In early 2018, I took a leap of faith into the unknown and quit my steady, fulfilling W2 corporate job for the turbulent waters of self-employment. I’d talked to countless entrepreneurs through the podcast and knew many successful entrepreneurs. How hard could it be if I were surrounded by people making a comfortable living?
Turns out the answer is really freaking hard.
It takes a special sort of person to plant their feet on the ground, throw out their elbows and say, this is where I stand and this is how I am going to make money.
Have you heard the saying about the plane and the wind? Henry Ford said, “When everything seems to be going against you, remember that the airplane takes off against the wind, not with it.”
I was the plane. Struggling to find my niche and make money off my endeavors online was the wind against me. It turns out as unhappy as I thought I was sitting in a chair at work for 8 hours a day, I was even more unhappy with sitting in a chair at home for 10 hours a day.
Despite several pivots, I just wasn’t able to succeed in being my own boss.
Now, however, I’m realizing that I had a lot going on in the background to even be able to let me make that leap. I exercised a ton of privilege to be able to try out self-employment and land on my feet at the end. I’m going to cover the finances of my self-employment stint, how it impacted my long-term plan, how it impacted my short-term plan and some of the lessons I’ve learned.
Fighting for Pennies
I was completely unprepared to handle the mental shift from high-income tech worker to struggling entrepreneur. I never realized how ingrained that was in my sense of self. It was very humbling to realize my time wasn’t worth more than about $10–25/hr, depending on what I was doing. I was making $50/hr at my corporate job, and that came with benefits!! I was fighting for pennies and having to pay for health insurance.
From March to October 2018, what I consider the main time chunk of my self-employment phase, I made $2,030.85.
Now that I’m working again, I made that much money in my first paycheck. 2 weeks worth of pay at a W2 job pays the same to me as 8 months of self-employment. I would also like to point out the level of actual work done was about the same as I didn’t have accounts for the first 2 weeks and there was nothing to do at work.
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With what I was doing freelancing, I saw no reason to stay a freelancer and fight for poverty level wages. Because of the lifestyle choices I’d made in the past (getting a cat, having possessions that mean a lot to me, dating my ex-boyfriend), I was unable to life the life I thought I would have as a freelancer. I did travel, but not as much as I wanted.… especially at the end as money reserves ran low.
Most of those spikes are moving money from my savings or getting money from the house sale/family. It looks like I made money, but I did not.
I wasn’t happy and wasn’t leading the life I wanted. So, I went back to W2 work.
Long term Impact
Long term, this 8 month period will be a little blip on the radar. It’s unfortunate the end of my freelancing time came at the same time the market went down, as that exacerbated the impact on my finances.
I’ve included a screenshot of my net worth timeline from Mint below. Ignoring the spikes from buying and selling my house, you can see I was on a clear upward trajectory but it leveled off and even went down a bit towards the end of 2018.
You can see that I am just about at the same level I was in November 2017. I consider only losing a year of progress negligible in the long run.
Honestly, the biggest hit to my finances the last 2 years was the rental property. I spent a lot of money on it and didn’t recoup all of the money I put into it.
Because I recognized that life wasn’t working out, I got out before I was ruined. I have a few thousand in debt on my credit card (or had, it’s mostly paid off now). I had to live in my parent’s basement for a month before I was able to start my new job. I intended to start a job before then, but I had to pass my Security+ test first.
The effect on my finances would’ve significantly magnified if I didn’t have several factors going for me. I have several layers of privilege and used most of them in 2018.
I was privileged to have a friend be able to fly in and help me drive my stuff back to my hometown from Minneapolis.
I was privileged to have a friend with an empty room to be able to store my stuff indefinitely. (There’s a non-zero chance it’ll be haunted when I go back for it, but I can handle that).
I was privileged to be able to stay with my parents for as long as I needed. My mom’s rule is she carried me for 9 months of pregnancy, so I can stay up to 9 months as an adult with them. I am privileged they had an empty room in their house, that that room wasn’t needed for other family members’ housing. I am privileged they are able to afford a house big enough for me to stay in without being all up in their business. I am privileged they could afford to put extra food on the table to feed me (although I did contribute to the house with groceries and chores).
Not only that, I am incredibly privileged that my parents could help me out financially. My siblings have borrowed money from my parents in the past, although I never needed to. Without that check (for $2k) I would’ve had to cash out more investments or put more expenses on the credit card to pay later.
That brings more levels of privilege to light. I had a high paying job in the past, so I have several credit cards with high limits. If you have been financially strapped for a while, you won’t have the same access. I was also privileged to be able to save up enough money to have significant reserves. It would’ve been better if those reserves had been cash, but I made it work.
All of these layers of privilege allowed me to escape my freelancing stint with nothing more than a glancing blow to my finances.
I have friends that would not be able to absorb the short-term hit to their finances with moving expenses, deposits for a new place, and waiting until their new paycheck starts.
I would also like to point out I am very comfortable moving to a new location and leaving behind any sort of support network I’ve formed. If you have family that depends on you, it will be much harder to move to a completely new area and start over from scratch. I am used to being far away from friends and family. With the advent of the internet, I can stay in touch with friends long after we stop living across town from each other.
Being part of this FIRE community has also been helpful as I basically have a built-in network of friends wherever I go. It’s much easier to move to a new place when you know people there who will help you find the best place to live and figure out the best places to go.
I’ve learned several things from my self-employment adventure and subsequent search for employment.
I learned I am who I am, no matter what I’m doing. Who I am doesn’t depend on what I’m doing or where I’m living. I make the best of any situation I find myself in. Rolling with the punches is key to my happiness levels. I only stress about things I can change. Anything else (mostly) rolls right off my back.
I learned I have a set amount of money I feel comfortable spending each month. Surprisingly, that amount is higher than I thought, which mostly renders my previous plans for early retirement useless. I love the hustle and bustle of big cities and am willing to pay more for that lifestyle experience. Thus, I need to go back to the drawing board and figure out what I want from my life!
I learned not having money coming in and not enough stockpiled up for early retirement makes me really stressed out. I learned I’m actually quite content to go to work every day as long as I feel fulfilled and make a difference with my efforts. It turns out I don’t hate working — but I do hate going to an office and sitting around doing nothing. I’ve begun a quest to find a job where I don’t mind going to work every day. Stay tuned.… there could be some movement on that front in the near future!
So, long story not short, I am blessed to have been able to take the chance on freelancing and figure out that’s not the lifestyle for me. If that’s not the lifestyle for you, that’s perfectly ok. You do what makes you happy!
Thanks for reading! Do you like getting a steady paycheck or do you like the adrenaline rush of self-employment? Sound off in the comments below!
I love your perspective coming through this experience. It could have been filled with regret, anger, or sadness, but you recognize that it was a terrific opportunity to do a test run of your plans, and it didn’t cost you much besides time. With the market blips in February and December, most of the rest of us are pretty much even with November 2017, too.
I’m excited to read about future job prospects and you finding a position that is fulfilling! Good luck!
Josh recently posted…Ingredients vs. Recipe
Gwen, I’m so proud of you for being open and honest about your experiences. Very few bloggers share their realities. You have learned so much about yourself in the past year, you are well prepared for your future.
Tonya@Budget and the Beach says
Thank you for your honesty! I’ve been in both situations and they do have their pros and cons, but money with freelancing was never one of those things for me. For every, “you can make over 6 figures too and easily” blog post and podcast title out there, there are 500 more struggling freelancers who are just trying to pay their rent. Of course they are not the ones writing blog posts or being featured in podcasts, so there is not well-balanced info out there. On a side note, is there a chance your current employer can see some of the stuff you are posting about not really liking it there? Considering who you work for, just be careful! 🙂
Tonya@Budget and the Beach recently posted…Money Anxiety!!!!
Thank for sharing your experience. I too like the certainty of a paycheck every two weeks.
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SC | MissFunctional Money says
Thanks for the honesty here, Gwen! Too often, self-employment is overly glamorized. It’s cool that you’re able to reflect on choices and learn from them — easier said than done!
For now, I like and depend on my steady paycheck. If I ever take the plunge and work for myself, I’d have to have a certain amount of cash that I’d be comfortable to just leave chilling/readily available to tap into for the first year. That’s how I’m wired, but it’s also a huuuugggeee barrier to me just freaking going for it.
PS — Have you ever listened to Dawes? They have a song called “Roll with the Punches” that I started humming when I read the “lessons learned” section 🙂
SC | MissFunctional Money recently posted…7 Alternatives to Punching Your Stupid Coworker in the Face
Young FIRE Knight says
I think that it’s a great point to say how priveleged it is just to be able to pick up your stuff and move to a different location.
A lot of people (myself included, sadly) say “well if you don’t like things, or things aren’t working out for you that you should just move”. Well, there’s so much more to consider with that, including family ties, children, jobs and of course the upfront money involved with that. It’s a lot more complex and very privileged to say “just move”. Thanks for pointing that out.
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Financial Mechanic says
It takes a lot of humility to recognize and declare your own privilege. I think it’s great that you acknowledge it here for those who wonder about tackling solopreneurship but might not have the same privileges. It tells more of the whole story. Also I know it took a lot to look at those numbers, so thank you for sharing that!
Financial Mechanic recently posted…Two Terrific Guest Posts For You // The Luxe Strategist // Fiery Millennials
New Fire Acolyte says
Gwen, thanks for sharing. I understand what you are saying about not minding having a day job if it comes with work you feel fulfilled doing. I feel that way too, but it’s hard to find a fulfilling job. I have a really good job, but I find myself completely bored by it about 8 out of 12 months a year. Those 8 months are really hard. I also know the freelance and hustle life isn’t for everyone. I am catching up on your Fire Drill Podcast (I only started listening about a month ago), and I just listened to your 2018 Independence Day show. J was talking about all the money she makes through her indefatigable side hustling. I’m so impressed with her work ethic, but like you you indicated on that show, I don’t think I would have the energy to work 16 hours a day, even if it was for my own projects. I just don’t know what the right path is for me. There’s definitely comfort in the W‑2 job, but I am also bored, and the entrepreneur life is scary to me. How’s that for honesty? My solution right now is to wait to set off on my own until I have true long-term FI, so that way my entrepreneurship is entirely optional, but that’s also a long way away.
Gwen [Fiery Millennials] says
Depending on your situation, give it a shot! It might help if you overlap the entrepreurship activities with your W2 work, to see if it’s even possible to do. I overlapped, but I wasn’t making money when I did and assumed it would bring in money once I was able to focus 100% on my own stuff. To me, the answer seems to be changing jobs until I find one I really like.
New Fire Acolyte says
That’s good advice! One of my goals for this year is to try to find a side hustle that I enjoy and that brings in some additional income. We’ll see. Good luck with the new gig — I hope you are liking it so far!
Mrs. Picky Pincher says
Thank you for your honesty! I think we all hear stories of “OMG self employment is the only way to be FIRE!” or of wildly successful entrepreneurs. The reality is that many of us self-employed freelance folks work our asses off, typically for little pay.
I’ve been self-employed since October and, not to brag, but it’s been the best decision I ever made. It didn’t feel like a heart-pumping, risky decision, though. We paid off all of our debt before I took the leap. I can rely on my partner’s insurance, so that was also taken care of. Anything I earn goes into savings as we build net worth.
I think I was only able to succeed because I built my biz on the side while I had a full-time job. As in, like, putting in four hours a day freelancing. It wasn’t easy, and I DID cry a lot. 😉
Anyhoo, I’m really glad to hear your journey has come full circle, and you’re getting back to a good place. I like to remember the privilege in my own life (loving family, health, no debt). It helps to remember that I didn’t do this alone; I’m backed up by a great support system if I fall.
Mr. Groovy says
Me like W‑2 over freelance. W‑2 life is a cakewalk compared to running your own business.
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I’d have to say that I am all for self-employment these days. While I liked my W2 days, I think I would have a hard adjusting back to having rules. Guess I’ve been brainwashed by entrepreneurship ;o) But I definitely know that it is not for everybody. Glad you had the opportunity to give it a try.
Mrs.Wow recently posted…Conquering the Clutter: 31 Day Minimalism Challenge with 1500 Days
Evelyn Dar says
Wow, I love your perspective. As a new solopreneur (been at it for a year), I love reading real and honest depictions of what self-employment is really like. I agree that there’s far too much sugar coating that goes on in the arena.
Honestly, it flipping sucks a lot of the time. And it may or may not be right for everyone. That’s just the reality. Your post should be required reading before anyone even thinks about jumping.
Evelyn Dar recently posted…How to Make $4,000 Self-Publishing a Novel on Amazon
Financial Panther says
Hey Gwen, I really admire you for taking the leap and giving the solopreneur thing shot — it’s something I’m going to be pulling the trigger on soon as well.
Perhaps the biggest privilege you and a lot of us have is just how young we all are. You took one year to do this, now you’re still only 28 years old. You’ve got decades left to figure out who you are, what makes you happy, and what works for you. Don’t underestimate just how young we are in the grand scheme of things.
Gwen [Fiery Millennials] says
That is an excellent point! Thanks for pointing that out.
Angela @ Tread Lightly Retire Early says
I actually love the steady paycheck/ steady job thing and have absolutely zero interest in doing the entrepreneurship thing. Love the honestly in this post and knowing yourself well enough to know when it was time to pivot.
Good lessons worth sharing. It really is all about happiness and fulfillment. Good luck with the new job!!
Savvy History says
This is one of my favorite posts by you. After hearing about your story here and there on the podcast, I really like this breakdown along with the numbers and charts! Thank you so much for sharing and being vulnerable.
P.S. I find it interesting how getting a cat was lumped in with having an ex-boyfriend as financial glitches. Nice.
Gwen [Fiery Millennials] says
I want to clarify I don’t see the cat or the ex as a financial glitch. Rather, I pointed out that I’d made certain lifestyle choices in the past that were not conducive with excess travel like I had originally thought I would do while freelancing.
I’m glad you liked the post though! Thanks for reading and commenting 🙂
Savvy History says
Understood. No worries. I admire your story and the way you tell it.
Thanks for sharing this! I’m with you on my love of a steady paycheck. We are in a better place than many in that regard. It’s also really exciting to see you take a risk like you did. It’s the tough times that show our true character and you seemed to roll with it really well. I’m excited for this new stage in your career and to see how your time of self-employment will influence or impact your w2 now!
Zar Santos says
Thank you for sharing your story! Freelancing and self-employment looks is one fantastic job, with all these work-from-home jobs available now. But as always, not everything is gonna work out for everyone. Not everyone is for the freelance lifestyle. Again, thank you so much for sharing what you’ve gone through. You do you and you do what makes you happy! Cheers! 🙂
Zar Santos recently posted…How to Practice Self-Love Every Day
I just discovered your blog and this post was so helpful to me. Just wanted to say a quick thank you!
Gwen [Fiery Millennials] says
You’re so welcome! Let me know if you have any questions 🙂
Thank you for sharing your experience. The freelance lifestyle is growing now and most people thinks its easy since you are just staying at home but when you come from a steady 9–5 job then suddenly transitioning to a self-employed person and noticing that your paycheck is not as steady as before, it will be tough. But doing what you love is still the best option and as for my experience I never regretted it!
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Barista Fire says
Thank you for sharing your perspective – truly appreciate your honest sharing though I think it’s wonderful that you tried it out and move on quickly. Some folks hang on for too long, doing real damage to their finances and mental health before moving on. I think this is a great life experiment, a life experiment that did not turn out like you expected but nevertheless showed you your truer path.
Freelancing is “hip” right now, but I have many friends in the arena, and while they really love what they are doing, they have to work super hard for it. Harder than 9‑to-5ers, and some have even gone into debt because of dry months. Still, they enjoy the life because they have the personality/risk tolerance for it.
I tried out solopreneurship very briefly when I was between jobs, and also as a side hustle and didn’t enjoy the immense amount of hustling needed to get things going. I like the structure and predictability of a 9 to 5, and I think there’s nothing wrong with it.
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I love your honesty. It’s true that there are things that just not work for others. Doing what you love is the best option. It is okay to try some steps that you are not familiar with and sure about, but being motivated and being ready for the risks would help. If it works,okay. .but if not, keep motivated and learn the lessons.