Sometimes I hear from “corporate types” who are considering leaving their careers to become home stagers. One of their fears is giving up the $100,000 salary.
I can relate to that fear since that was my situation years ago when I longed for more independence and to do something more creative with my life.
But let’s put aside actual quality of life (which isn’t entirely dictated by how much you make) and look at the money fears. These apply to you whether you’re making $20,000, $30,000 or even $100,000 a year. We all have money fears!
What I realized when I became an entrepreneur was that you don’t actually need to replace your current salary to maintain your standard of living. Plus there are the physical and psychological rewards that come with leaving a stressful job that is sucking the life out of you for the independence of working for yourself doing something you love.
It’s important to realize that a conventional career has plenty of costs attached to it. First of all, you’re in a high tax bracket, so a good chunk of that income goes straight to the government. Conversely, in your own business, you pay less tax because of all the write-offs you get.
Next, if you’re earning a very high salary working for a company, they likely expect you to be attached to your Blackberry 24/7, so you have very little freedom or time off. This adds to the stress of being pulled in multiple directions and never having time to just wind down.
Your employer also expects you to look like an executive, so your clothing, dry cleaning and personal grooming bills are huge when you’re working in a major corporation compared to working from home.
You’re also probably working really long hours when you factor in business trips, meetings and commuting. Constant time pressure leads to “convenience expenditures” which really add up. For example:
- take out meals on the way home in the evening
- restaurant meals for lunch
- take out coffee multiple times per day
- travelling costs to and from work
- nanny or full time daycare
- dog walker
- cleaning lady
- excessive toy and electronics purchases to offset your guilt over never seeing your kids
- I could go on but you get the idea!
If you have a high paying job (or even if you don’t), try adding up how much you spend each month on these and other items. That’s a good window into how much you’ll save when you work for yourself!
By the way, did you know that only 6% of the US population makes over $100,000 a year?