Post If You're Self-Employed

[slush fund]

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(crossposted in OOT)

If you're self-employed I'd like to hear a little about what you do. I've always thought I'd end up being self-employed soon after, if not directly after, graduation. A lot of other posters are probably in the same boat. I think it would be helpful for those of us who are interested in eventually being our own boss by hearing from those who actually are.

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i have owned my own law firm for a little over four years

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How'd you end up working for yourself?

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my family owned a furniture distributorship. my grandfather started it and my father grew up working there. i worked there in the summers as a kid. so the idea of working for someone else didn't really cross my mind growing up, i always knew i would somehow work for myself.

when i graduated from law school, i had been working in a firm that was doing car accidents and insurance law. it was a joke of a business that anyone could do so i asked another attorney working there if she wanted to start our own shop and she said yes. we did pretty good for about a year. we were making decent money, probably at least or a little more than we would have being 1st year lawyers, but hey we were our own bosses. after about 9 months tho, i began to see some problems in the business. there was too much competition and the only way i could see passing the ceiling we were at and grow the business was to break the law and several ethics codes. on top of that, my partner wasn't very ambitious. she was a great girl, but would have been happy to just keep on as we were. so i decided to scrap it. i did some research for a couple of months and found a new business idea. i got a new partner who took out a home equity loan and we started a new law firm in the spare bedroom of my partners condo. that was four years ago. we now have 28 employees and about 5000 sq. feet of office space.

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What do you do?

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its a law firm, but its about 90% business, 10% law. pretty much a paper factory with minimal court appearances

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Do you enjoy what you do?

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no, not really. nothing sours someone on the law like going to law school and then dealing with the court system, especially other attorneys and judges. but if you are smart and have some hustle, a law license is basically a license to print money

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Do you have any advice or recommendations? What have you learned?

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having the right partners is critical. starting from scratch takes persistence and faith. we worked for almost 8 months before we took our first paycheck.

also, i think this is one of the most important things. never, never be afraid to reinvest profits into growing the business. this was one of the biggest lessons i have learned. it is the only way you can be in a constant state of growth. we have from the beginning of the business reinvested between 10-20% of the profits back into the business. this was difficult to do, especially when we started to have some success. whether it was new software, computers, office space, employees, we just expect to spend the money. i am positive its been one of the main reasons why we have been able to grow. it creates a culture of growth that motivates us.

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Any regrets?

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no, none yet i can think of. we have worked a lot but i do have to say that we have had a few lucky breaks. haven't faced any major crises after the first year and have been growing steady ever since. i wish i ran this good at cards.

[DesertCat]

My last startup wound down and I didn't want to manage any more software development projects. And I was tired of living in a rainforest (the pacific NW). So I decided to invest my remaining savings and see if I could live off it's income. I needed a 15% return the first year just to pay my living expenses. I was able to beat that and grow my portfolio. After 5 years or so I now need around a 5% return annually for living expenses.

No regrets, it's been a pretty awesome lifestyle. I work from home, and have two young kids I get to see all day long. And if I want to take a break for some "afternoon delight" with the wife, it's a done deal!

No real advice. I think if you understand a business where you can earn superior returns, being self employed is a good option. But you really have to be skilled and enjoy what you are doing. My biggest joy is not having employees anymore, my biggest regret is not having co-workers anymore.

[Shoe]

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My last startup wound down and I didn't want to manage any more software development projects. And I was tired of living in a rainforest (the pacific NW). So I decided to invest my remaining savings and see if I could live off it's income. I needed a 15% return the first year just to pay my living expenses. I was able to beat that and grow my portfolio. After 5 years or so I now need around a 5% return annually for living expenses.

No regrets, it's been a pretty awesome lifestyle. I work from home, and have two young kids I get to see all day long. And if I want to take a break for some "afternoon delight" with the wife, it's a done deal!

No real advice. I think if you understand a business where you can earn superior returns, being self employed is a good option. But you really have to be skilled and enjoy what you are doing. My biggest joy is not having employees anymore, my biggest regret is not having co-workers anymore.

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When you first started out and needed a 15% return, do you feel you got lucky to exceed that (i.e., just happened to start investing at what happened to be an opportune time looking back), or was it mainly skill, or a little bit of both? If you knew what you do now, would you have done anything differently back when you first started out, such as take on more/less risk, or perhaps use a different approach or anything else?

My goal is to get to the point where I can also live off my investments, but have a long ways to ago before even 15% would pay for my living expenses.

[DesertCat]

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When you first started out and needed a 15% return, do you feel you got lucky to exceed that (i.e., just happened to start investing at what happened to be an opportune time looking back), or was it mainly skill, or a little bit of both?

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It was probably an opportune time, but I had done quite a few deals in my part-time (real deals with real money) before I quit, and they all returned a multiple of 15% annualized.

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If you knew what you do now, would you have done anything differently back when you first started out, such as take on more/less risk, or perhaps use a different approach or anything else?


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Quit my job sooner. Not applying myself as a value investor easily cost me huge, as I sat on a bunch of internet stocks that collapsed. I don't feel I take on too much risk. I rarely use margin debt. I buy stuff with real value and real businesses very cheap.