I started my freelance business last year with over 300k of debt. With that crushing obligation and the staggering rate of small business failure, I don’t blame people for calling me crazy.
To top it all off, I didn’t even have a clear plan when I turned in my resignation at my full time job with solid benefits. It’s true — I didn’t know how I was going to support myself long-term.
But I did have quite a few other things going for me.
I had a cushion
Yes, I had debt — and lots of it. But I also had more than a year’s worth of living expenses (to include debt payments) tucked away in a money market account. That gave me quite awhile to get my act together, without stressing about cash flow.
I had timing on my side
My debt is split between my mortgage and student loans. At the time I left my job, I was an active student and my student loans were deferred. As of this writing, the loans will start coming out of deferment in September 2019.
Having this major obligation put on hold gave my budget a lot more wiggle room and prolonged the time my savings would cover me.
I had other income streams
Before I quit my corporate gig, I lined up some part-time work that I could do from home. For several months, I rated ads on Facebook and helped a local business recruit for their staffing company.
I also provided part-time remote support to my former full-time employer on two occasions. This extra cash further extended the life expectancy of my savings.
I had support — financial and otherwise
I live with my fiancé and his mom. My fiancé is disabled and his mom is retired, but they still bring income to the household though their social security checks. While they’ve always pitched in to cover the bills, their contributions meant a whole lot more with my income slashed by 75-80%.
I had a compelling personal reason
I originally started saving money so that I could retire early. In my early thirties, I thought that I could shed my debt and build a modest, yet adequate nest egg in 10-15 years.
However, in the early stages of carrying out that plan I realized it wasn’t going to work. The whole point of retiring early would be to spend my days how I saw fit and with the people I loved. But by the time I reached my mid to late forties, many family members would have died. And I would have missed out on a lot of experiences because I was preoccupied with hoarding money.
Re-designing my life into something more meaningful, more on my own terms, just wasn’t going to wait.
I had an adventurous attitude
I went in to this adventure thinking: “what’s the worst that could happen?” If I saw my cash reserves running low, I’d go back to corporate life.
Sure, there was a chance that the economy would be bad and rebooting my profession would take some time. But I was prepared to take any job to pay my bills and I was committed to not waiting until the last possible moment to initiate Plan B.
It all worked out (so far!)
After a few months of blogging and making connections, I started picking up freelance writing clients. I’m not sure why this path wasn’t obvious at first, but I’m so glad that it emerged. While the income isn’t as stable as my office job (and I do miss the benefits), I’m earning enough to cover my bills and save a little.
I’m now actively growing my business and I have no plans to return to a cubicle. Despite not knowing precisely how it was going to work out, I knew that it would.
At first glance, my actions appear reckless. But there was actually a lot of preparation involved. I’ll be the first to admit that there was also a lot of luck involved — some happy accidents, some that I manufactured.
What’s my point?
This entire post is meant to highlight one critical thing — don’t let debt hold you back. I know that I’m privileged in many ways so I’m not naïve enough to think that anyone can do what I’ve done.
But — I’d be willing to bet there are folks out there that could that are just too scared to make the leap. I’m writing this for them.
Yes — meet your obligations. Yes — be mindful of who depends on you. But don’t give up on creatively re-configuring your life. When the puzzle pieces finally align, debt or no debt, go for it.
And tell me all about it when you do.