At what point do you quit your job? How much earn a month to go full-time?

by dwall
11 replies
Hi everyone,

I know this is a question that I could receive alot of answers and it's very open ended- but I'm still curious.

I am wondering how much money you would have to make online a month to quit your job? How much money a month in profit would you need to survive solely from internet/online ventures?

Thanks
#earn #fulltime #job #month #point #quit
  • Profile picture of the author LuckyIMer
    It depends where you live and on your bills, way of spending money. If the online income is better than the offline, then it might be worth it to quit in some cases. But it is risky because the net income is not as stable as a offline job. Unless if you have a stable online business with goof profits.
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    • Profile picture of the author dana67
      I think that you need to be consistently earning more than your salary for several months before quitting any job. Also consider the stability of your business.

      For example, if 95% of your traffic comes from Google, what happens the next time a new algorithm is released? That may be an extreme example, but considering the stability and longevity of your online venture is essential.
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  • Profile picture of the author blitzbc
    You should only consider quitting your full time once you have a stable income online. I think if you are consistently making double your current full time income. You also have to consider that you will have business expenses and taxes to pay. If you are using a mailing list as your main source of income online, wait until you have a stable stream of subscribers coming in everyday because you will also have a steady number of unsubscribers as well. So when to quit is completely up to you and only you can make that decision.
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  • Profile picture of the author Dan Grossman
    In addition to having sufficient income to pay your bills each month, there are a few other things to consider:

    (1) You don't have a salary. Your income can change month-to-month. It may be enough to pay the bills this month, but your business might not do as well next month for a variety of reasons. You should have your own emergency fund with enough to pay at least 3-6 months of bills in case you need it. Make sure to build up that fund before you quit the job.

    (2) You don't have an employer protecting you from liability. If you go into business on your own and damage someone else's property, or business, or fail to follow through on a contract, or any number of other things, you might be on the hook for unexpected legal or other expenses. At some point you'll need to budget for one or more types of business insurance.

    (3) In most states, there is no unemployment insurance for the self-employed should your business fail. Unlike losing your job, there is no safety net.

    (4) You will have to pay 100% of your own health insurance, and any other benefits your employer may have been providing. No more 401K matching or stock grants. Be sure to factor those costs in.

    (5) You will be paying higher taxes for the same amounts of income. Your employer has been paying half of your FICA taxes (social security and medicare). You'll now be on the hook for all of it, in the form of the Self-Employment Tax, which is an extra 7.65% of your profits -- a total of 15.3% on top of the federal income tax.

    You may also be on the hook for business taxes at the state, county and local municipality levels, even if you don't form a separate business entity. Simply having a home office where I live requires a zoning permit (business use of a residential property), a business license (with annual fee and gross receipts tax), local service tax that would normally be paid by the employer, etc.

    Your chances of being audited will be much higher than the average W2 filer. Keep excellent records; bookkeeping is now an unpaid responsibility of yours.

    Also keep in mind that you won't have an employer taking the taxes out of a paycheck for you. You'll be responsible for estimating and socking away that money on your own. If you spend too much of your income from your new business each month, you can end up not having enough in the bank to pay your taxes when you file. The IRS will want their money. After the first year of working for yourself, you'll probably have to start making quarterly estimated payments instead of just one annual filing as well.
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    • Profile picture of the author John D
      That number depends entirely on the individual. Only you know your financial situation. I good rule of thumb is you want your business income to be double of what your monthly expenses are.

      To get a more solid number. Sit down and decide how much money you need to make to live the lifestyle you want. Then double that number to cover taxes and other essentials. The rest would be yours to spend as you will.
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  • Profile picture of the author miklanderson2
    Don't quit your job until you have enough money coming in to where you can easily pay your bills and you have a nice cushion built up just in case something happens. If one thing's for certain about IM, it's that nothing's for certain and what seems like a great income today can evaporate overnight.
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  • Profile picture of the author pixelbite
    Of course it depends on your living situation, location and needs. Once you know how much you need to live comfortably from IM and a solid strategy, you then want to wait till you are earning your desired income for at least 3 solid months.
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  • Profile picture of the author josephwilson86
    For me its $6000/mo plus advertising budget so maybe $12000/mo. Depends on my roi. I need enough to live on, save some, pay taxes and keep growing the business.
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  • Profile picture of the author WillR
    It depends what you are earning in your full time job.

    I wouldn't recommend quitting until your income matches that of your day job.

    But it all depends on your situation and your obligations. eg: a single student has less financial obligations than a married middle aged man with two kids.
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    • Profile picture of the author jimvol
      There is no definite answer to this question. I do have a basic suggestion...work your job to finance your fledgling business. This makes good business sense.

      Here is a post I made on my site a few weeks ago on this very subject.

      Don't Quit Your Job....At Least Not Yet

      Good luck,

      Jeremiah
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  • Profile picture of the author TheFrenchOne
    If you are the only person you need to feed (no family/kids to feed) , I would say Quit now no matter how little money you are making (even if you are making none).

    You will have more focus and you will have no choice but succeed, so you will push yourself more.
    (it is like the story of the guy who burn his ships to take over the island, when you have no plan B, you are more likely to put all your focus and energy in succeeding in your plan A)

    That applies only if you are a young single, free as a bird. If you need to provide for some family members, that is another story and I can't encourage you to take this type of risk obviously.
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