Author Topic: Young entrepenieur sells business to hike--EEEeeek that might be dumb. HELP!  (Read 2124 times)

MMHubb

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Hello Everyone!

I am pretty new to MMM and his teachings and I am BRAND new to forums...so please be kind!

My husband and I are about to make a huge change in our lives, and after reading many financial blogs, I just feel all over the place with what our next move should be. Any advice, or even some encouraging words would be greatly appreciated!!

Right now we own a small personal training studio that we plan to sell in April.
Why sell?
Well #1. We are just bored with our job. Although we grew it to be something very successful, it just doesn't bring us joy anymore.
#2. We HATE where we live. Hate the town, hate the weather, so we want to move.

This bring us to our (not so great) "plan."
Our plan is to sell our gym in April so we can go on a 6 month (approximate) backpacking trip and hike the entire Pacific Crest Trail. Once we return, we plan on moving to Charleston, SC and find completely new careers---with any luck.

We decided on this plan about 6 months ago, and at that same time I stumbled across MMM's blog. When we first decided to do this trip, we had lots of debt--credit card debt, student loans, and a car loan. Our goal is to have all this debt gone before our trip in April, and I am happy to say we have just $5000 left of our car loan, and then we are done-zo! Bye Bye debt!

My question to you is, what do we do when we get back from this trip??

We should have no debt, but very little, to no money to our names except for what we sell the gym for (about $20,000 after tax).
Do we invest it (real estate, index funds, etc.)? Do we just try to survive and get new jobs with the hopes we don't spend too much money in the process? Or, are we just dumb for making this jump to begin with??

I am young, immature, but motivated and have the dream of being financially independent one day. Please help! I'll be listening.

Thank you,
-M




Mr. Green

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Consider leaving the 20k in a savings account until you establish new jobs. You won't be leaving the money idle that long and it may allow you to look for a longer period in a new city or simply be less stressed about finding new jobs knowing you have some cash in reserve. An untimely market drop with all your funds invested would not feel nice while you're looking for employment.

Also you may need more money than you think for your hike. I attempted a thru-hike of the AT this summer. It's very common for people to quit early due to money issues so you may find having cash on hand saves your hike.
FIRE, Take Two.

MMHubb

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Thanks for the advice!

I have slowly been saving for the trip. Still need to buy some more gear, which isn't cheap either.

How did your AT hike turn out? I actually live right off the trail, very close to the Delaware Water Gap.

Miss Piggy

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$20,000 doesn't sound like much for a "very successful" business. Are you sure you have it priced appropriately?

Mr. Green

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Thanks for the advice!

I have slowly been saving for the trip. Still need to buy some more gear, which isn't cheap either.

How did your AT hike turn out? I actually live right off the trail, very close to the Delaware Water Gap.
Yeah I was amazed how expensive some of the gear was. I started in Maine and got injured there, so my hike ended pretty quickly. :(

It might be a little different for the PCT, since there aren't towns as often as on the AT, but the rule of thumb most people used for cost while on trail was $1,000 per month. Some folks could do a hike on only a couple thousand but that meant staying away from restaurants and motel rooms in town.

Good luck with your hike! I wouldn't mind taking a shot at a PCT thru-hike one day.
FIRE, Take Two.

$200k

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My question to you is, what do we do when we get back from this trip??

You will probably experience some form of shell shock for roughly 2 weeks.  Your long vacation will be over, you will have just come off of a life-changing hike with unparalleled beauty, and you will be faced with the reality of heading back to "normal" life with a limited amount of funds to float you.  Be prepared for the "shock" and just go easy on yourself.

You might decide, like me, that after going on a such a hike (mine was a failed attempt at the JMT), that that is the type of lifestyle you want to carve out for yourself, and then you will have clarity on what you want the next stage of your life to look life.

You don't know what job you want next, and that is fine.  You have room for mistakes.  But, you are a young entrepreneur and your desire to hike the PCT tells me you are a driven and competent person.  You will be fine.  There are only so many competent and motivated people in the world and workforce--since you are one of them, you will always have a job.

The thing that help ME after a 6 month hiatus was to adopt an abundance mindset.  You probably have seen that term thrown out there in the blog-sphere.  Thinking that "Of course there will be work for me when I return to the workforce" really allowed me to cope with the idea of leaving a good job, taking a long break, and then getting a new job in a new City.  Which I did.

The abundance mindset will also make it easier to accept that fact that you will probably spend thousands and thousands for gear and the PCT.

Hope to see you on the trail.

 

RedwoodDreams

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It isn't a dumb idea at all. It's a fantastic idea. You're young, free, healthy, and have a decent nest egg. This is the perfect time to do something like this!

I'm twice your age and have never regretted doing these kinds of things at a younger age. Go for it!

Then figure our the 'what next' when you return. As others have pointed out, your ideas about what what next might be could change drastically during this life-changing trip as well.

ENJOY!

Dicey

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Another "do it" vote here. Nothing to lose. What's your budget for the trip? Believe me, you don't want to be worrying about how to pay for your next meal all day long.
I did it! I have a journal!
A Lot Like This
And hell yes, I am still moving confidently in the direction of my dreams...

newstache

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+1 on going for it! Also would think that a very successful gym would be worth more then 20K.
I will be on the JMT at the end of Aug-early Sep! have fun and go for it!
Also I have quit well paying stable jobs with my wife to move. We went from Minnesota to New Zealand in 2012 and found work quickly enjoyed it so much we applied for residency and lived there for 3.5yrs. we now have permanent residency and can go back any time! We moved back to MN in March 2016 after traveling slowly back for a month. Found even better jobs and things are great!

Fishindude

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I like the plan, but $20K isn't much money to live six months on, plus whatever time it takes to get new jobs, money to rent a new place, etc.
Do you have health insurance if one of you were to get sick or injured?

mikedom

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My wife and I thru-hiked the PCT in 2013. PM me and I'll send you our blog link.

We saved a bunch of cash (this was before MMM, so we had more cash than we should have). I leveraged a previous colleague for a new gig, so it happened relatively fast, but we were still out of work after the hike for about three months. During that time we lived with my in-laws, so living expenses were pretty low.

You are not dumb for doing this, we have no regrets about doing the trail, it was an amazing experience. We hope to do it again someday.

This was in 2013 (pre Obama care) so we bought catastrophic health insurance, I remember it being < $200/month. Luckily we didn't have to use it.

former player

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Small businesses aren't always easy to sell.  Add in rented premises rather than owned, add in the loss of the personal relationships built up by the current owners. What is being sold is essentially a job in which the buyer has to work hard, has to quickly establish relationships with clients and has to take the risk of all the expenses, such as rent, etc.

OP: congratulations on sorting out your debt and good luck with the hike.

I'm with others: keep the sale proceeds in cash so that you have easy access during the hike, for your move to Charleston (travel across country, plus rent deposits etc.) and to cover expenses until new jobs bring in wages, which could be a full month or more.
Be frugal and industrious, and you will be free (Ben Franklin)

MMHubb

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$20,000 doesn't sound like much for a "very successful" business. Are you sure you have it priced appropriately?

I guess "very successful" is subjective. To be honest, we are lucky to even have someone interested in buying it. We have been looking for someone to take it off our hands for a few years now and I fear if we were to increase the price, our buyer would "walk away" knowing we have this trip planned and use it as leverage. I still fear he might use our timeline against us to talk down the price.

MMHubb

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My question to you is, what do we do when we get back from this trip??

You might decide, like me, that after going on a such a hike (mine was a failed attempt at the JMT), that that is the type of lifestyle you want to carve out for yourself, and then you will have clarity on what you want the next stage of your life to look life.

You don't know what job you want next, and that is fine.  You have room for mistakes.  But, you are a young entrepreneur and your desire to hike the PCT tells me you are a driven and competent person.  You will be fine.  There are only so many competent and motivated people in the world and workforce--since you are one of them, you will always have a job.


Wow! Thank you so much for your encouraging words and advice! Sometimes I feel like I go into "panic mode" when I think about life after the trail, but I try to calm down and think about what a life changing experience this could/will be.

I also joke that while I'm out there, I will come up with some cool new invention, get rich, and then not have to worry about getting a job when I get back lol.

MMHubb

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Another "do it" vote here. Nothing to lose. What's your budget for the trip? Believe me, you don't want to be worrying about how to pay for your next meal all day long.

I have not started working on my budget yet (just another thing eating away at me!) We are waiting for the 2017 trail maps to come out, and then once we have a better idea of when/where we will be making our stops, I can get a better idea of what I want our budget to look like.

Thanks for your encouragement!

MMHubb

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Do you have health insurance if one of you were to get sick or injured?

We are at a loss with this health insurance thing right now! Any advice??
The plan we have now won't cover us out West (I have no idea why) and it seems like catasprophic plans don't exist anymore.
I don't even know where to begin...

MMHubb

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Small businesses aren't always easy to sell.  Add in rented premises rather than owned, add in the loss of the personal relationships built up by the current owners. What is being sold is essentially a job in which the buyer has to work hard, has to quickly establish relationships with clients and has to take the risk of all the expenses, such as rent, etc.

OP: congratulations on sorting out your debt and good luck with the hike.

I'm with others: keep the sale proceeds in cash so that you have easy access during the hike, for your move to Charleston (travel across country, plus rent deposits etc.) and to cover expenses until new jobs bring in wages, which could be a full month or more.

Thank you for understanding. I have to say, it really is hard to sell a small business. I consider myself lucky to have even found a buyer, regardless of the price they are getting it for. 

Auldtriangle8

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Do you have health insurance if one of you were to get sick or injured?

We are at a loss with this health insurance thing right now! Any advice??
The plan we have now won't cover us out West (I have no idea why) and it seems like catasprophic plans don't exist anymore.
I don't even know where to begin...

When DW and I traveled abroad earlier this year we used World Nomads and it was a little over $200 for the both of us for a month. I checked their website and you can use it in the USA as long as you're traveling more than 100 miles from your permanent address in the USA. Looks like it's $250/month for a couple traveling in the USA now from a quote I just got on their website.


MMHubb

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Do you have health insurance if one of you were to get sick or injured?

We are at a loss with this health insurance thing right now! Any advice??
The plan we have now won't cover us out West (I have no idea why) and it seems like catasprophic plans don't exist anymore.
I don't even know where to begin...

When DW and I traveled abroad earlier this year we used World Nomads and it was a little over $200 for the both of us for a month. I checked their website and you can use it in the USA as long as you're traveling more than 100 miles from your permanent address in the USA. Looks like it's $250/month for a couple traveling in the USA now from a quote I just got on their website.

Fantastic! Thank you so, so much!!! I will definitely be looking into this.

Mr. Green

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Do you have health insurance if one of you were to get sick or injured?

We are at a loss with this health insurance thing right now! Any advice??
The plan we have now won't cover us out West (I have no idea why) and it seems like catasprophic plans don't exist anymore.
I don't even know where to begin...
While maybe not ideal, you can get travel insurance for a hike like this. It won't meet the ACA's standard for health insurance you you'll be looking at a fine at the end of the year but if you income for the year is low the fine will be fairly small. The only caveat with travel insurance is that it typically doesn't work within 50 miles of home, assuming you technically still have a home. This will cover you for the most likely types of things you'll face on the trail (stomach bugs, pulled muscles or ligaments, possibly a broken bone). The treadway on the PCT is much smoother than the AT so falls may not be as big of a concern.
FIRE, Take Two.

thelittlebird

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In relation to health insurance - my health insurance technically was just local to Ohio where I live, but when I fell and broke my finger in Maine on the AT, the hospital  I went to was technically "out of network" and shouldn't have been covered, but it was - not really sure why - maybe cause it was an emergency? But to have surgery to fix my finger, I did have to come back to Ohio.

jwright

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I would love to take a trip like you are planning.

Just a word of warning, Charleston is expensive and jobs are tough to find (unless you want to work in a restaurant).  You can find more of a bargain for rent in some of the outlying areas, but downtown rents for $800-$1000 per bedroom and up.  An large number of people move here everyday so there is a lot of competition in the job market.   If you want somewhere with a low cost of living, this isn't it.