2012

One of the great things about blogging is being able to look into your past and see what you were thinking/doing at any given time. For example, exactly three years ago today I sat down and wrote a post titled a new journey starts today.

I still remember writing that post because it was one of the most important days of my life. For the first time in my adult life, I woke up not having to go to work. I felt like my life had unlimited possibilities because there was no longer anything holding me back from giving self-employment a full-time effort.

Now that three full years have gone by, I thought it would be fun to take a look at what has all happened on that journey and talk about some of the things I have discovered along the way.

I’m Still Here!

The good news is I’m still alive and doing well. I’m living proof that you can in fact quit your job and make a living working for yourself. Hopefully you can use my story as a bit of inspiration if you find yourself in a similar situation where you completely hate your job and are planning on creating a new career path for yourself.

However, I do recommend reading the next few points first before making any decisions 

It’s Not An Easy Road

One of the main things I mentioned in my blog post three years ago was the need to be challenged. Well, after quitting my job I quickly realized that working for yourself is definitely a challenge. It’s really, really, really hard. I’ve hit plenty of bumps along the way, some large enough to make me second guess my decision (luckily I’ve stuck with it).

Here’s some of the important things I’ve learned about working for yourself:

You Must Be Hard On Yourself

When you start working for yourself, you quickly realize that you no longer have a boss. The problem is you find yourself wondering who is going to tell you what to do. It took me a lot of adjusting to get used to the idea that I had to force myself to get things done.

If you tend to be easy on yourself, you might find yourself playing video games or watching TV everyday instead of getting your work done. In order to be successful at self-employment, you have to be willing to be hard on yourself since no one else is going to make you feel accountable.

No More Paychecks

Once I quit my job, I quickly realized that no more steady paychecks were coming in. I had to get used to the idea of getting paid sporadically instead of biweekly. This forced me to learn a lot about personal finance because you have to be on top of things in order to stay afloat. This is especially true when you have dry spells, which are guaranteed to happen.

The good news is learning about personal finance has changed my life for the better. I now have a much better understanding of where my money comes from and where it goes; two important things to know.

Working From Home Has Its Cons

When I tell people I work from home full-time, they usually respond by telling me how jealous they are. They have a beautiful vision in mind of working in their pajamas, not having to leave home, and not having to deal with co-workers anymore. All three of those things are in fact true about working from home. The problem is that I now look at them as negatives instead of positives (for the most part).

– I do in fact work in my pajamas most of the time. The problem is I often end up wearing the same pajamas for days with no motivation to change. Yes, it’s gross but it’s what happens when you no longer have to look presentable. I sometimes find myself looking like Robinson Crusoe after being stranded on a remote island for a few years.

– Secondly, not having to leave home on a daily basis isn’t all that it’s cracked up to be. I often miss the idea of leaving the house to go work for a few hours. It’s easy for me to not leave the house for days because I don’t have to.

– Last but not least, I’ve found myself missing co-workers. I do a lot of solo work where I handle everything and I miss the idea of working with others. Co-workers are also a great way to make friends because you are forced to hang out with them often.

With all that said, I still wouldn’t give up the freedom that working from home does offer. I do love the ability to work from anywhere and wouldn’t give it up for anything.

Plans For The Future

So what’s next you ask? Well, I still love what I do and hope to continue to work on things I truly enjoy far into the future. Everyday I get emails from people who want to say thanks for the inspiration. These emails give me the motivation to keep dong what I do.

Things over at ZoopMedia have been going great and I hope to continue writing here on the blog. I have also taken on an interesting opportunity recently that may lead to something but only time will tell.

I’m writing this article in response to Justin’s blog just to show that what he is talking about can and does work in practice.  My name is Carl and I’m 56, born and raised in the UK although I have lived in Spain and Holland before.  I had been living in the north of England and working for the Council in  a dead-end office job along with 200 co-workers and hating every minute of it.  Working for the Council only to pay back half my wages in Council Tax and rent for a Council flat.  I lost both of my best friends to early heart attacks, I lost my mother, my dog died, I lost my father.  I began to suffer from depression and ended up on medication.

I decided a couple of years ago that when I received the cheque from the sale of my parents’ house I would move back to Spain.  I realised there was no way I could afford a big place or anywhere at all fancy and I didn’t want a flat in a town.  I knew I wouldn’t be able to find a job with a Spanish company as there was widespread unemployment and the start of “The Crisis” was upon us.  I had a few ideas for selling my own database software (opendatasoftware.net) and that was about it.

I decided eventually to look for a cave in the South of Spain and eventually settled on one in a small town of 20,000 inhabitants in the middle of nowhere.  It’s a cave in that all of the rooms are built into a mountain side.  Not a cave house where some of the rooms are extended outwards.  This was an important choice of dwelling as a cave hardly needs any cooling in summer and very little heating in winter due to heat being conserved by the sheer thermal mass of a 3-metre thick roof, solid stone floor and metre thick walls throughout.  The caves were previously used to house livestock but are perfectly habitable and come in all sorts of shapes and sizes.  And prices – this was a very cheap one at 25,000 Euros.

The cave is halfway up a mountain and is subject to extreme heat and full sun exposure in summer and torrential rain and gales in winter.  The only heating is a small wood stove and there is only one window and one entrance door.  There is a small entrance room with a small kitchen and small bathroom off to one side.  Behind that is the living room with the wood stove.  Behind that is the bedroom and behind that is a storage room.  The garden is on top of the cave and the chimney protrudes up into the garden.  When I moved in the garden was completely overrun with fearsome weeds.

I decided that the only way I could survive was to live on approximately a quarter of what I was used to getting for a living wage – a drastic cut and one that would involve a complete change of lifestyle.  I don’t smoke or drink any more so that helped.  I’m a vegetarian and thought I would be able to grow most of my own food.

I don’t go out much at all except for walks and bike rides which don’t cost anything.  The nature walk I use for a daily bike ride is just stunningly beautiful and I never tire of it.  I realised that the lifestyle I was planning on living would be quite hard work physically and so decided to get fit as soon as possible.  I started off just walking every day and now I jog 5 kilometres every day, bike 20 kilometres, train with weights and do Tai Chi, sit-ups and press-ups.  I feel so much better for it and I think I will have a six-pack by the time I hit 60!  Quite astonishing for someone who spent 8 hours a day sat in a chair in an office and never exercised apart from walking to work.  The thing is, it is vitally important to be fit for this kind of lifestyle.  I live on my own and if I cannot look after myself then I will have a serious problem.  Apart from which, this lifestyle requires commitment and stamina.  It is in no way an easy option or a cop-out.

I decided early on to dispose of most of the clutter that I had in my life and in the words of Thoreau “Simplify, simplify”.  I have no TV.  I sometimes watch Spanish television on my Eee laptop.  I have no fridge and haven’t had for a year although I will be building a small Peltier cooler as I like yoghurt and it goes off too quickly in summer.  I have a mountain bike – no car – I’ve never owned a car and I’m very proud to be able to say that.  I have a wide assortment of clothes as I have to do manual work in all temperatures so anything from padded lumberjack shirts and work boots to sleeveless T-shirts and jeans to shorts and sandals, really.  Lots of books, CDs and DVDs as I’m an avid reader.

I have no expensive hobbies.  Most of them are free or cost very little – walking, running, cycling, playing guitar, gardening and reading.  Watching the occasional DVD or documentary.

I try to do everything for myself as much as possible.  I wash clothes by hand unless they are very dirty or very large items in which case I use the Eco setting on the washing machine about once a month.  I use home made cleaning materials mainly made of either dilute vinegar or sodium bicarbonate solution.  I always cook for myself using home-grown or locally bought vegetables.  I use a home-made solar oven in summer and a home-made updated version of the old-time hay box or the wood stove in winter.  I have an electric cooker but I don’t use it.

I boil water in a Kelly Kettle (check their website) and keep it in Thermos flasks and in the summer I use camp showers to heat water.  I’ve learned how to sew, how to tie knots (a forgotten art), basic woodwork, electrical work and DIY.  I make bricks out of old cardboard and paper to supplement my wood supply.  All of this keeps my bills down to next-to-nothing.

I grow a small quantity of vegetables and herbs in the garden above the cave and on the metre-thick windowsill but I’m planning on setting up some square-foot gardens and potato-barrels this coming Spring.  It’s early days yet.  I use a (self-installed) 120-watt solar panel for some of my power and I’m going to build a couple of small home-made VAWTs as there is a huge amount of wind power available in winter.  Half of the mains power in this area is from windmills.  I only use mains power for power tools and the washing machine.  Most of my equipment is 12-volt or was deliberately chosen for low consumption (like the Eee laptop).  I use a Vodafone dongle for the Internet which costs about 4 Euros a week and the same kind of package for a mobile phone although I’m planning on switching the phone to Skype soon.

I have started a local magazine with its own website, I’m making and selling solar ovens and I’m planning on going in for producing Biodiesel for sale once I can find a cheap source of used vegetable oil.  I don’t have time for anything else as this is a full-time 24/7 365-days-a-year commitment.

What I would like to say is this.  I’m not by any means an expert on anything and I don’t claim to have all or even most of the answers.  I have found out how to do these things by researching on the Internet – something anyone can do.  And by trial and error in many cases.  When I came out here a year ago I struggled to wire a plug.  Now I’m installing solar panels!

Most of my ideas came from adapting old 1970s Mother Earth News articles to this century and checking out YouTube.   I won’t lie – the learning curve is pretty steep and many times I have had to start projects again from scratch.  Anyone who thinks that this is early retirement and an easy option is way off the mark.  Anyone who enjoys a challenge and really believes in Learning For Life will love every minute of it.  It’s an awesome, inspiring rebirth and a path to self-discovery and I would heartily recommend it to anyone.  And as for depression – sorry, I haven’t got the time …

There are many benefits to being a freelancer.  You have no boss to answer to, you can work from the comfort of your own home, and your income is only limited by the amount of time and effort you want to put into making money.  However, being a freelancer also comes with a certain amount of serious responsibility – responsibility that you wouldn’t have if you did have a boss, and worked for a company, and had a regular paycheck.  This is especially true when it comes to financial matters.  Protect yourself and your financial well-being by following these five critical personal finance tips for freelancers:

Budget.  Develop a monthly budget and stick to it, so as to avoid being sideswiped by unexpected income fluctuations.  Because your income is irregular, you will need to determine an approximate monthly income to use for your budget.  Total up your previous year’s income and divide that amount by twelve, then use that figure as a measure of what you can and cannot afford.

Safety net.  As a freelancer, it is likely that your income will almost always be at least slightly unpredictable (and sometimes extremely unpredictable).  It’s important that you prepare yourself for the tight months by saving during the bountiful months.  A good rule of thumb is to keep three to six month’s worth of expenses in an interest-bearing savings account, for “just in case.”

Save for tax season.  Don’t allow yourself to be caught off-guard by a tax bill at the end of the year.  Set aside a bit of each paycheck you get to avoid tax season shock, and to soften the blow of what could be a hefty IRS debt.

Debt.  Avoid it.  Period.  Keep your monthly expenses down to the bare essentials: rent/mortgage, utilities, car, groceries, etc.  This may be the biggest favor you will do yourself as a freelancer.  Staying out of debt means freeing up your cash flow, which will come in handy when you have a slow month (or more).  This is especially important considering that interest rates for things like credit cards can be very high, and that missing a payment (if the worst happens) can send you into a vicious cycle that will end up costing you way more than you originally borrowed.

Retirement.  Don’t forget to develop a plan for retirement, unless you plan on working forever.  The time to start planning for retirement is now.

Just like any self-employment venture, freelancing can be a risk.  But there are things you can do to hedge that risk.  Follow these personal finance tips and set your mind at ease.

About the Author: Dona Collins is a full-time writer and IT specialist who knows how important it is to have a financial safety net. When she is not working she can often be found helping other IT professionals find work through groups like Modis IT recruitment services and other local agencies.