How Much Money You Actually NEED to Quit Corporate and Start Freelancing Without Panicking [ Freelancing to Financial Freedom ]
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How much money do you really need to quit your corporate job?
Many aspiring freelancers delay making the leap because they believe they must replace their entire salary before leaving their job. We will break down a practical, less intimidating approach that can help you transition with more confidence while avoiding financial overwhelm.
By the end of this episode, you will:
Learn a simple income rule for deciding when you're financially ready to leave your corporate job.
Discover how to build a financial safety net so you can leave your corporate job with stability.
Understand why having more time after quitting can accelerate your freelance income beyond your corporate salary as you continue to gain more clients.
Press play now to discover the financial benchmark that can help you leave your corporate job with a clear plan instead of unnecessary panic.
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Episode Transcript:
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By the end of this episode, you're going to find out how much money you actually need to quit your corporate job, and to start freelancing without panicking. Key word there, you don't need to panic. How much do you actually need? It'll be in this episode.
Welcome back to the show. So we are on Day 3 of the series, and we really talked about in Day 1, why most people never leave their job, and the cost of staying too long. Yesterday, we talked about corporate mindsets that are gonna hurt you in freelancing, and today we're talking about money, because this is such a big thing, and I know and I get it. So, I had a situation when I first started out freelancing, right, where You will all get to it at some point if you are freelancing and working in corporate, where you have to make the decision, like. do I quit my job and go full-time freelancing, or do I stick… or do I shut down the freelance business, maybe, or… and stick with corporate? Like, what do I do? And It's never easy. Like, you imagine it will be, and you… and I think what a lot of people hope for is that they will build their freelance business to the point that they'll be making just as much as they were making in corporate, or at the same time, in tandem, and it's like double salary, but guess what? It rarely happens like that. It rarely does, and it usually gets to a point, and this has actually just happened to a student of mine who quit his corporate job. It's like, you can't ride two horses at once, and you're really strapped with energy, your tension span is losing it, you're making mistakes on both fronts, and it's just getting to be too much, and you have to make that decision, right? And I was in that position. I was in a drought for a long time, I didn't have any new clients. And I was like, do I shut down my freelance business? Is this not worth it? Like, what do I do if I can't get any more clients? I'm getting tired of working at night on client work. I was running out of time during the day to actually market my business at the same time, and you need to market your business in order to get more clients, and I didn't have time to do that, because I had a few clients, and I was working a full-time job. It was a lot, let me tell you. So then, I had a client reach out to me, and they said, hey, I would love to work with you, you're local, which is so cool, like, can we meet? We met, sealed the deal, and I was like, well, hopefully they can pay me X amount. I can't even imagine, I think it was, like, $3,000 a month, and they came in at, like, $1,000, and I was like, oh god. and I think, you know, you know what, I think I worked them up to 1500s, but it wasn't the 3,000 I needed, because I was like, if I can make 3,000 more, I'll be at 5 or 6 grand a month, and then I'll be able to quit my job, and I'll have room to, like, get more clients, and I had all these dreams, and it wasn't that. But it was, you know, after a drought, it felt pretty good to be meeting with this guy, and to be getting another client. I signed on, and then the next day, or I didn't sign on, but, like, we agreed to work together. After that meeting in person. And then the next day, he sent me an email saying, oh, I just found out that headquarters won't let you use your own laptop, we have to mail you one, is that okay? oh my god, right? Because I was working corporate. There was no way I could log into another laptop into the office every single day. Like, no! And I was like, oh my god, I have to make a decision. I sat down with my husband, and we talked about finances, and we talked about, like, where I was. what I could grow to, and we put, like, kind of this limit on it, like, okay, if I can't… at least make it to… I think it was, like, match my salary within, like, 8 months, then I have to go back out and find another full-time job. And that terrified me, it really did. But, at the same time, I knew that I would all of a sudden have so much more time opened up, right? Like, not only am I removing my full-time job, I'm also removing the commute from the equation. I was like, okay, I think I can make this work, I hope? Like, now I'll finally have the time to market my services again, and market myself, and not… and also have time to work on client work. So I agreed. He ended up sending me the laptop, I quit my job, and I was like, oh, butterflies and rainbows finally, kind of. I was also really nervous. It all worked out. As you guys can see, I've been doing this for over 10 years. But it kinda helped me in terms of money, figure out what do I actually need in the bank? Because again, I was under this silly assumption that I needed to match my corporate salary, and that's so rare that that happens, because you just don't have the time. And here's what I came down to, and this is what I actually work on with my current students as well. It's what I call my two-thirds rule. Can you look at your salary, your corporate salary, your job salary? What do you make per month, okay? And this is without taxes being taken out and all that kind of stuff. So, can you get two-thirds of that from freelancing before thinking about quitting? A good example, if you're making $1,000, easy number, $1,000 a month, you would need to be making around $666. Okay, $660, we'll just say that. Around $660. in freelance income steadily. So that means you should have a good number of clients coming in for projects, or retainer clients, or both, alright? And then, do you have enough in your pipeline? My student, who just quit his corporate job, he has enough in his pipeline that he's able to look at that confident and be like, even if only one of these closes, or two of these closes, it still gives me that extra income I need. So you want to have two-thirds of your monthly salary, right? And then you also want to have some stuff in the pipeline that you think you can rely on. Now, another huge thing I want you to think about is taking the money that you've been making from freelancing and putting it all away. Do not touch it, right? If you're working full-time and you're freelancing, do not touch that freelancing money, okay? Keep it there in another bank account, alright?
What I also suggest is setting up savings accounts, okay? And siphon into those savings accounts all of your taxes, the money for taxes. So I tell my students, and you can find the money mapper in the show notes as well. My students use this as part of my curriculum, it's really important. I put on the high end of 30%. Every single month, no matter what I make, 30% of that goes into taxes. Now, you might want to set up another savings account for future health insurance, for utilities, if you're a single income earner, childcare, whatever it is, start siphoning all that, because if you have that full-time job. And you eventually want to freelance full-time, save all that money, and put it into, you know, like, the checking, which is normal, like, business expenses you can pull from, and maybe a salary eventually when you quit. And then also, like, the two savings accounts for miscellaneous extra, as well as taxes, right? So everybody wants to match their salary, but you don't actually need to. You also need to remember, like, the ability to focus on prospecting And having those hours after you quit is huge, and I think that was so big for me, and I will tell you, I was able to surpass my corporate income within a year of going freelancing. That's because all that time was available. I could focus on marketing my services again, and take the time to work on client work. And eventually, I was able to get to a point where, you know, I was able to raise my… my, pricing, and I was able to make it so I could only work a few hours a week. It was just, like, a few hours a week. A few hours a day, guys, I'm not at a few hours a week, let's be real here. So I think that's a good place to start, and a good benchmark that I hope is really helpful for you guys. Two-thirds… Remember that you don't need to match your salary, build those savings accounts as well, save everything you make from freelancing, and be sure that you have something in your pipeline as well before you quit your corporate job, alright? I hope this helps everyone know how much money they actually need in order to quit corporate and start freelancing, and don't panic, alright?
Stay tuned for tomorrow, where we're going to be talking about the fear of losing stability. Like, I think a lot of people come into freelancing wondering about, will I… how do I get over that fear of… It's losing so much that the corporate world provides you, and really it comes down to stability. Stay tuned for that. In the meantime, keep flourishing.
