Changing careers (changing gears) - Can I?

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renue74
Posts: 1199
Joined: Tue Apr 07, 2015 7:24 pm

Changing careers (changing gears) - Can I?

Post by renue74 » Mon Sep 24, 2018 8:58 am

I've been a small business owner since for 19 years. In 2017, I started not loving what I do any longer. Just like others here, I make enough to be fine and not "look for the next career move." I own a small web design firm and I'm finding it more and more difficult to attract and retain employees because of a larger city near us has more lucrative jobs. Plus, I'm tired of clients and want to do something else.

Thoughts on career changing? I'm having issues making the change because I've been doing the same thing for 19 years and as a "business owner," I'm a generalist....meaning, I'm the sales guy, HR guy, accounting guy, design guy, and guy who knows a little coding...but typically tells an employee the project scope and has them do it.

Wife is a teacher and carries the family on healthcare. Kids are funded enough for state public schools.

For the past 4 years, I've acquired (and sold) some rental properties and did a flip. I thought about doing more contractor work. I feel like I can make as much or more just doing contract work than I do owning my current business.

Below are our financials.

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Emergency funds: $80,000 (current business checking account amount)
Debt: $42,000 (Primary Home)
Tax Filing Status: MFJ
Tax Rate: 25% Federal, 7% SC
State of Residence: SC
Age: 44, Wife 48
Desired Asset allocation: 65% stocks / 35% bonds
Desired International allocation: 20% of stocks
Live in a LCOL city.

Current retirement assets

Taxable
Vanguard 500 Index Fund Admiral Shares VFIAX 425.300 271.68 115,545.50 7.37%
Vanguard Small Cap Value Index Fund Admiral Shares VSIAX 1,561.466 61.03 95,296.27 6.08%
Vanguard Total Stock Market Index Fund Admiral Shares 4.95%
Vanguard Mid-Cap Value Index Fund Admiral Share 7.66%
Vanguard Short-Term Investment-Grade Fund Admiral Shares (Bond) 13.74%
Vanguard Growth Index Fund Admiral Shares 7.13%
Vanguard FTSE All-World ex-US Index Fund Admiral Shares VFWAX 9.57%
Vanguard Emerging Markets Select Stock Fund Investor Shares VMMSX 3.89%

His SIMPLE IRA
Vanguard Total Bond Market Index Fund Investor Shares 13.61%

His Roth IRA at Vanguard
Vanguard Total Stock Market Index Fund Admiral Shares 11.67%

His Rollover IRA at Schwab
Vanguard Total Bond Market Index Fund Investor Shares 0.55%

Her 403b
Vanguard Total Bond Market Index Fund Admiral Shares 2.08%

Her Roth IRA
Vanguard Total Bond Market Index Fund Admiral Shares 4.66%
Vanguard Total Stock Market Index Fund Admiral Shares 5.20%

Her Rollover IRA
Vanguard Total Bond Market Index Fund Admiral Shares 1.82%

Kids 529 Plans
Child 1 (16 years old) - $115,436
Child 2 (13 years old) - $109,434

Portfolio: $1.6M (Not including 529 Plans)

================================================

Property
Primary Residence - $285,000 ($43,000 left on mortgage)
Rental Properties (3) - $338,000 (No mortgages)

Passive Income
Rental Properties (3) - $2,350/month
Seller Financed Home - $600/month
Seller Financed Office Condo - $1600/month
Seller Financed 2nd Mortgage _ $250/month

Total Monthly Passive: $4800

================================================

Net Worth: $2.5M

================================================

Note:
Wife (48) is a teacher with state pension and family healthcare. $50K/year
Me (44) small business owner, salary fluctuates...averages. $50K/year

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unclescrooge
Posts: 2692
Joined: Thu Jun 07, 2012 7:00 pm

Re: Changing careers (changing gears) - Can I?

Post by unclescrooge » Mon Sep 24, 2018 9:59 am

renue74 wrote:
Mon Sep 24, 2018 8:58 am


Portfolio: $1.6M (Not including 529 Plans)
Net Worth: $2.5M


Note:
Wife (48) is a teacher with state pension and family healthcare. $50K/year
Me (44) small business owner, salary fluctuates...averages. $50K/year
:shock:

That's amazing networth on $100k income.

Your passive income generates about what you make. Unless your annual expenses are higher than $100k I don't see why you shouldn't be able to take a risk doing something else.

renue74
Posts: 1199
Joined: Tue Apr 07, 2015 7:24 pm

Re: Changing careers (changing gears) - Can I?

Post by renue74 » Mon Sep 24, 2018 10:47 am

unclescrooge wrote:
Mon Sep 24, 2018 9:59 am
renue74 wrote:
Mon Sep 24, 2018 8:58 am


Portfolio: $1.6M (Not including 529 Plans)
Net Worth: $2.5M


Note:
Wife (48) is a teacher with state pension and family healthcare. $50K/year
Me (44) small business owner, salary fluctuates...averages. $50K/year
:shock:

That's amazing networth on $100k income.

Your passive income generates about what you make. Unless your annual expenses are higher than $100k I don't see why you shouldn't be able to take a risk doing something else.
Thank you. Our annual expenses are around $50K and that's with our $1200 mortgage.

I had a $1M windfall in 2013. I sold a mobile app business that was a side gig. I was very fortunate. Since, then, I've taken some of that and invested in some real estate deals, which have also panned out OK.

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unclescrooge
Posts: 2692
Joined: Thu Jun 07, 2012 7:00 pm

Re: Changing careers (changing gears) - Can I?

Post by unclescrooge » Mon Sep 24, 2018 11:43 am

renue74 wrote:
Mon Sep 24, 2018 10:47 am
unclescrooge wrote:
Mon Sep 24, 2018 9:59 am
renue74 wrote:
Mon Sep 24, 2018 8:58 am


Portfolio: $1.6M (Not including 529 Plans)
Net Worth: $2.5M


Note:
Wife (48) is a teacher with state pension and family healthcare. $50K/year
Me (44) small business owner, salary fluctuates...averages. $50K/year
:shock:

That's amazing networth on $100k income.

Your passive income generates about what you make. Unless your annual expenses are higher than $100k I don't see why you shouldn't be able to take a risk doing something else.
Thank you. Our annual expenses are around $50K and that's with our $1200 mortgage.

I had a $1M windfall in 2013. I sold a mobile app business that was a side gig. I was very fortunate. Since, then, I've taken some of that and invested in some real estate deals, which have also panned out OK.
Sounds like you have already hit retirement numbers.
Congrats!
Go do whatever you like. So long as your health care is covered and you don't withdraw any of your savings until 65, you would do fine earning minimum wage.

TallBoy29er
Posts: 492
Joined: Thu Jul 18, 2013 9:06 pm

Re: Changing careers (changing gears) - Can I?

Post by TallBoy29er » Mon Sep 24, 2018 8:02 pm

My first thought was Congratulations, you've done awesome.

I'm a debt averse guy. I'm also the guy that gets not loving what you're doing. My thought was to keep at it in your current job until you knock out your mortgage. Then go nuts. For me paying off the mortgage took a big weight off my shoulders, not to mention freed up cash flow.

I'm not sure there is a perfect answer to your question. I do know that, from personal experience, slogging it out at something you've lost passion for, for x more years, sounds dreadful.

peace out

JBTX
Posts: 4253
Joined: Wed Jul 26, 2017 12:46 pm

Re: Changing careers (changing gears) - Can I?

Post by JBTX » Mon Sep 24, 2018 8:17 pm

Is there a way you can modify your current gig to make more enjoyable (and maybe less profitable)? How about paying a little bit more, delegating client relationships and other less desirable activities? Work your way out of the business to part time but still maintain some residual cash flow.

renue74
Posts: 1199
Joined: Tue Apr 07, 2015 7:24 pm

Re: Changing careers (changing gears) - Can I?

Post by renue74 » Mon Sep 24, 2018 8:24 pm

JBTX wrote:
Mon Sep 24, 2018 8:17 pm
Is there a way you can modify your current gig to make more enjoyable (and maybe less profitable)? How about paying a little bit more, delegating client relationships and other less desirable activities? Work your way out of the business to part time but still maintain some residual cash flow.
I actually thought about this. There are a number of passive services we offer....web hosting, email marketing tools, and some custom APIs that provide somewhat passive income.

The 3 employees I have now are not aggressive go getters. The are excellent coders and problem solvers, but not relationship builders.

Taking the leap to do anything else after 19 years is a big change....we all like stability.

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market timer
Posts: 5969
Joined: Tue Aug 21, 2007 1:42 am

Re: Changing careers (changing gears) - Can I?

Post by market timer » Mon Sep 24, 2018 8:25 pm

I'd suggest looking into product management roles at tech companies. This is a generalist role that, to use your words, "typically tells an employee the project scope and has them do it."

blinx77
Posts: 261
Joined: Sat Jan 07, 2012 11:23 am

Re: Changing careers (changing gears) - Can I?

Post by blinx77 » Mon Sep 24, 2018 8:27 pm

At $2.5 million net worth and $50k expense, you have won the game. Congrats!

Do whatever you want!

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Watty
Posts: 14592
Joined: Wed Oct 10, 2007 3:55 pm

Re: Changing careers (changing gears) - Can I?

Post by Watty » Mon Sep 24, 2018 8:30 pm

unclescrooge wrote:
Mon Sep 24, 2018 9:59 am
Your passive income generates about what you make. Unless your annual expenses are higher than $100k I don't see why you shouldn't be able to take a risk doing something else.
+1

A big point is that your wife is OK with your decision.

I would also be very cautious about trying out new careers that take a large investment that where you could lose a lot. You really don't need to take a lot of risks.

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Watty
Posts: 14592
Joined: Wed Oct 10, 2007 3:55 pm

Re: Changing careers (changing gears) - Can I?

Post by Watty » Mon Sep 24, 2018 8:35 pm

One more thought. Your Social Security is calculated using your highest 35 years of inflation adjusted earnings. Keeping working with even modest earnings to get a full 35 years will help your Social Security benefit and allow you to move some money into a Roth or IRA each year.

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