I have saved approximately $190,000 over the past 15 years by becoming a solopreneur.
I know that number seems insane. It can’t be real, right?!?
Let me share the math with you (more details in the podcast audio). Before I left my last corporate job in 2010, I was spending:
🕰️ 750 hours/year commuting to a corporate campus.
🚗 13,000 miles/year on California freeways.
⛽️ $3,000/year on fuel.
💰 About $10,000/year for other expenses like meals, coffee, new clothing, dry cleaning, vehicle maintenance and repair, various services (e.g., home repairs), etc.
That Was Then, This Is Now
I work out of my home office. No commute!
I don’t drive on the freeways anymore.
My fuel costs are absurdly low. I only drive a few miles/month to check my mail in town occasionally.
I eat at home. No more expensive meals while I’m at work (e.g., going out for lunch).
I make excellent coffee at home. I used to spend thousands of dollars a year at Starbucks (BTW, how much do you spend?).
I no longer purchase lots of new clothing for work or do any dry cleaning. Hello, hoodie and comfortable pants!
My vehicle repairs dropped to almost nothing. I got rid of my expensive-to-maintain BMW and started driving a 1987 Toyota pickup, which I love. Plus, I barely drive, so wear and tear are minimal now.
All those other incidental expenses from a corporate job and commute vanished.
Another bonus? I work out every day, eat healthier, and have time to take care of myself. So, I lost 40 lbs and got into the best shape of my life.
Remote work works. I love solopreneurship, and I could never return to a corporate office.
However, that’s not why I wrote this newsletter and recorded this podcast. When people consider quitting their jobs to start a business, they focus on the revenue side of things. Can they replace their employment income?
What most people don't consider is that they will also be reducing their expenses at the same time. Yes, you will spend money to run your business (note: this can be less than you think). But those are business expenses, not personal expenses. As such, they are tax deductible and reduce your taxable income.
The money I spent as an employee could not be treated as a tax deduction. In fact, very few workers are allowed to deduct unreimbursed employee expenses now, thanks to the Tax Cuts and Jobs Act of 2017.
So, when you run the numbers on that business you’re thinking about building; you may not need to make as much as you think to replace your current income as an employee. Do the math and calculate how much that 9-5 job costs you mentally, emotionally, and financially.
I’m Larry Cornett, a Freedom Coach who works with you to optimize your career, business, and life. My mission is to help you become a more "Invincible You" so you can live your life on your terms instead of being controlled by someone else's rules. My wife and I live in Northern California near Lake Tahoe.
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