Should I get a job?

[hatterasguy]

Need advice, not sure if this is the forum to ask this in.

I'll be graduating from college next spring with my degree in International Business Management. Through my friend I'll probably have a chance to get a pretty good paying job at a local company. Around $50kish a year, plus benifits. Its hard to pass up a nice steady paycheck at this point. Its a good job, and if I wanted could turn it into a good career.

But I want to work for myself, here is what I want to do. I'm currantly starting my own real estate development and holding company with my uncle. However I think its going to take 3-5 years to really be profitable and liquid enough to the point where I can live comfortable off it. (IE pay myself $50k a year)

Here is what I am thinking, please give me some feedback.
A)
1. Take the job, and do just enough to get by, live on that money. I want to move out and its going to cost me to do so. Heck rent alone is going to be $1k a month from one of my uncles places. I'll also owe about $15k from school which I want to get paid off ASAP. $15k is pretty good though some of my friends have $100k!!:smx4:
2. Keep building the company, and insted of taking money out of the company to live on, re invest 100% of the profits.

B) Just build the company full time. However I think this option has a few draw backs.
1. Getting loans with no income is hard.
2. Being flat broke sucks, its no fun. This option will assure that for a few years.
3. I'll have to use some of my profits to live.

I'm thinking about going with A. I work now and go to school so its like having two full time jobs. I don't really see any problem with doing it for 5 more years. I'll just drink more!:smx6::smx6: My good friend is going to med school so by the time he is out and making $300k a year I should be right their with him, lol! :icon_super:

 

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[BLK85]

Do what you think will make you happy. If you want to work for yourself go for it start the business. I would love to work for myself, but the problem is I cant think of anything I could do good at doing my own business. The one Idea I have is getting me nowhere, I guess marketing it is my problem...

If you have to get a part time job while the business is getting started to make your living expenses. You dont have to live in a nice place or drive a nice car.

 

[PEERless]

Welcome! Good questions!

Before you listen to my advice, check out where I'm coming from:

• 24yo
• BA in International Business
• +/-$15K student loan debt
• Own a young LLC (no profit yet)
• Own one investment property
• Positive net worth (but not liquid and not close to $1M)

And I have a day job. Two, actually!

Take the job. You need cashflow to keep you alive, even if your business idea is the best one in the world, you must live long enough to enjoy it. Taking the $50K (or $30K or whatever) will keep you from starving.

Just spend every waking, non-working moment on your own biz. Look forward to that day that you can get out of the world of the E (employee). Today is not that day -- yet.

...also a note about your student loan debt. Check your interest rates before rushing to pay it off. If may be some of the cheapest money you'll ever own.

Anyway, good luck. You'll get lots of responses to this question, I'm sure. I hope mine helps a little.

 

[Runum]

I agree with PEERless on this one. You have to get yourself something to gain traction with. Work the job and build the business after JOB hours. Good luck.

But you also have to have a plan:

http://www.thefastlanetomillions.com/your-goals-your-fastlane-plan/544-how-develop-your-plan.html

 

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[PEERless]

^A thoughtful response, but I do want to point out one thing:

...figure out how quickly you can pay off that bad debt, and do it.

My student loan debt is 4.10%. Can't you beat that by investing the money elsewhere? Maybe not in today's economy. The traditional (Suze Orman-type) wisdom is that cheap debt is good debt.

Hatteras, not sure how "new" you are, but I'm saying that debt repayment is not necessarily the best investment. In my case, if I had $1000 extra lying around, I should not put it toward my student loan debt -- as long as I can make >4.10% wherever I do put it.

 

[Bilgefisher]

Let me explain my situation, its somewhat similar.

I started a RE company in October 07. I had no job and was living off saving I had when I was in the Military. My first house flip netted a grand total of $3500 split two ways. I made money, but it didn't exactly get me anywhere. 2nd flip was similar.

In Feb I started work again after 2 years with no steady job. I decided to get a job for a few reasons. First the bills need to be paid. While I kept them minimal, I still had bills. 2nd, the job gave me a steady income. That steady income was needed to begin my plan. Notice I said my plan. Others may be able to do without that steady income.

The steady income has allowed me to buy a house. With the built in equity, I effectively doubled my net worth. I will use that equity to work on the next phase of my plan.

The downside is lost time. I lose 40 hours of work time plus 20+ more hours in work related time per week. I use that as motivation to increase my passive income to the point where I can quit that job.

The job is merely a stepping stone. A tool. When I no longer need that tool, it will be put away.

Hope that gives a real life example that you can weigh your options against.

 

[Kung Fu Steve]

Take the job,

you gotta eat...

just don't increase your expenses and buy that new house and that new car until the business can pay for it.

took me a lot of discipline.

I just leased my first brand new car, which was really exciting, but I waited until my business could pay for it. (I pay myself mileage, I actually make out better that way instead of the company just paying the payment)

 

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[hatterasguy]

Like others have said above I view it as a tool. My area is fairly expensive to live in, I calculated $36k is about as low as I can go and still live a reasonble life. Health insurance alone is a big monthly nugget. I'd love to move out of my house next year, and to do that I need some cash coming in every week. I havn't really had a good steady paycheck since 2006 when I started to sell RE, and I miss that. Now I have crappy steady paycheck's because I quit my good job.

Make no mistake I vew a job as a short term tool to gain some traction. With credit and income from the job I can get construction loans to build on my own. I can partner with my cousin who will do a lot of the work since thats his job. The only difference is that the money will be coming from me, and of course I'll do a lot of the work as well. But he will have the time that I will lack since I will be working 40 a week.

I'm lucky in the respect that I have an uncle to partner with who has very deep pockets. He is bank rolling my first deal that should be together within the next month, with some luck. The problem with hard money is what it wants from you, IE its expensive. At this point in the game I need it, but after a few deals... My profit margin will probably be greater on projects if I provide all the capital, find the deal, and my cousin helps with the work. Also since my bills and living expensives won't eat up my profits, I think I can grow it faster.

Also I want to plow the capital into rental units to give me a nice steady cash flow. If I had a decent job I could just get a mortgage on a 3 family and live in it, buy a couple of more and I'll have a good base to support myself. No matter how I look at it, I'm going to need about $36k a year to support myself. Luckly at $1,500 a pop on rentals thats quite doable.

I'm very conservative with debt, if it doesn't make me money I don't want it. That student loan will be gone 12 months after I get out of school. I only have one credit card, and refuse to take out any kind of car loan. If a loan isn't making me money I don't want it. Now my company is another story, I want it to eventualy lease me an S class...