About a year ago, I set a goal for myself to seek early retirement as aggressively as I could. Part of it is knowing that I had at least two years left at my current job and living at the same place while my wife finished her graduate school. It is now a year later and I have a little over a year left before we need to make the next big decision in our lives. Most likely, it will result in us moving, but that leaves me with an even bigger decision.
With moving to a new city, where my wife will have a job, what does that mean for me? I will be finishing my degree very soon and I can't help but think about my future career moves. As I have been thinking about it now, there are two major options that I can take:
Option 1 to Early Retirement: Self-Employment
The first option is what I thought I wanted a year ago. In many ways, I still want it. Yet, it doesn't come without its challenges and sacrifice. Sure, working from my home office sounds nice. Being able to sleep in if I want sounds even better. In reality, I know that I wouldn't be able to just relax and hope that the money comes in month after month, let alone continue to grow.
Right now I am working full time and working on my side business. I am getting two paychecks. Granted one is bigger than the other… but having a little bit of diversified income is very nice. It's hard to give up money once you have it. I don't really need the extra income right now, but I am trying to build up passive forms of income that will allow me to do whatever I want. The primary reason is that I don't want to be stuck in a 9-to-5 job, regardless of how well it pays.
In going the self-employment route, I see myself with a lot of potential. Accompanied with the potential, there is a lot of risk. I could lose my income 6 months from now and be forced to find a "real" job that would ask what I had been doing in self-employment. But, it really does have potential. I am working on my side business for only 14 months right now and it earns a little bit of money. Imagine if I put in a couple years at full-time. I've heard that the first year things go pretty slowly too. Eventually, traffic just takes off.
Option 2 to Early Retirement: Two (Three) Incomes
The alternative path is to continue doing what I am currently doing. Work a day job for 5-10 more years, while working on my side business at night and on the weekends. Save and invest all the extra money that we make so that we can eventually live off of our investments at an early age. Investing strategies and tips can be found at the Online Trading Academy as well as several other investment education sites. This option would slow down my progress to increase my income from my side business, but it would provide security and ultimately allow me to invest more sooner.
This option seems increasingly more likely as I hear more and more stories of early retirees saving for 10-15 years before they decide that it's enough. Part of me also worries about the increasing cost of health care and the ability to help others with the financial security that having both incomes (in addition to my wife's income) would provide. As I already hinted at, I hate the idea of having to go back to work for someone else. Trying to explain away what would be a large gap in my resume would be difficult. Combined with the limited range of jobs that my two degrees offer me, it seems that I would be playing a big risk with jumping out of the job market this early.
As you can tell, it's a tough decision. I'm still not sure what I will do. The one thing I do know is that I have a little over a year to see if I can produce enough income from my side business to justify quitting my day job. If I can reach my financial goals that I have set for myself, I may just give self-employment a shot when we hire movers and move to the new city.
Shawn Manaher is a former financial advisor, has founded 5 online businesses, and is a coach, speaker, podcast host, and author. He's been featured on The Consults Corner on TAE Radio, The Writing Biz, What's Your Story, and more.