How do YOU survive during tough times?
This is to startup entrepreneurs living with high rent in the Bay Area especially SF.
Do you sell cereal, freelance on the side, couchsurf? How do you stay afloat?
Do you sell cereal, freelance on the side, couchsurf? How do you stay afloat?
Never couple spending to income. That's a recipe for always feeling poor. Instead, find a baseline where you can live and make sure that it lies at such a tiny fraction of your normal income that you never need to think about thinks like "budgeting" or "saving".
So if you're fresh out of school with your first $50k/year job, make sure you can fit your entire life into $20k/year.
When you take that $120k/year job a few years later, live on $20k/year.
When you crack the $300k/year barrier with your RSUs from Google, live on $20k/year.
That is how I've always approached things, and it makes life a lot less stressful (since it removes the number one worry that everybody else has from the equation). There were several years when I was traveling and consulting where I'd only take one little $10k gig a year (or nothing at all), and there was never a question of running out of money because it naturally went out the door so slowly.
If you do what everybody else does and ramp your lifestyle up to meet your income, you're just ensuring that you'll be in trouble if things go south. But once you have a dozen years of accidentally saving (n-20) per year, you can survive for years at a time with no income at all, so bumps in the road don't feel bumpy at all.
Fix that and you'll stop needing to ask questions like this one.
I recommend fixing your spending at a %-age of your post tax income at a maximum. For me it is 50%, but that is on the conservative side for most people. I don't always spend 50%, but that is the max. I feel it is a good compromise between preparing for the future and rewarding yourself in the present
Keep them decoupled. That's the important thing.
When I wanted to cut down costs, I built some software to take advantage of referral programs from startups and used that to get free food for a few months. But if I found myself in a situation where I truly feared my ability to pay rent, I'd start contracting and look into moving elsewhere.
>I built some software to take advantage of referral programs from startups and used that to get free food for a few months.
Proxy... I know if you're smart you can take advantage of things, like for instance me not being smart, my credit cards fucked me, but smart people on the other hand, they sign up for credit cards and can make money off of it. Like $600/mo through all those signup bonuses or whatever.
That aggressiveness comes from reaching out to my existing network more, stretching that network to more people and also removing things that compromise in the contract work search (bonus if they’re also sapping money). So things like Netflix, eating out regularly, or anything else that’s definitely a Want but not a Need, are put on pause as well.
But this would be a lot easier if a buffer was created first so you wouldn’t reach this situation in the first place. Or if you did then you’re prepared better for weathering it out. You build a buffer to help you financially and also mentally: build up a war chest with either savings or investment money and do things that make you uncomfortable while you have the room to do so, so they don’t make a mess of you later.
If the tough times look to be continuing indefinitely they aren't tough times they are life and you have made some bad decisions about where you could afford to live..
Startup is high risk business.
I fish for contract work when it's available and try to generate passive income where possible. If you're living on $20k, the 3-4K you get from your asset portfolio goes a long way.
If I had no assets at all, I wouldn't be willing to enter the start up game . I'd look to ratchet up the ladder to a bigger buffer first then role the dice.
If I had to ... I'd consider taking s part-time job doing whatever and finding a living situation that the part time job could afford (e.g. Sharing an apartment uncomfortably). I'd spend the rest of the time on my start up or trying to ratchet up a better living situation.
What's that saying about logistics winning wars?
Huh? Breakfast cereal? Is this something people do in SF to earn money on the side? Or is it a joke I don't get?