Freedom: Learning stuff, doing consulting, aka the fun - and money balance

Introduction

As I was wide awake at 5am this morning, and it was the end of the month, I decided to do some invoicing (while the Mrs. & kids are still asleep ;) ).

Because I had some time left, I decided to take a look at my stats... This invoice app was built about 10 years ago in MsAccess in a few days, and has not really changed a lot since then (except for some adjustments to allow certain billing specific extents; things like non-EU or VAT-exclusive stuff, as well as some automated payment reminder letters).

Anyway, that is not the subject of this post, but as I was browsing some of my available graphs - it has been a few months since I did that - , I decided to write a small blog post about my findings.

I will start of with what most of you will probably consider quite a controversial thing; I will just post a *slightly censored* graph of my invoices cumul over my years as a company owner. ..

LOL, that looks odd...

There are a few things you might notice here:

  • That is not a regular income at all.
  • When I do have a good year, the line looks really steep (f.e. look at the yellow line from this year).
  • Looks like I have a good year every n years.
  • It looks like the steepness of your good years is increasing
In other words: what are you doing here? Let me explain my process...

In the beginning

... I was working as an employee, and walked a probably pretty standard path from being a developer to being an Oracle DBA (side-path), Jr. PM and eventually an ICT manager, all in a relatively small timespan. When I decided to start a business, I had some big plans about what to do, and decided it was now or never, so I quit my job and started developing some products I could use to build other products...

After selling it to a few clients (together with some customization), I decided I needed to build a better one, so I started doing that (not the best business decision ever, as you might know). However, while this decision was not really good from a business perspective, I was getting up to date with all the latest in tech, as I was using the newest versions of .Net and other new and exciting stuff, so I did learn a lot in the process...

The second one was not really a success, as I had some half-baked product I could use, but it was to generic, so I had not really considered how to market it. So I decided to do some part-time Oracle DBA consultance to fill a temp financial gap, with a one month contract, 2 days/week... But, as you can guess, that one month got extended with 3 months extra, and after that a year...

Having seen the easy path, I decided to go for it, so I started with yet another consulting job, this time 4 days/week.. This lasted for a small year, and after that, I decided to switch to fulltime consulting, and I kept doing that for over a year.... That one was obiously the pink line in the graph...

The reason the pink line was more steep the the previous one was due to 2 reasons IMO:

  1. Performing more hours
  2. Having learned a lot of valuable lessons during my first period as a product developer, a had a slight advantage over most of the developers. As I tend to think more "business-value driven", I can charge more to my clients...

Intermezzo - Time for a break

During that last consulting task, I told my customer I was not going to be able to make it on the 2nd of September, because my oldest son was going his first day to school, and I wanted to be there... He told me that was not possible, as he wanted me to perform some things for him during that period.

Suddenly it hit me like a brick: I had turned into a guy that valued money over life...

Some background info

During puberty, I had not one, but two uncles who worked really, really hard, planning on an early retirement (i.e. fifty-something) and living the life when retired. Both of them did not make it in their sixties (in fact, one of them died about 4 months after he retired). This left a huge impression on me, and I decided from that moment on that I would never make the same mistake, ever. So I started having a more of a carpe-diem mentality, working during the weekend, but only to sponsor me and my friends having fun, (i.e. sponsoring food, drinks, my car, my "kot" (i.e. student room))... I worked hard, earned some good money, but spent it all on "the good life". Even though I never regretted it, I do agree with my parents that I should not have spent it all; being a bit less "Carpe Diem" might have been the more sane approach ;).

The most important lesson for me was this:

  1. If you want to have fun, you need freedom
  2. You can buy freedom with money
  3. The more money you have, the more freedom you have
Most of the "successfull" people I know - i.e. considered successfull by society -, will tell you exactly what I mentioned above. However, there are a lot of people that society considers successfull, that I do not; here is why:

As your income changes, so does your perception of freedom, so you need more money... So you need to work more...

The plan a.k.a. the missing link, and why IT helps here

People building a house have a plan, people building a project have a plan, people doing whatever have a plan, but a lot of people I know do not really have a plan regarding what they want to do with their life, so they set goals like this:

I want to get rich, so I can do what I want.

This is not a good plan IMO, as an IT guy I see a lot of problems with this plan; it has to many unknowns:

  • What is "rich" ?
  • What is "doing what you want"
So let me try rephrasing the goal:

I want to earn enough money to do what I want with my life

That's better, but I still do not know what "doing what I want" means, so let us try rephrasing that one:

I want to earn enough money to:
  • Provide my wife and kids a life without to much hassle
    • Material:
      • House
      • Food
      • Education
      • Toys
      • ...
    • Personal
      • Quality time
      • Sharing things (knowledge, ...)
  • Enjoy myself
    • Work on things I like
    • Grown on a personal level
    • Expanding my horizons

That looks a lot better, but it is not complete yet. You really, really need to think about the choices you make, f.e. one can spend a lot of money on a house, but prices can go up exponentially... Do you really need a house that can house 10, while your family only consists out of 4 people? Would it kill you, if you postpone your renovation plans by 4 years, but it buys you some time with the kids? Do you need a big fancy car to impress the neighbours, or can you do with less ?

Another thing, is that your time is fixed; while it is fun to go to a very good restaurant, you can go out to a snack bar, and enjoy yourself for a percentage of the price. Your time is fixed, but your budget is not. I prefer to do both, so I prioritize, I can enjoy both a quick snack, but also an extensive dinner in a fancy restaurant...

It is all about priorities people - a.k.a. part deux

Most people seem to follow a Waterfall-like approach in life: they set their goals, start working on them and never look back. I tend to prefer the "lean" approach: I work in small incremental steps, towards conrete goals. One of those goals can be: earn enough money so that I can enjoy myself and my family for a year. Enjoying myself usually means spending time with the Mrs. and the kids, learning new things, and being really picky about the projects/clients you pick.

You can do this, but you have to pick some things, you can not have it all...

But, there is an added bonus in here ...

 

End of the intermezzo - The next lesson learned


One of my biggest enjoyments in life, next to having fun with the Mrs & kids, is learning something new. As an ENTP, I tend to have a very short attention span, and I am triggered by default by new and exciting/impossible things, in fact, I am usually attracted to things most people tend to walk away from...

Every time I learn something new, I take a paycut. Over the years I took some time to learn BDD/CQRS, or last year, about lean startups. This means less finances to spend on a fancy car, a big trip, some things on the house, but it also means I drove the kids to school in the morning, and was at home when the bus drove them back from school. So I benefitted in two ways, and lost in another. I had no problem with that, as I valued the advantages over the disadvantages.

But, here is the added bonus: taking some time of and learning things nobody else has the time to learn, increases my market value as a consultant. As all my newly acquired skills are usually helpfull in improving my business value as a consultant, I can charge more every time. And I can guarantee you people will be happy to pay what you charge, as long as you can deliver. So, in the end, taking free time to learn something new, will allow you to increase your income for the times you give up your freedom. This gives you three options:
  • You can now take longer periods of freedom mode inbetween consulting assignments, if you keep your expenses on the same level
  • Spend more money on some things you postponed while in freedom mode, and keep your freedom periods similar
  • A combo of both
My approach is usually the third one; I do spend some more money, but try to keep it reasonable.

I tend to think Rob is about to walk the same path lately...

Conclusion

Well, yet another lenghty post about why I think it is important to consider what you are doing and why you are doing it...

If you are doing what you love, and love what you are doing, everything else will come automatically....

Life is all about choices you make, so stop procrastinating or postponing whatever you are doing, set some very concrete, short term goals, and work towards them...

On a side note: people who know me personally: the reason I am currently doing all this commuting and time away from home, is that it buys me a whole 2 months of quality time with the kids during their vacation; once again it is all about choices...

Tom