You’re sick and tired of your job. Tired of someone else dictating how you spend your time. Tired of putting your passions on the back burner, of quietly surrendering your dreams. Tired of saying to your kids, “We can’t afford that,” or “No, we can’t do that because I have to work.”
You’re anxious to get going. You can taste that freedom. You’d love more than anything to quit your job, like yesterday. I get it. But the first virtue you must cultivate on this path is patience. The 5 Day Weekend lifestyle isn’t for the impulsive and foolhardy who rush headlong into things without thinking them through. It’s a calculated, savvy, step-by-step, strategic approach to crafting a life of freedom. If you cannot currently work on your own dream, then temporarily work on somebody else’s dream and learn from their mistakes.
Before you quit your job, there is a foundation to build. There are milestones to achieve and a mindset to cultivate. These include the following:
Milestones to Achieve Before You Quit Your Job
Wealth Creation Account
The first milestone to achieve is to build your Wealth Creation Account. As I mentioned in an earlier post, this is used to fund Cash Flow Insurance to take advantage of opportunities, as well as to serve as your emergency fund. Ideally, you want liquid funds totaling nine months of salary and 10% of your debt. There may be exceptions, and we’ll trust your wisdom to know if you’re one of them. But it’s important to have a safety net to fall back on.
This account protects your mindset above all else. When you’re stressed and anxious, wondering if you’ll be able to pay bills on time, you’re not able to produce at optimal levels. Your anxiety will get in the way of clear thinking and force you to make stupid decisions.
You want to be in a place where your decisions are not dictated by the tyranny of money, but rather by the goals you have set for yourself. You don’t want to make decisions under duress, but rather when you are calm, peaceful, and con dent. You’re much more likely to make better decisions in that state.
Furthermore, this fund allows for short-term capitalization on opportunities. You may find an opportunity for which you need quick cash and that can be returned quickly. This may be an appropriate use of this fund. This fund can also be useful for getting better interest rates on loans.
Consecutive Months of Salary Earnings
My advice is that, in addition to building your Wealth Creation Account, you don’t quit your job until your combined entrepreneurial income has equaled your job salary for six consecutive months. At that point, you’ve proved that you can replace your income without stressing. (And by hustling in your entrepreneurial ventures, you’ll be able to build your Wealth Creation Account faster.)
The Mindset to Cultivate
Self-Employed (No Leverage) Versus Business Owner (Leverage)
A lot of people call themselves “business owners,” when in fact they are self-employed. They don’t own a business—they own a job. They have no leverage. They have to do all the work. There’s certainly nothing intrinsically wrong with this. The challenge is that it keeps you stuck. You’ll never achieve true financial independence as a self-employed professional with no leverage—and certainly no 5 Day Weekend.
I’m inviting you to think of this from a different perspective—that of true business ownership. Your freedom is a direct function of your leverage. The greater the leverage you have, the more freedom you have, and vice versa. The business needs legs beyond the owner. You build a business around your life, not a life around your business.
You may not have instant leverage right when you start your entrepreneurial ventures. It may take time to develop. But when you start something, always keep in mind that the ultimate goal is leverage and independent income. Here’s the question to ask yourself of any venture: Can this be converted to an independent source of revenue over time? This may mean hiring other people to perform your essential functions. Or it may include leveraging technology systems.
If the answer to that question for anything is “No,” it may not necessarily mean that you don’t do it. Sometimes, it’s the right thing to do something just to increase your income for a while. The increased discretionary income can then be used to fund something of a more leveraged and independent nature.
The point is this: Don’t leap from the frying pan into the fire by quitting your job and building a self-employed position where you simply own a new job. In that case, you may experience a little more freedom, a tad more leverage, but it will never take you to where you ultimately want to go.
Get Paid to Think
The ultimate position for a 5 Day Weekender is getting paid to think. This means you have to become an expert at delegating. Those who get paid to work, work for those who get paid to think. When you do so, many strategies that appear to be active income can actually be converted to independent income.
Much of this chapter is not anything to worry about until later in your journey. However, it’s critical that you start your journey with an understanding of the big picture, a vision of what you’re building up to. Big life transitions, like quitting your job, can be hard and scary. But you can take the fear out of the process by mitigating the risk through the right knowledge and by building the right infrastructure.
In my next post, I look at further ways to grow your money.
In the meantime, I’d love to know where you are in terms of positioning yourself to move ahead – are you close to achieving any of the milestones I just spoke a out? What are they? Thank you for sharing.
Secure your copy of the “5 Day Weekend” book. 5 Day Weekend: Freedom to Make Your Life and Work Rich with Purpose [Nik Halik & Garrett Gunderson]
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