18 month plan to quit my job. What do you think?

[Aaron Z.]

I am quitting my job in 18 months. To cover a comfortable lifestyle I need an additional 30k in yearly rental income. I have a good amount of money saved up to buy homes with cash and then refi them but very little extra time at the moment, however after I quit my day job in ~18 months I'll have lots of time, but no ability to get financing. Up until now, I've been planning to buy houses at ~70 LTV and rent them out for a pretty good cash flow. Going this route I would only need a small number to meet my goal but it would mean a lot of dead equity. I am also very familiar with route as I've done this multiple times before. An obvious alternative is to use the BRRR method. The benefit being that I get a much better return and very little of my money would be tied up in the properties. The downside is it would require a lot more time to find and buy and renovate these houses and cashflow per property would be smaller so I'd need maybe 3 times as many. I also have little to no experience using this method... Should I save the capitol and go the BRRR route and probably not meet the income needed 18 months from now? Or should I play it safe for now and take the BRRR after I can do this full time? I'd really appreciate hearing how you would handle this situation.

[Lane Kawaoka]

You should stay at your job and keep doing this as a side gig...

People always want to jump into entrepreneurship And it's really not a good idea or even needed.

When we mean entrepreneurship... I mean not dip your toes in but going all in. Like Gary V sleep 4 hours, Grant Cardone x10 stop being a *****, Burn the boats all in. A lot of motivational gurus will tell you to dream big, commit and go all it - buy that fancy car now so you set that bar high and force yourself to achieve it. They don't know your situation and often times these gurus are outliers and often they themselves did not follow the same advice. Don't buy into survivorship bias. For every entrepreneur who goes all-in and even does it as a side gig only the minority succeeds. To focus only on those successes is a logical fallacy. Despite a superior product and optimal skill set so many things can still go wrong.

You are not going to give your business what it NEEDS when you are worried about putting food on the table and paying rent. This frenzied survival causes two things:

First you are less creative in this survival mode. Outsource yourself as much as possible first. Hire the help first or you will be drowning in manuchia. You will not be leveraging you time or your skills. This will require you to create lean and efficient systems which is what building a business is all about at its core. As Robert Kiyosaki differentiates in his book "Cashflow Quadrant" an entrepreneur builds a system that they can be removed and scaled where as an entrepreneur who does not build a system is just a glorified self-employee.

The second when you are in this survival mode you are taking unneeded risks and making mistakes such as forcing the wrong deal or giving up excessive equity for taking on VC capitol.

As a side note a big part of business is negotiation and in negotiation the biggest component is the ability to walk-away. Not having a job and supplemental income source or cash buffer torpedoes your pillar to negotiate. You are effectively the Emperor with no clothes and everyone you deal with and your customers knows it. Just as ask any women... they can smell desperation in a potential suitor.

You should only quit your job once you can scale. And YOU should be the last part of the business that can't scale because you have a job and business needs more of you to scale.

You have to be the bottleneck. Don't dilute yourself in to thinking you are the bottleneck because you just want to quit your job because it is a badge of honor when it comes to running a business or quitting your job.

A lot of entrepreneurs just want to quit their job because they just want to tell all their friends and family they the told the Man to F off, they don't want a boss, and they have escaped the 9-5 rat race. It's cool to be like I'm all-in, I don't have a JOB.

That is an ego thing and we need to be conscious when our ego is leading and not logic.

I spent a decade working my way up through junior level jobs, being a first level supervisor, and managing professional and learned a lot of how a mature business works and inter personal. I wish I would have had this mindset earlier but I realized recently that working for someone else is a privilege to try things out (FSU) on someone else's dine. You don't want to be trying some new marketing scheme or leadership technique the first time when you get your one shot to swing the bat. It is not the time to be "finding your management style" when you step up to the batters box with your own capital at risk.

Here a joke... when at your day job rub off the labels of the letters on the keyboard to use work as a time to master no look typing.

In conclusion ask yourself why am I wanting to leave? Is it because of ego or nessicary? And have I acquired both the skills, proof of concept, and starting capital to create this "runway" for my business to thrive.