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First of all, thank you for your wisdom here. Second, to clarify, I can afford the insurance premiums with operating investment income alone, without touching

First of all, thank you for your wisdom here. Second, to clarify, I can afford the insurance premiums with operating investment income alone, without touching my principal, I'd just rather not spend half my operating income on monthly insurance premiums that exceed my typical annual total healthcare costs. Frankly, it's frustrating that I even need a prescription at all for my medication. It's for a stable, lifelong, uncurable but minor condition. The medicine does not build tolerance or dependence, has zero recreational use, and is not even a component for any kind of recreational drugs. ~90% of my regular annual healthcare costs is my once-a-year doc visit that my doctor requires in order to renew my $3/mo prescription, but that's besides the point. Demographic is under 30 nonsmoker, for whatever that info is worth in evaluating this. I can always delay my departure from my current employer, push come to shove. This will be a resignation, not a layoff / fired type of situation, which I am grateful for. Sounds like that's option 1 for expanding operating income.

troydavis 4y ago
You're welcome. That makes sense. Here's one way to approach this: separate from your current principal and investment income, save some money that you do intentionally spend through in the first 6 months or so. Think of this as a transition fund. It seems like right now you're trying to make the investment income fund everything, but it doesn't need to. Your income from the new consulting company will be lowest when you start, so give yourself 6+ months of cushion that you actually expect to spend. If you go 6-12 months and have spent the transition fund without finding new income/consulting clients, then you can go into the "ramen mode" as needed. In practice, that doesn't seem like an actual situation: if you go 6-12 months without bringing in at least a few thousand dollars a month in client work, then do something else - don't keep going in ramen mode. That something else might be finding a partner who is good at sales. Either you have a viable consulting business after 6-12 months, or you don't and should do something else :) There's not really a case where the investment income needs to fund all your expenses indefinitely.
- anonym29 4y ago
  That's a really good idea. I'm pretty frugal and prefer to not deplete my personal capital at all (as opposed to reinvesting business-derived income back in the business, which I'm fine with), but I'm also fairly confident that I'll be able to land several clients in the first year. If there's any situation that does justify expending capital, that transitionary period in the first few months is it! Again, thank you for your wisdom! It is greatly appreciated.

troydavis 4y ago

You're welcome. That makes sense. Here's one way to approach this: separate from your current principal and investment income, save some money that you do intentionally spend through in the first 6 months or so. Think of this as a transition fund. It seems like right now you're trying to make the investment income fund everything, but it doesn't need to. Your income from the new consulting company will be lowest when you start, so give yourself 6+ months of cushion that you actually expect to spend. If you go 6-12 months and have spent the transition fund without finding new income/consulting clients, then you can go into the "ramen mode" as needed. In practice, that doesn't seem like an actual situation: if you go 6-12 months without bringing in at least a few thousand dollars a month in client work, then do something else - don't keep going in ramen mode. That something else might be finding a partner who is good at sales. Either you have a viable consulting business after 6-12 months, or you don't and should do something else :) There's not really a case where the investment income needs to fund all your expenses indefinitely.

anonym29 4y ago
That's a really good idea. I'm pretty frugal and prefer to not deplete my personal capital at all (as opposed to reinvesting business-derived income back in the business, which I'm fine with), but I'm also fairly confident that I'll be able to land several clients in the first year. If there's any situation that does justify expending capital, that transitionary period in the first few months is it! Again, thank you for your wisdom! It is greatly appreciated.