Transitioning from a full-time job to self employment can be a very stressful and frightening experience. Whether you succeed will depend on a few factors.
Bye, Bye, Paycheck
There's no doubt about it, self employment doesn't guarantee a steady paycheck. This is especially true when you are first starting out. To make up for this, you should have a decent sized nest egg to ensure that you can pay your bills. Something around twenty thousand dollars or so.
Another option is to simply move in with your family, which could potentially give you free rent. You'll have to discuss it with them, and see what you can work out. If you can manage to get free rent then you don't need to have as much money saved up. However, if you can acquire free rent, you should still have at least five thousand or so dollars stashed away. Unless your parents are going to just pay for everything, which means you don't have to have any savings. Lucky you.
Good Business Plan
What is your business going to be? You may want to write some of it down on paper, and see if it's a reasonable business plan. Then you can show it to your friends, and ask them what they think about it. Or you could ask someone who is already self employed, which is probably the better strategy.
One of the more important rules of being self employed is to not put all of your eggs in one basket. It's a well known saying, but it's also a very important one. So if you want to design websites then you should have a few dozen clients(more is better). You never know, some of these clients might one day go bankrupt. And if you only have a handful of these clients then you could be in a lot of trouble.
Social Isolation
If you're going to go the self employment route then you need to be prepared for the isolation. There will be no coffee breaks with your cubicle buddies when you are self employed. Unless, of course, you hire people. But you would be the boss in that case, and bosses don't always hang out with their employees.
You'll simply have to be content with eating out occasionally with some of your friends. And if you don't have that many friends then being socially isolated probably will not bother you much.
Benefits
Benefits such as health insurance will now be up to you to manage. So you'll definitely want to buy an insurance plan from an agency such as Assurant Health. If you're young and in good health then you'll probably end up paying around a hundred and twenty five dollars per month for health insurance.
Other benefits, such as vacation days, are up to you manage now as well. But don't forget that you will not earn money on these vacation days unless you develop a passive income stream of some kind. So be careful.
Being a self employed individual can be very difficult, but the rewards from succeeding are more than worth it. So if you feel that self employment is your best bet then give it a try. If you don't succeed, you can always get another day job.
