (since if it takes too long to get more revenue, you'd have to pay fees to make use of that same retirement money.)
Re: Ask HN: How much savings did you have before quitting your industry job?
#27I had almost a year worth of normal income stashed away. Plus my wife's income was also coming in. To be honest that was a really conservative move and not really required. I made a pretty comfortable amount plus had some pretty large side web jobs I helped build up my savings. It was a lot of after hours working though.
Pretty ironic to be talking about this today, because this is a year to the day I left my day job. I still can say it was the best thing I ever did.
Re: Ask HN: How much savings did you have before quitting your industry job?
#28Nothing. I was forced to figure it out quickly or go back to school.
Re: Ask HN: How much savings did you have before quitting your industry job?
#29First time: about two months salary. I'd just been laid off for the second time in two years, and rather than find another job in the same industry, I decided to try doing my own thing for a while. It was a great learning experience and I eventually came out ahead, but I basically lived month to month for several years.
Second time: about a year's salary in savings, and I had enough revenue to live on by the time I quit my day job. I was probably overly cautious, but my wife was pregnant and I didn't want to blow it.
Re: Ask HN: How much savings did you have before quitting your industry job?
#30None.
I don't know if it matters but this was in 2000 (and not in SV/SF). I was doing IT/help desk for a UPS call center with a few servers and 75 workstations (on a token ring network!).
We had been doing educational software in our spare time. We landed a couple decent contracts and I decided to quit and go for it (I was also a senior at Cal Poly and quit). At the time, my rent was $400/month and I wasn't married. We found an office for $250/month.
Of course 18 months later things got real tight. After the .com crash, a lot of california colleges got their budgets cut. But we survived long enough to sell the company at the same time a new one started and took off.
I'm sure there's lots of sound advice here and my story shouldn't be a model.
I haven't had a real job since and I'm still a senior ;)