Currently out of a job, cant decide whether to go self employed solo or go employed on salary

Rebrand

Just come out of being employed for last 5 years, pay was good. But left due to being unhappy and no progression. Previously was self employed for over 10 years but wasn't earning anything like the employed work I was doing. 
Single, still living with a parent , but striving to one day have my own place. Been saving hard for over 10 years and don't feel like I've been able to enjoy life due to saving.
Currently feeling stuck as to which direction to go in. I have loads of ideas for potential business ideas but unsure if I can earn enough with the ideas. I am in a position to buy a house if I go back to being employed but know that truly one day would be happiest working for myself. 
I know going self employed it will be at least 3 years to buying a house if I can earn enough each year. 
Essentially looking at a career change and salary drop if starting in a new role. 
Any tips to help me choose would be gratefully appreciated thanks

DullGreyGuy

If your ultimate dream is to be self employed then it's going to be easier to take the hit now of the pivot whilst living with parents and not having to support a spouse or kids etc. I know several people who would love to change their jobs but with big mortgages and 3 kids to pay for they cannot afford to halve their income. 

I've been tempted myself once or twice but to get back to my current salary would be 5-8 years and whilst could potentially double my salary after that there is no chance on earth the mortgage could get paid were I to go to the near minimum wage they pay trainees (with the firm paying the training costs etc)

Savvy_Sue

DullGreyGuy said:

If your ultimate dream is to be self employed then it's going to be easier to take the hit now of the pivot whilst living with parents and not having to support a spouse or kids etc. I know several people who would love to change their jobs but with big mortgages and 3 kids to pay for they cannot afford to halve their income. 

This. DS1 is well known in his field and says he is still slightly taken aback when someone asks how to become a successful XXX, has to adjust his thinking to accept that the description is accurately applied to him. But his response is that it helps if you start while you have no ties or responsibilities. In fact he wasn't still living at home, so he did have rent to pay, but no-one was depending on him. 

Casting my mind back, he started by doing XXX in his spare time, then reduced to working 4 days pw so he could spend more time on what was then a hobby. Then it was 3 days pw, and it was going quite nicely. He took the plunge when an amazing opportunity came his way - I thought he was taking some unpaid leave but then discovered he'd given notice. 

So it doesn't have to be an Either / Or choice. Over the years I've known many people working part-time while making some money doing something else, and quite a few who have then given up the day job to pursue the other. Is that a possibility? 

Grumpy_chap

I am going to disagree with @DullGreyGuy and @Savvy_Sue and say to get the mortgage first and reach a point of financial independence / resilience before jumping from the employed bandwagon to the self-employed (either sole-trader or own Ltd Co.) uncertainty.
That is what I did - starting my Ltd Co. in 2015 with sufficient financial resilience behind me that if the venture completely failed, I'd be able to tolerate the dent and simply revert to finding a new employed role.

I am not saying that I am right.  Nor are alternative approaches necessarily correct.
I am simply putting my experience as an alternative narrative.
I think the main thing is, it can be made to work either way round, and you need to put your own business plan together and run some "what if?" scenarios to establish when you are ready (and sufficiently financially resilient) for starting your own business.

DullGreyGuy

Grumpy_chap said:

I am going to disagree with DullGreyGuy and Savvy_Sue and say to get the mortgage first and reach a point of financial independence / resilience before jumping from the employed bandwagon to the self-employed (either sole-trader or own Ltd Co.) uncertainty.

How are you defining financial independence @Grumpy_Chap? Certainly many would say that isnt until you've paid off your mortgage so would be 30+ years for the OP.

Some may say its when you can live 3 years without an income... that may come sooner for the OP but others it may not be until after the mortgage is paid off. Plenty will never reach it with the inevitable changes that happen in life resulting in you forever chasing your tail. 

It is however very much a personal decision, some would prefer the nice house and work like a dog in a job you dont enjoy and potentially never live the dream career (see the other post on here from the person wanting to be a pilot but cannot afford it) others may prefer to have their dream career and live more month to month without the big house etc. 

Marcon

Rebrand said:

Just come out of being employed for last 5 years, pay was good. But left due to being unhappy and no progression. Previously was self employed for over 10 years but wasn't earning anything like the employed work I was doing. 
Single, still living with a parent , but striving to one day have my own place. Been saving hard for over 10 years and don't feel like I've been able to enjoy life due to saving.
Currently feeling stuck as to which direction to go in. I have loads of ideas for potential business ideas but unsure if I can earn enough with the ideas. I am in a position to buy a house if I go back to being employed but know that truly one day would be happiest working for myself. 
I know going self employed it will be at least 3 years to buying a house if I can earn enough each year. 
Essentially looking at a career change and salary drop if starting in a new role. 
Any tips to help me choose would be gratefully appreciated thanks

You've been saving hard for over a decade because you want to buy a property, but then chose to leave your well-paid job because you were 'unhappy' - thus scuppering your chances of a successful mortgage application in the immediate future.

You've been self employed before but didn't earn much, so you are still living in the parental home, despite striving to have your own place, and you feel you have been missing out on enjoying life because you were saving.

All a bit contradictory! Maybe planting your feet firmly on the ground and working out your priorities would be no bad thing - and getting some pleasure out of life in the short term is a wholly legitimate aim.

Having 'loads of ideas' sounds equally lacking in focus. Ideas don't pay the bills; cash does that. Have you actually developed any of these ideas into a business plan, researched what finance you'd need, what the client base might be...? 

Based purely on what you've said in your post, it does sound as if doing a bit of 'growing up' might be no bad thing - and while continuing to live at home might be cosy and comfortable and help the savings effort, parents aren't always the ideal aid to making such a transition. Have you thought about doing something which really would get you out of the nest and standing on your own two feet, whether that's a stint of voluntary service somewhere, a working holiday abroad or anything else which would give you a chance to breath, grow and reflect on what to do next.

Grumpy_chap

DullGreyGuy said:

How are you defining financial independence @Grumpy_Chap? Certainly many would say that isnt until you've paid off your mortgage so would be 30+ years for the OP.

Some may say its when you can live 3 years without an income... that may come sooner for the OP but others it may not be until after the mortgage is paid off. 

Well, I think it is when you are sufficiently resilient to be able to cope if the new business does not take off as much or as quickly as the business plan suggests.  Enough resilience to absorb doing work for a customer who never pays.

Rebrand

Marcon said:

Rebrand said:

Just come out of being employed for last 5 years, pay was good. But left due to being unhappy and no progression. Previously was self employed for over 10 years but wasn't earning anything like the employed work I was doing. 
Single, still living with a parent , but striving to one day have my own place. Been saving hard for over 10 years and don't feel like I've been able to enjoy life due to saving.
Currently feeling stuck as to which direction to go in. I have loads of ideas for potential business ideas but unsure if I can earn enough with the ideas. I am in a position to buy a house if I go back to being employed but know that truly one day would be happiest working for myself. 
I know going self employed it will be at least 3 years to buying a house if I can earn enough each year. 
Essentially looking at a career change and salary drop if starting in a new role. 
Any tips to help me choose would be gratefully appreciated thanks

You've been saving hard for over a decade because you want to buy a property, but then chose to leave your well-paid job because you were 'unhappy' - thus scuppering your chances of a successful mortgage application in the immediate future.

You've been self employed before but didn't earn much, so you are still living in the parental home, despite striving to have your own place, and you feel you have been missing out on enjoying life because you were saving.

All a bit contradictory! Maybe planting your feet firmly on the ground and working out your priorities would be no bad thing - and getting some pleasure out of life in the short term is a wholly legitimate aim.

Having 'loads of ideas' sounds equally lacking in focus. Ideas don't pay the bills; cash does that. Have you actually developed any of these ideas into a business plan, researched what finance you'd need, what the client base might be...? 

Based purely on what you've said in your post, it does sound as if doing a bit of 'growing up' might be no bad thing - and while continuing to live at home might be cosy and comfortable and help the savings effort, parents aren't always the ideal aid to making such a transition. Have you thought about doing something which really would get you out of the nest and standing on your own two feet, whether that's a stint of voluntary service somewhere, a working holiday abroad or anything else which would give you a chance to breath, grow and reflect on what to do next.

Thanks for the comments, Will take them on board

Rebrand

DullGreyGuy said:

If your ultimate dream is to be self employed then it's going to be easier to take the hit now of the pivot whilst living with parents and not having to support a spouse or kids etc. I know several people who would love to change their jobs but with big mortgages and 3 kids to pay for they cannot afford to halve their income. 

I've been tempted myself once or twice but to get back to my current salary would be 5-8 years and whilst could potentially double my salary after that there is no chance on earth the mortgage could get paid were I to go to the near minimum wage they pay trainees (with the firm paying the training costs etc)

Thanks DullgreyGuy, that's the tricky decision, continue living at home working hard to build your business or go employed to be ok on the money but not fully happy and get too comfortable on the "salary" and struggle to make the leap another time. 

Elliott.T123

Grumpy_chap said:

I am going to disagree with @DullGreyGuy and @Savvy_Sue and say to get the mortgage first and reach a point of financial independence / resilience before jumping from the employed bandwagon to the self-employed (either sole-trader or own Ltd Co.) uncertainty.
That is what I did - starting my Ltd Co. in 2015 with sufficient financial resilience behind me that if the venture completely failed, I'd be able to tolerate the dent and simply revert to finding a new employed role.

I am not saying that I am right.  Nor are alternative approaches necessarily correct.
I am simply putting my experience as an alternative narrative.
I think the main thing is, it can be made to work either way round, and you need to put your own business plan together and run some "what if?" scenarios to establish when you are ready (and sufficiently financially resilient) for starting your own business.

I think this depends massively on if that is even possible. I was in your position, I was saving with a plan to build up a buffer and then go self employed (Ltd). Then all of a sudden I went from single with no responsibilities living cheaply to married, pet and a child on the way with hopes of a second and a higher mortgage. With my industry salary ceilings meant that any chance of building a buffer with that was long gone. Luckily for me furlough came along and I used that time to set up and get the Ltd co going and its flown from there. But if I had tried to reach financial independence before starting I would likely have never managed it.