$95K. It wasn't enough. My time building my product was cut short by unexpected health problems, which not only accelerated my cash burn, but also made it more difficult than usual to find my next job when I needed it. I landed hard, on my ass, though I eventually got to my feet again.
Ask HN: How much savings did you have before quitting your industry job?
51–60 of 76 posts
Re: Ask HN: How much savings did you have before quitting your industry job?
#52my balance was negative 2k. i had to pay a monthly payment to cover that loan and i still quit my industry job because i realised that time was money too. the pressure helped me find ways to survive and i did.
Re: Ask HN: How much savings did you have before quitting your industry job?
#53$20k in the bank
$500/mo recurring
negotiating a $15k consulting project
several other potential projects in early talks
Remember that runway = cash/burn_rate. Lowering burn rate was a key enabler: I was able to find a rent-free living situation for a few months and that put me over the edge to quit. I also have a nice safety valve in that at the end of the runway, I don't crash and burn, I walk right back into an industry job.
Because my burn rate is much lower than my former 6.5k/mo industry pay rate, I expect this to go much further than the 3 months pay I have in savings. That said, I'm being conservative and would only commit myself to 3mo terms at the longest for office/rent.
I don't claim to know anything about the sufficiency here, it was just my best guess. Comments welcome :-)
* There are no guarantees, but I received 3 offers @80k+ in 1mo of searching, so I like my odds. On a related note, always prefer data like this to a gut feel of your employability.
(throwaway -- don't need prospective clients seeing my financials)
Re: Ask HN: How much savings did you have before quitting your industry job?
#54$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…
If you're in that situation (can crash at your parent's pad) you should take advantage of it.
Remember now it's not just about "not getting evicted", it is also useful to have working capital.
I have a project I'm working on that will probably cost $600-$800 of computation in a Hadoop cluster in Amzazon AWS assuming I don't screw it up and have to do it twice.
In my situation I can "just do it".
To make an analogy with Poker, you do not want to be short stacked.
I know many "entrepreneurs" have an idea which they could move forward with personal investments in the $50-$5000 range. Instead of making a cool demo or any kind of prototype, they go talking to angel investors and they wonder why they get nowhere.
Somehow though, they manage to find $150 to give to Time Warner and $150 to give to Verizon every month.
For a while, for instance, I was talking w/ people in NJ, CT (imagine a donut centered around NYC) about applications of text analysis in financial services. Lots of talking to investors, but no demo.
I spent about 40 hours and about $12 (domain name) on a demo over the course of six months, which failed. It's material for a blog post. I can say I didn't know anything at all about the problem when I started and now I know something.
Also you really gotta pay attention to taxes when you're self employed. I lost about a year because I owed the IRS and NY about $15k of estimated tax I didn't pay, so I took a job I shouldn't have taken. I can be philosophical about it because I met one of my competitors at a conference and he was bouncing off the walls because he'd spent a year fighting with the technology transfer (prevention) office at his uni.
Re: Ask HN: How much savings did you have before quitting your industry job?
#55I think it's better to count in time rather than dollars... I just quit last week with approx 14mo, but I'm just starting so who knows if it was a good move :)
Re: Ask HN: How much savings did you have before quitting your industry job?
#56[deleted]
Re: Ask HN: How much savings did you have before quitting your industry job?
#57On the order of $4,000, though in my circumstances it was less risky than that number would suggest, since I already had covered-the-day-job cash flow from Bingo Card Creator and strong odds of successfully filling a consulting pipeline by that point. (I'm not counting my retirement account, which was in the low five figures, since I wasn't planning on touching it for any reason short of "I'm dying in the snow.")
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Re: Ask HN: How much savings did you have before quitting your industry job?
#58Wrong 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.
What's your side project if you don't mind me asking?
Re: Ask HN: How much savings did you have before quitting your industry job?
#59$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…
"I have no idea why anybody buys a single family house;"
I can give you a few personal reasons which hopefully resonates with a few others. I prefer having a "detached" home. I dont want the hassle of sharing anything with anyone. That does not mean I dont want neighbors. But I am not interested in hearing when my neighbor flushes their toilet. I like having a backyard with some vegetation. I like having a driveway that I don't have the share (lot of new townhomes do that) etc etc.
Biggest reason: Kids. Yes you can live with them in condos/townhomes etc. but the autonomy/freedom of a single family home cannot be undermined.
It is not always about money and ROI. Life is a lot more than that and this coming from someone who values money a lot.
Re: Ask HN: How much savings did you have before quitting your industry job?
#601 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…
Similar. No fancy vacations. No cars. No house. No fancy cloths and only occasional eating out. Only draws are DirecTV, ISP, and phone which I could halve if needed. Put max into 401K, rest of savings in investment fund. Mutual funds are up 71% (yes 71%) YTD. Can easily save that 26K in a year's time, but the reality is when you don't have all the cost sinks of a nuclear family you should save, save, save as that money will grow a ton before you retire over several decades compared to the "shit, I better start investing" thought many people have when they've already gone totally gray.