Author Topic: Did you achieve FI by starting your own business?  (Read 2157 times)

CargoBiker

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Did you achieve FI by starting your own business?
« on: February 28, 2017, 03:07:58 PM »
Just throwing up a topic to get this sub-forum going.

Who here has reached FI by way of owning a business?

Do you still run the business, or was there a sale or some other exit event?


Looking back, would you have taken the same path, or would you have worked a job instead?

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StockBeard

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Re: Did you achieve FI by starting your own business?
« Reply #1 on: March 01, 2017, 04:58:52 PM »
Kind of. My hobby generates more money than I thought it ever would, and it now represents 30% of my expected income in ER. It also contributed to a large chunk of my egg nest over the years, although how much exactly I'm not sure... 20% maybe?

Looking back: would still have done the same thing. Note it's a hobby and I still have a 9 to 5 in parallel. I love the idea that f one of these two things fails, the other will probably still be there.

Lentils4Lunch

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Re: Did you achieve FI by starting your own business?
« Reply #2 on: March 01, 2017, 05:21:15 PM »
Kind of. My hobby generates more money than I thought it ever would, and it now represents 30% of my expected income in ER. It also contributed to a large chunk of my egg nest over the years, although how much exactly I'm not sure... 20% maybe?


What's your hobby?

StockBeard

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Re: Did you achieve FI by starting your own business?
« Reply #3 on: March 01, 2017, 05:40:01 PM »
What's your hobby?
Video games. I run a website on some video game niche, with advertising. Think MMM in terms of traffic, although it's not making anywhere close to what MMM has disclosed this site makes. I guess the finance niche is where it's at :)

CargoBiker

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Re: Did you achieve FI by starting your own business?
« Reply #4 on: March 01, 2017, 09:21:25 PM »
I guess the finance niche is where it's at :)

There is always money in telling people how to make money.

A lot of times, the better business isn't doing the thing that makes money, it's telling other people how to do the thing that makes money.
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SwordGuy

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Re: Did you achieve FI by starting your own business?
« Reply #5 on: March 04, 2017, 01:12:40 PM »
I sped up my date to FI by starting a number of different businesses.

Each of them contributed in some way to increasing my income or decreasing my costs, even the ones that failed.

maizeman

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Re: Did you achieve FI by starting your own business?
« Reply #6 on: March 04, 2017, 04:52:03 PM »
It's certainly speeding up the date a bit. But the frustrating thing is that the big money, if it ever arrives, would be well after I hope to be FIRE one way or the other.
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SeattleCPA

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Re: Did you achieve FI by starting your own business?
« Reply #7 on: March 04, 2017, 06:45:31 PM »
To answer the original poster's question, yes...

But FI with a small business is weird. You have a great investment generating a high ROI... but it requires (probably) a certain amount of on-going work.

And then another weird element... Very possibly, owning your own business will be fun enough that you'll want to continue your involvement. I'm FI, but I still work because I really love the folks I work with... and the work I do.
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Jon Bon

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Re: Did you achieve FI by starting your own business?
« Reply #8 on: March 05, 2017, 10:27:54 AM »
Most definitely.

I would still be spending 50 hours a week at work and 10 hours in the car if it were not for my small business. It set me free in just about 3 years, its been one of the best things that has happened to me financially.

That being said, yeah I do work 5-10 hours a week on it, but well worth the trade as I used to spend that much time just in the car getting to work!

Also I love this new topic!

jooniFLORisploo

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Re: Did you achieve FI by starting your own business?
« Reply #9 on: March 05, 2017, 10:42:35 AM »
Yes!

Big work up front, then ongoing income, then another round of big work, then more ongoing income. I do some small maintenance every year, but this path was one of several that made all the difference. In my mind, key was achieving not only cash but *also* time and energy. Time and energy that could then be used for frugal living, etc. I would focus on setting up a business one can work "on not in" as many of the entrepreneurship books recommend.

Knaak

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Re: Did you achieve FI by starting your own business?
« Reply #10 on: March 05, 2017, 05:48:44 PM »
I started a business with a few other people at the end of my freshman year of college.  That was my main income source from 18-32 years old.  We hit a rough patch along the way and I finally got a j-o-b shortly after I turned 32.  I kept the business going on the side after the other owners dropped out.  Now the business is doing better and I am 100% owner, plus I have my full-time job.  I'll quit the job the end of this year, at 35 years old, since I'll be FI.  I enjoy the business (travel industry), so I'll keep that going since it doesn't take much of my time, I can run it from anywhere, and I like getting free stays at ridiculously expensive resorts.

Looking back, would you have taken the same path, or would you have worked a job instead?

Same path.  The job gave me a peek into the world of being an employee and it helped me truly appreciate the lifestyle I had as a business owner.  Even though I probably could have made more money at a regular job and hit FI a year or two earlier, I still prefer the path I took.  The end of this year will conclude 3.5 years of what I'm calling the Office Space chapter of my life.  That's just about the right amount of time to get the full experience of being a cubicle monkey, develop a better appreciation for Office Space and Dilbert, and escape before I go insane.

arebelspy

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Re: Did you achieve FI by starting your own business?
« Reply #11 on: June 24, 2017, 10:18:14 AM »
Sort of.

The wife and I were teachers, which obviously doesn't pay well (first year we made 33k and 18k, respectively... final year, after 8 year's experience and adding Master's Degrees, we made about 44k each).  Yet we still retired at age 29, millionaires.

We did it via owning a lot of residential real estate.

So the reason I say sort of is that I can see the arguments why one would say "no" to the question of if we achieved FI by starting our own business.

No:
- We had normal (W2) jobs for an employer.
- We invested our way to FI (that investment being real estate).

I can also see an argument for yes.

Yes:
- We clearly didn't become millionaire early retirees before age 30 by being teachers, so it was something else that got us to FI
- The real estate investing was more like a business--run like a business, with systematic processes and time spent more like a business than an investment.

So if you consider it was our real estate business that got us to FIRE so fast, you might say yes, we achieved FI by starting our own business.

So... sort of yes, sort of no.  What do you think?  :)
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FIREby35

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Re: Did you achieve FI by starting your own business?
« Reply #12 on: June 24, 2017, 03:48:21 PM »
Well, other than not being fully fire, big time "Yes." I'm 32 with a family of 5 and 3/4 of the way there though. So, I think it's going pretty well.

I'd have to echo Seattle CPA. I imagine a small law firm is much like a small CPA firm. I've been trying to systematize and get more employees involved so that it is more a "business" than a "self-employed" type situation.** The more I get it into a good, solid, systematized, small business zone, the less I can imagine leaving - it's fun! Anyway, I'll accept that as a "problem."

As for if I'd have done it differently, definitely a "no." For one, I've made more than even the corporate attorneys in my area (that are my same age, of course). I've got a higher income potential. I also have worked dramatically less hours and had more flexibility. I get to choose my cases/causes and that is priceless. What more is there to have? Finally, I briefly worked in two different big, traditional style firms as summer clerkships and saw enough to know I'd never fit in.

**Quotes because I'm not using a strict definition. I hope the distinction between a business and being self-employed is understood by everyone.

SwordGuy

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Re: Did you achieve FI by starting your own business?
« Reply #13 on: June 24, 2017, 04:11:58 PM »
So... sort of yes, sort of no.  What do you think?  :)

Yes, absolutely.   Not a shred of doubt.

FIREby35

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Re: Did you achieve FI by starting your own business?
« Reply #14 on: June 25, 2017, 07:02:05 AM »
So... sort of yes, sort of no.  What do you think?  :)

Yes, absolutely.   Not a shred of doubt.

Agreed. Being a teacher and frugal provided you capital. Your fortune was built as an entrepreneur.

HipGnosis

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Re: Did you achieve FI by starting your own business?
« Reply #15 on: June 27, 2017, 10:41:23 AM »
my small business. It set me free in just about 3 years, its been one of the best things that has happened to me financially.
What's the business and how much did it cost you to start?!?

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Re: Did you achieve FI by starting your own business?
« Reply #16 on: June 27, 2017, 08:46:13 PM »
We will be! Our business has grown slowly--but we are beginning to take more risks with more confidence. We currently employ ourselves and three other full-time employees. Our FI plan projection is currently 10 years, but we are trying to cut that in half now pretty aggressively by doubling our business size before next year. Our goal is to get out in 5 years and sell to our employees, allowing for a monthly stream of income.  I think being an entrepreneur in a good industry has to be one of the fastest ways to FI. Plus it is incredibly motivating to think of unlimited earning potential versus the 3% annual raise you might expect annually as an employee.

BlueHouse

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Re: Did you achieve FI by starting your own business?
« Reply #17 on: June 27, 2017, 08:50:47 PM »
Another sort of here. I'm an independent contractor, basically self-employed. Doing the same thing I did in a job, but structuring the business so that Im the one making the profit and keeping my overhead low allowed me to more than double my income and sock away >50k per year in my 401k. That's getting me to FI in 10 years rather than 20. Too bad I didn't start sooner! 
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JayKay

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Re: Did you achieve FI by starting your own business?
« Reply #18 on: September 20, 2017, 03:53:09 PM »
Well, one thing I can say is that I did try to do it that way!  But after many business attempts over many years, the efforts have only set us back.  And not by a small amount either.  I haven't done the math, but just thinking about it, we've probably edged into six figures just in terms of lost wages, not to mention incurred debt.

(As someone else has mentioned, my rental properties could be generously considered a business and they've done well.  But honestly, I consider them an investment, so I don't count them.)

I still believe in the "X-factor" that a small business can bring, but I now think of a business like an expensive lottery ticket and treat it accordingly:

* You must pay for the privilege of playing
* You shouldn't play if you can't afford it
* Even if you win, it may not be enough to cover your costs
* You shouldn't put more into it than you're willing to lose (both time and money)
* Don't chase your losses.  If your business is not working, move on.

As for it being compatible with FIRE, the lottery ticket analogy is accurate here too.  Yes, there are people who's retirement plan includes (or consists entirely of) winning the lottery.  But to me, such a strategy would be terrifying.
« Last Edit: September 20, 2017, 05:03:20 PM by JayKay »

elvizzle

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Re: Did you achieve FI by starting your own business?
« Reply #19 on: September 20, 2017, 08:03:09 PM »
I had an internet advertising business and I used the income it to buy rental property.  I was able to FIRE by the time I was 30.  I went to a university for Computer Science and worked as a software engineer for a few years before embarking on my own.  I would definitely do it again.  Right now, I'm a SAHD thinking about what I'm going to do once the all the kids are school age.

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Re: Did you achieve FI by starting your own business?
« Reply #20 on: September 20, 2017, 08:24:08 PM »
Another sort of here. I'm an independent contractor, basically self-employed. Doing the same thing I did in a job, but structuring the business so that Im the one making the profit and keeping my overhead low allowed me to more than double my income and sock away >50k per year in my 401k. That's getting me to FI in 10 years rather than 20. Too bad I didn't start sooner!

Working to do the same.  Beautiful thing, too, is that once you're in business, you can move/adjust to new opportunities.  I'm doing a couple of things now, but have ideas to do a few others and am looking for when those opportunities arise to jump in there, too.  Any money I make simply helps us go FI.  And I'd love to continue these things even after FI.