Entrepreneurship is a journey with lot of uncertainty. It is like bull riding. You need to get the bull into your control to ride. In the process of taking into your hands the bull will kick you down, grab you, take hold of you. Be brave and get into battle, brave heart’s only can win the battle and take the bull into hand. Imagine the confidence when you control and start riding the bull, it can never match with any other happiness. However, here is a to-do list before quitting your job to turn as entrepreneur.
Keep your lifestyle reasonable:
Generally, majority of people are spending more than 90% of their salary and 10% for savings. To my knowledge, if you get 100 bucks per month I would advise you to spend 60 bucks and save rest of 40. I know how difficult it is. However, if you implement it from the day one of your career, it creates good fund. Apparently, I don’t ask you to suppress your happiness, treat the 60 bucks is your capability, if you want to buy something beyond that capability then you need to earn more. If not, you may have to work until the last breath, Let me tell you my concept
Every person is a frog in their pond and every frog compare with other frogs in that pond. Essentially, it applies from world’s rich person to poor person. If we minimize this comparison I believe you can avoid buying unnecessary things and it saves you a lot.
Sometimes the frog may get into another richer pond (which is little rich society) eventually, habits mindset and lifestyle would change based on the new frogs.
Frog: You or me.
Pond: Society (it changes based on your earning).
Apply the frog story in our life however, don’t forget 60:40 ratio about financials.
Make a financial plan for next 24 months:
To my knowledge a plan with lot of uncertainty, unpredictability and assumptions is financial plan it applies from an individual’s to a country’s budget. Consequently, realize that a plan which helps to replan the plan is a financial plan If you see any typical financial report which contains below columns.
Projected, Allocated, Planned, Actual, Planned vs actual etc…Depends on width of the paper so if we can predict very much accurate why do we need these many columns in the report? Honestly speaking many things are not in our control, we usually work hard to make the plan workable.
As entrepreneurship is with lot uncertainty please plan your financials for next 24months to lead minimum sustainable life with 30% of buffer.
Avoid long term commitments:
What is long term commitment? I would say more than 5 years of financial commitment is long term commitment. EMI (Easy monthly installment) is another big addiction which would leads you to degrow. I would suggest avoid EMIs or finish before turning into an entrepreneur or freelancer.
Taking an EMI is not wrong as long as it don’t rule your life. I would suggest don’t go for long term commitments as it ruin your financial freedom. However, keep your option open for housing loan rather than any other loans. As home is an asset which is worth to dare for a limited period.
If you buy things you don’t need, soon you will have to sell thing you need
by Warren Buffet
Own minimum amenities to survive:
If possible plan to own minimum amenities with no loans. Home, Car, bike, home appliances etc. If you don’t own them you may end up paying rent as these things can’t be avoided to live.
Start avoiding Credit cards:
Pretty common psychology of many people is: Paying with credit card is something which is not from my pocket now, may be some time later. However, we don’t realize that it is not so far, just matter of next pay cheque. Consequently, careful while using credit card when your next pay cheque is uncertain. Credit card is a beautiful weapon as long as you know how to use it wisely otherwise it can be your first financial enemy.
Obtain good health insurance:
Being an employee you may not realize the value of health insurance. It protects you and your family a lot without getting ruin of your wealth. Life is not predictable so I would advise you get a right insurance plan before quitting the job.
Are you a brave heart? come on ride the bull.