Gut Check: Leave HI job for side business?
Family of three. Spouse (SAHM) and I are in our early 40s, one kid in elementary school. I currently make $650k/yr W2 + I get to sell a % of my vested equity annually for another $100k - $250k per year. At fmv I have about $1.25m in post-tax vested options and another $1.5m not yet vested, but there is no exit in sight and the competition is currently better than us. I can likely get to C-suite in less than a year if I really want to play the game, but I don’t for the reasons already listed and the ridiculous amount of ego/hubris of the C-suite members. I’m just over the corporate life, or at least need a break. I also travel a lot! > 80 flights per year.
Our current monthly burn is $23k across housing, private school, a reno loan with 3 years remaining, car lease, and general stupid spending. By the start of 2027 we can realistically bring this down to $16k including marketplace insurance.
We have $1.6m in retirement, $950k in taxable, $200k in cash, and $1.1m in home equity. We bring in an additional $5.3k per month in rental income, and the side business currently gives me a $1.5k/mo stipend. I can raise the rent on the two units to $6k and still be under market. This would mean we’re spending $8.5k/mo more than we make. I would also take advantage of the year of no income (plus a $250k loss I’m carrying) to do a mega-backdoor.
The business - I started it a little over 3 years ago with two partners who collectively spend 25 hours a week on it. I currently spend less than 2 hours per week on mostly behind-the-scenes strategy, but if I leave my job I’ll be able to leverage my background to be prospect-facing and try to scale the business 2x faster. The business currently makes about $600k annually with ~70% margins. I wouldn’t take a salary in 2027, but instead set milestones that if hit would unlock health insurance coverage and increase the amount of distributions we could possibly take at the end of 2027. The business is also sitting on nearly $200k cash that we are hoping to use to buy another business to help increase revenue faster.
I really want to chart my own course. I’ve made good money over the last decade working my way up the corporate ladder, but I’ve made the owners multiples more. Time for a change. I’m definitely getting older and cherishing the family/friend time more now than ever before. I think I only have a few more years of working at high revs so I’d rather spend it growing my thing with my partners than growing someone else’s nut.
Am I taking on too much risk?