Well it has been a year since I first declared I would drop out of college and move to Silicon Valley to build an internet company to one million dollars a year in sales. A lot has changed since that time, and it took six months after that blog post to actually start the move. I’ve been here for about 6 months now and I’m excited to say, “Veni Vidi Vici!” I have reached a point that I was able to pay off everything and now focus on building an internet company full time and not have to worry about living expenses.
Upon coming to the bay area I did not have sufficient income to support myself here, I moved with a head full of dreams and with abunch of credit cards! Two months in a row I had to pay my rent using business credit cards. *I avoid placing any un-secured debt in my personal name, so it does not hurt my personal credit score.
My rent is $1,300 a month for a studio apartment in downtown, plus $200/month for my parking space with a $1,500 deposit. So total rent is about $1500 a month, at the end of all the additional random living expenses I was paying about $2,500 a month to live down here with out much of a *positive* net income stream. I’d then spend an additional $10,000 on server equipment I couldn’t really afford at the time, but we needed it so we had to make it happen. Then hosting the servers was also expensive, over $750/month for our full rack down in San Jose, and then additional attorneys at about $475/hour and paying my accountant. All the while I had to also remember if my tenants moved out of my house in Portland, it’d leave my rental home unrented forcing me to dish out an additional $1,500 a month for mortgage when I didn’t have the cash. Luckily they never moved out.
Well after several months of this, I accumulated close to $23,000 in unsecured business debt on my credit cards. Although this may not be a lot of money to some of you reading this, I understand, but appreciate the challenge, not the actual amount. Moving to one of the most expensive cities in the United States without a job and a real steady income stream trying to bootstrap a company isn’t exactly easy. And for those who have done it, I know you all do very well now, and I am happy to join the inner circle with you everyone who has done this before me and made it. Good luck for some who didn’t make it, which there were some switching to full time entrepreneurship who I talked to who didn’t make it work so well and had to go back to their jobs to get income again because their online gig wasn’t supporting it full time yet. However, for all of those who have tried, and are trying, keep going, try again sooner or later you will succeed. You only fail when you stop trying.
So I’m excited to say I have now stabilized all of my living expenses down in one of the expensive cities in the United States, and even a little extra, enough to fly 3 days out of the week! I was able to pay off all of the unsecured business debt and now have money even left over and growing. It is a great feeling to know you’ve made it, or at least made it to the point where you no longer have to work anymore if you didn’t want to, and can do about anything you want to.
The below chart is a Break-Even Analysis chart, it shows the typical cashflow situtation of most businesses. On a personal level I was way in the red down there for awhile, but I’m now in the green zone and life is flying *literally.*
But really the most exciting thing is now that I have enough passive income to live off of so now I can full time build a fortune. Key note to remember, making a living, and making a fortune are two completely different things. The goal is to first make your living, the money you need to live and sustain, and then as soon as possible you want to switch over whenever you can, to start to build your fortune full time.
See when your start out, you might not have the 100% passive income yet to support yourself without working. So you might to work a job to make your living, but on the side, make sure you are working on building your fortune, at least in your spare time. If you are still working on making a living, always always, make sure on the side you are still building your fortune even if its part time. Because building your fortune is what is going to make you successful, and ideally you want to get there as soon as possible *without giving up other important things too, I should add.*
Once you make your living income passively, then you can start to build your fortune full time. What an exciting thing to be able to do. I can now focus on building my fortune full time, with no distractions, and nothing holding me down.
And this is what this post is about, it is about achieving financial freedom to live without working now, so that I now have the time to work full time on building a fortune. It is about getting to a turning point in your life where you can now start to become incredibly valuable to the marketplace. It is time to develop like no other, it is time to work on building my fortune full time.
So where are you on the break-even chart? I hope you’ve at least started in it, if not what are you waiting for? If your in the red good luck, because the next thing after red is green and your already on your way! And if your in the green like some of you are already, lets make it even greener!
So lets make a fortune then shall we? And how long is this going to take?
Making a fortune can take 15-20 years, sometimes less, sometimes more. What is exciting though is when you are truly focused on building a fortune, it will start to grow exponentially after some time. But it takes a long time to get your exponential growth going. At the first it is slow like a snail, and then it picks up pace and keeps building, sooner or later it just keeps going with or without you. Then you know your really in for something good.
If your progress seems slow, just remember, its supposed to be that way. To get to a sprint you first start out slow, and then after some large steps you will start to gain speed and momentum. To many people start the process only to be disappointed with the results after a day or two, or 2 weeks, or even 3 months. Whats with the giving up attitude? Just make it happen, this is for the long run, you need to work your butt off, you really do, and it is going to take some time, alot of time. But I promise you it will take off sooner or later, and it won’t seem like anything is happening for the longest time, and then sometime in the future you will hit it, and you will succeed, and you will be a success. I promise you it if you just keep going! The graph shows the exponential curve, where are you on the curve?
And soon you’ll also be able to say!