It may well be that your longing to run your own business is really a longing for more control over your destiny or not wanting to feel like a wage slave anymore. It’s long been recognised that people who have more control over their work and are doing something meaningful tend to be happier and get sick less often. What’s remarkable though is that even a change in mindset towards believing that your are in control of your destiny has the same effect. The best tip that I've ever seen to combine this with a halfway house towards running your own business is the Freedom Fund, a tip from Michael Neill, the American life coach who’s website and newsletter are well worth a visit (links below).
Here, with Michael’s permission, is the Freedom Fund…
One of the most common reasons people hire me as their coach is to assist them in leaving the "security" of their jobs and making the leap of faith into the world of self-employment.
What generally throws them for a loop is when I encourage them to become self-employed BEFORE they leave their jobs.
Let me explain what I mean…
The employer/employee relationship can generally be described as being based on an energy exchange - I agree to give you a certain amount of money, in exchange for which you agree to do whatever I say (within reason or not, depending on your job and your point of view).
Being self-employed means that you are in the employ of yourself, which is to say you agree to give yourself a certain amount of money, in exchange for which you agree to do whatever you say (again, within reason or not, depending on your job and your point of view!)
How can you become self-employed before leaving your job?
I thought you’d never ask… :-)
1. If you don’t already have one, open a high-interest instant access savings account and a regular checking account.
2. From now on, arrange to have every pay check, commission check, interest check, etc. go directly in to your savings account.
3. Ask yourself how much money you need each month to live a "comfortably frugal" lifestyle. This number will become your new monthly self-employment salary.
4. Once a month, pay yourself your agreed upon salary from your savings into your checking. If you want to have a separate account for property taxes and other periodic expenses, you can make a payment into that account as well.
The difference between what your company deposits into your savings account and what you pay yourself into your checking is the beginning of your Freedom Fund - between 6 to 12 months of comfortably frugal living expenses, allowing you the freedom to make non-financially motivated choices about what to do next in your working life. (Most banks will actually be willing to print "Freedom Fund" right on on to your deposit slips).
So what do you do when you've got six months salary (remember - YOU determine your salary!) in your Freedom Fund?
(Preferably not by buying a new car, large screen TV, and Caribbean cruise, which would sort of work against the spirit of the exercise… :-)
2. Begin a debt reduction program
Want a guaranteed return on investment at rates as high as 20%, 25%, and sometimes even 30% per year? Then you might consider investing in debt reduction before you put more money into riskier investments with lower rates of return.
3. Invest in yourself
Ben Franklin once said "the man who pours his purse into his head will never be poor" (and he wasn’t even selling personal development trainings when he said it!). Continuing your education can be an important part of any financial independence program, (but be sure that you either love what you’re studying and/or are 99% sure it will increase your earning potential.)
4. Make your move
Once you are self-employed, you become disconnected from the financial control of your company. Since they don’t pay your salary anymore (although they do of course continue to contribute to your Freedom Fund for as long as you work there), you are not beholden to them in the same way.
In fact, once you are no longer financially dependant on your job, you may decide to stay right where you are. The lure of self-employment is often really a craving for freedom, and once your job turns from a "must" into a "could" you are free to enjoy it, sometimes for the very first time.
For the rest of you, your Freedom Fund will become a gateway to a world of possibility, where pursuing your "big grin" goals and "wow!" dreams is not so much a leap of faith as a parachuted descent into the life of your dreams.
Whatever you decide, have fun, learn heaps, and begin creating your Freedom Fund today!
©2002 Michael Neill All Rights Reserved
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