Thread by @dvassallo

If you have some savings, and you'd like to quit your job to work for yourself, here's a few ways you can make your savings work for you: 👇

Say you're willing to risk $200K of savings, and your expenses are $5K/month, and you're starting with $0 income, then all you need to find is $80 of net new income per month.

You'd breakeven after 5 years, and your savings would never dip below 10 months of expenses.

Adding $80 of linear growth per month is certainly not easy. But doable. For example, if you sell a SaaS for $39/mo, you just need to add 2 net new customers per month. (Assuming zero operational costs.) That's it. No hockey sticks necessary.

If instead you can only risk $100K, and your expenses are $5K/mo, then you need to be a bit more aggressive and find at least $160 of new income per month. You would breakeven sooner though, after only 2.5 years, and you'd still have 5 months worth of savings as buffer.

And of course, if your expenses are higher, you need more savings. Here's what risking $300K looks like, with $7.5K/mo expenses and $125/mo linear income growth.

Breakeven at 5 years, with 10 months of savings as buffer.

If you want to risk a lot less, then you need to be more aggressive with the income target.

Say your expenses are $7.5K/mo and you're only ready to risk $90K — 1 year worth of expenses.

Then you need to target $400/mo linear growth to breakeven with w/$23K in the bank in <2yrs.

If you want to try this with your own numbers, you can download the spreadsheet here: github.com/dvassallo/boot…. This tool gave me the final bit of confidence I needed to realize that I had saved enough to take the plunge.