Ask Paul: Can I quit my job to start a business?
I am married with three children (in Years 4, 11 and 12 at school). My wife and I are 47.
I plan to quit my full-time job (paying $90,000) in two years and venture into a new business, meaning I would expect no or very little income.
We have no mortgage or consumer debt. Our investment property is at an interest rate of 2.85% and the repayment is $777 per week. The gross rental is $780 per week. My super is $197,000 and my wife has $212,000.
In two years, we will have one child at a private school costing $10,000 a year.
My wife earns about $80,000 and is worried that, with a single income, we cannot maintain our current lifestyle of private school fees and holidays.
But I am not happy with my current job. Please advise if I can quit my job with peace of mind. - Dew
Yow! You are putting pressure on me here, Dew. The honest truth is that I have no idea what to recommend. So, I'll tell you a little story.
Vicki and I married 39 years ago, back in 1983.
In 1986, we had no kids at that stage and a pretty big mortgage, but I had a chance to invest $20,000 and start a business with some very smart and ethical guys.
We agreed to take no pay for three years and lived off Vicki's salary as a teacher.
We wanted kids, so we agreed a deal between ourselves. If, after three years, the business could not pay me a salary, I would quit and get a salaried job.
As it turned out, the business, ipac, was a great success to the point where Vicki could quit her job and look after the three kids we were lucky enough to have.
My problem, Dew, is I have no idea what your business idea is, or whether your own skill set gives you every chance of success. You and your wife will need to work that out.
But maybe my story is a good one for you. If you both believe your business will succeed, maybe you could give it a shot for an agreed period of time. If it works, great. If not, a salaried job may be needed.
Owning a successful business is terrific, but I would encourage you to do your research and have realistic expectations about the skills and effort needed. We used to laugh about our "40-hour week": 40 hours Monday to Wednesday, then another 40 hours Thursday to Saturday!
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