Wrong question. How much passive income from a side business do you need before quitting your industry job?
$5,000 is a good place to start
Ask HN: How much savings did you have before quitting your industry job?
41–50 of 76 posts
Re: Ask HN: How much savings did you have before quitting your industry job?
#42$10k liquid + $15k in withheld taxes the government owes me. At least 5-8x that in an HSA, 401k, SEP, IRAs, Roth IRAs and tax-advantaged government bonds paying 7.5% that I bought a few months after I cashed out of the Janus fund in Dec 1999. (My broker fired me for that) I'm going to hold on to those bonds as long as I can, and I'd much rather borrow against the equity of the "home" I own at a lower rate. (I bought…
this is the only realistic post i saw on here. the people who say they saved 2k before starting their venture are probably 18-22 years old and crashing at their parents' pad. if you're a grown up, i don't see anyway you can start a venture without a year of savings built up or some sort of income (investments, part-time work, etc). let's say you give your venture 6 months and you fail. you'll need a few months to get…
18-23* :) Use what you have available to you. Took me 6 months and now I'm ready to go. It would have been a significantly harder position to be in otherwise. Before I am even leaving I'm saving up around 20-30k or ensuring a minimum of 4k coming in per month though. A stable income is definitely a must.
Edit: I suck at english apparently.
Re: Ask HN: How much savings did you have before quitting your industry job?
#43About $20k, in a mutual fund. Didn't plan to spend it all but I did, quickly. I was working at a grocery store though, so little "risk". :)
As others have said - you need to learn to live cheaply. Savings dwindles amazingly fast when you have no income.
Personally, I dropped my cell phone & cable TV, and got rid of my car. It took about 3 years to get back to "normal" - would never have made it without slashing expenses.
Re: Ask HN: How much savings did you have before quitting your industry job?
#44I budgeted about $30k for 3 years off (my wife continued to work), made between $10k and $20k/year from my FemCal app, then went back to work when the $30k ran out.
No regrets.
Re: Ask HN: How much savings did you have before quitting your industry job?
#451 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…
Well, I'm not sure how I'd do it starting in your situation. When I got out of school I lived in a cheap apartment and took public transit to work, which let me save about half of what I made. I didn't start retirement saving until I had a 1 year buffer saved. Since then I've made sure to always have that much saved when moving to a more expensive place though I haven't upgraded that much.
Currently I put 1/6 of my pre-tax income away for retirement, then put 1/5 of the remaining into savings, and another 1/5 into my emergency/charity account. I donate 1/4 of that account to charity at the end of the year, and I also dipped into it when my apartment caught fire.
I'm probably not going to be able to keep all of this up when I have kids, but I'll be doing it until then.
Re: Ask HN: How much savings did you have before quitting your industry job?
#46Wrong question. How much passive income from a side business do you need before quitting your industry job?
I made around $60K/month for a good 2 years from a side project, while still keeping my day job.
Nowadays I make close to $8k/month passive income, and I regret not quitting back then. I could've easily made double the amount if I had focused strictly on that.
Re: Ask HN: How much savings did you have before quitting your industry job?
#47About $100k. It lasted me 4 years. Frankly, I sort of wish I'd had a lot less. I never felt any sort of urgency like "This must succeed." No regrets though. The last 4 years have been a lot of fun. :)
Did you spend all 4 years on UsableHQ? And why do you think it failed?
Re: Ask HN: How much savings did you have before quitting your industry job?
#48If 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…
This is the way to go (adapted to your circumstances of course)
I did this calculation for myself, and concluded that the only way I have is being fully profitable before quitting my job
Re: Ask HN: How much savings did you have before quitting your industry job?
#49$0. I was stupid, but through sheer dumb luck I made it.
Re: Ask HN: How much savings did you have before quitting your industry job?
#501 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…
My general philosophy has been moderately upgrade your life style every 3 bumps in earnings- this has led me to live pretty bare bone in a lot of aspects. In my case I was very lucky with my overall earning increasing about 10-15% a year, yet I lived in the same apartment, drove the same car and pretty much only spent money on travel and food (my vices). This also allows you to cut down a lot easier in the case of a pinch.
I don't own but rent - economically in the long run buying would be more advantageous but being able to move in a heartbeat or quit my job to start my own business took priority over that. I am religious about saving cash. Every month before my paycheck (used) to drop in my account I would put a decent percentage into savings - this was after 401k contributions (which I did about ~10%). If i received a bonus at work 90% would go directly to savings either in the form of my personal investment account or cash reserves (with 10% always going to 401k). The remaining 10% was for the family slush fund.
From a financial planning perspective 10% might be low for 401k but I believe I can make my money work harder outside of it. My household cost is similar to yours (~45k), I add 10k to keep sanity (vacations with wife, anniversary presents, etc).
Disclaimer: This is working for a established tech firm paying towards the high end of industry average and working there for 5 years. If you are in a startup your salary is lower and lopsided towards equity so achieving this cushion I imagine is a lot harder.