General Discussion > Post-FIRE
For those who do PT consulting - how did you handle the transition?
Monkey Uncle:
I'll be FIREing in about three weeks. According to all my number crunching, I should never need any job income ever again. But being the conservative type and knowing that sometimes things don't work out according to plan, I am considering doing a little part time consulting. I don't have any concrete plans at the moment; just a vague notion that I'd like to keep a toe in the water in case something unexpected happens and I need to ramp up and earn 20 grand or so for a few years.
If I do this, my consulting gigs most likely would come from the professional contacts that I currently have in place. So it would be wise to get something started shortly after my FIRE date, before everyone forgets about me and fills the hole that I'm leaving with someone/something else. But I have absolutely no desire to jump right in and start working 15 or 20 hours a week immediately after I pull the rip cord. I'd like to take at least six months or a year to decompress and not think about my former work at all, establish a new pattern of living, and just do what I want. Then, if I still feel the need to work for pay, I would like to take on gigs on my own terms. But I'm concerned that I may not find any opportunities if I wait that long.
I've also considered doing small amounts of volunteer work as a way of keeping my face fresh in people's minds (my line of work presents a number of opportunities for volunteering). That would feel less like work to me, but it's still not the complete unplugging that I feel like I need to really clear my mind and get past the career hangover.
So for those of you who have done something similar, how did you handle this transition?
Monkey Uncle:
Thanks for that perspective, Freedom17.
AdrianC:
Congrats on FIREing!
I haven't done quite the same thing. I've been a self-employed consultant for most of my career. The last couple of years I've taken on a lot less work, so now I'm doing part-time consulting (4 billable hours this week, for example).
Do you know how you will structure the business side of things? I have an LLC, general liability insurance, etc. There's some advantages - business expense deductions (cell phone, home office, car mileage, travel expenses) and health insurance premiums are deductible. You might need to register your business and get on your clients' vendor lists. That can be a hassle. Alternatively, you can probably work through another company already on the vendor lists. I've had subs work through my business like this. I take a small fee (10%) for this, as a favor to my clients. I expect other firms would take quite a bit more.
You'd also need to think about an appropriate billing rate. A good starting rate is 2x your hourly rate as an employee, 1.5x at a minimum. Even better if you can find out what others are billing.
I intend to continue with some PT consulting. Like you, I don't need to do it for the money at present. It's good to keep the contacts, keep the skills current, and...I kinda still like doing it, especially when it's more on my terms.
Good luck!
gerardc:
--- Quote from: Freedom17 on December 14, 2017, 04:54:33 AM ---I was in very much the same situation, having FIREd almost 4 months ago I figured I'd keep the door open for a consulting gig in case I got too bored. The way I thought about it if consulting got in the way of hobbies or the lifestyle I wanted I could always quit.
I mentioned leaving full time employment to an old colleague who had just founded a startup and he needed my expertise. The great thing with this arrangement is that I work from home, from half way around the world in a very different time zone, and I only work 3 days a week. I only do the interesting work and just interact with my boss directly.
This has been working great so far, because I don't need the money I could be very firm on what I wanted and I got it. It's great to still have the creative outlet and mental stimulation minus all the BS that usually comes with working in a company. The best thing is I get to do the cool stuff and my boss has a whole team of people to do all the grunt work it takes to turn that cool stuff into a real product. So I get to see an amazing product built out of the cool work that I get to focus on.
Overall it's been a really positive experience, and the money has been great too. I'd say figure out exactly what you want and don't settle for anything less and don't do more than 3 days a week. If you find that it's getting in the way of hobbies you can always quit.
For decompression I setup the consulting gig and then took a 2 month break before starting the contract. This gave me enough time to enjoy life with no work and travel a bit.
I can imagine next year I may end up cutting back to 2 days a week but all in all consulting has been a great experience so far. It also let me see that work on your own terms can be really enjoyable.
Good luck!
--- End quote ---
Interesting, so I figure you don't get endless Skype meetings all day, you just get an email for your boss to "do this", then you work solo?
How good is the pay compared to FT (on an hourly basis, let's say)
Monkey Uncle:
--- Quote from: AdrianC on December 15, 2017, 08:07:44 PM ---Congrats on FIREing!
I haven't done quite the same thing. I've been a self-employed consultant for most of my career. The last couple of years I've taken on a lot less work, so now I'm doing part-time consulting (4 billable hours this week, for example).
Do you know how you will structure the business side of things? I have an LLC, general liability insurance, etc. There's some advantages - business expense deductions (cell phone, home office, car mileage, travel expenses) and health insurance premiums are deductible. You might need to register your business and get on your clients' vendor lists. That can be a hassle. Alternatively, you can probably work through another company already on the vendor lists. I've had subs work through my business like this. I take a small fee (10%) for this, as a favor to my clients. I expect other firms would take quite a bit more.
You'd also need to think about an appropriate billing rate. A good starting rate is 2x your hourly rate as an employee, 1.5x at a minimum. Even better if you can find out what others are billing.
I intend to continue with some PT consulting. Like you, I don't need to do it for the money at present. It's good to keep the contacts, keep the skills current, and...I kinda still like doing it, especially when it's more on my terms.
Good luck!
--- End quote ---
Thanks, Adrian.
I haven't done anything specific with the business structure yet; I think I'm not-so-subconsciously resisting due to my desire to unplug. But I have put some thought into it. I most likely would do a LLC because of the tax and liability advantages. This is looking particularly attractive in light of the tax reform bill's provision that allows a 20% deduction on pass-through income. I know what it would take to get registered as a vendor with my current employer. It's a real PITA, but absolutely mandatory if I want to work for them. I'd have to check into it for other potential clients.
I have some ideas about rates also. When I was an employee of a consulting company way back when, they charged 3.45x salary. I always thought that was excessive, which was validated when I discovered that the company gave big discounts to state government clients that were prohibited by regulation from paying those rates. It just so happens that I recently reviewed some proposals from several consulting firms for work similar to what I might do, so that gives me a more current idea of rates.
Yesterday I attended a big meeting with a company that my agency is regulating. I was talking with one of the company managers about my impending retirement, and he made it pretty clear that there are opportunities for me in his company. I didn't pursue the details in the short time that we had to chat, so I'm not sure if he meant consulting or an actual employment arrangement (in which I would have absolutely zero interest). Later on, one of the consultants who works for the company asked if he could contact me after I retire. I said yes, although privately I'm feeling pretty ambivalent about it. I don't want to close any doors, but I'm not sure how I feel about "switching sides," so to speak. Some of the companies we interact with, no way in hell would I work for them, but this one is pretty conscientious. Plus, I really don't want to jump into working any substantial hours right away. But I figured there's no harm in listening to what he has to say.
I also need to do some networking with the non-profits that partner with my employer on a number of projects. I would not be ethically conflicted about doing work for them, but they are cash poor, so I think the opportunities for paid work will be pretty limited. I am sure I can find some volunteer work to do for them, which could be a way to stay known until I find just the right low-stress paid opportunity, either for them or for my current employer.
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