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I graduated from college during the early 1990s recession, but worked up the nerve to quit a job that was not working for me.
People all around me were having trouble finding employment, just as they are now. I managed to find a full-time job working with developmentally challenged children that required I work evenings and nights. During the day I began freelance writing for a daily newspaper in the area. Since I was expecting my first child, the guaranteed paycheck was comforting. However, I knew at a certain point I'd have to take the big plunge and quit my job.
Here are some of the signs that you are ready to make the leap from employed to having your own business as an entrepreneur or working as an independent contractor.
You make more working for yourself
I figured out I could make more money working for myself than I could by staying a full-time employee. It no longer made sense from a financial perspective to be tied down for 8 hours when I could generate more income as an independent contractor. If you earn a salary, figure out how much you make an hour at your job and compare that to your self-employment income.
Childcare costs are too high
After I had my first child, I realized I could save a lot of money by working for myself and having a home office. I could not take the baby with me to my full-time job. I ended up working out of the house until my two sons were in school, using drop-in babysitters on occasion and saving tens of thousands of dollars.
Your health is going down hill
I noticed my stress levels were higher when I was employed. I gained a lot of weight as I struggled to balance my work life with my family life. After switching to self-employment, I felt less stress. I was becoming healthier every day as I took the baby for walks in the stroller and worked while the baby napped.
You have other options for health care
Health care benefits are a major piece of the puzzle when deciding whether you should quit your job, especially during a recession. While you are employed, seek out self-employment health insurance or see if you can be added to your spouse's health insurance policy. Having medical and dental coverage gave me the peace of mind I needed to take the big step to work for myself.
Join the individual investor revolution
Although the Roth IRA did not yet exist during the recession of the early 1990s, I did start saving money for the future. By the end of the 1990s I had opened up a Roth IRA account so I could contribute toward my retirement. I looked into other retirement accounts for self-employed people, but decided to begin contributing to a Roth IRA using a discount brokerage firm.
The biggest determining factor that made me quit my job during a recession was the knowledge that I would hire myself if I was a job candidate. I know myself well, and am confident I will not sleep on the job, be careless or lazy. When you are self-motivated and have marketable skills or talents, take the leap to design your own career or business. Within just a few months I had doubled my salary by working for myself, which gave us the extra money we needed to care for our newborn.
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