As always, I'm happy to answer any questions. :)
I'm genuinely curious about this. Most successful consultants (that I know) have decades of experience in a specific industry or specialty, thus they have a large amount of knowledge based on actual, real-world experience and that is why clients seek them out. They are very successful, but that success seems solely based on their years of experience and insight.
I see so many people claiming they consult, when infact they freelance. They get assigned work, as a temporary employee. Nathan sounds like he started freelancing and now he gets a bit of consulting in the mix too.
When I first did freelancing I was 15 and 16, so it was much more difficult then.
Is it something mundane like saving for a bigger house, or your pension, or are you reinvesting?
I'm not sure what I'm saving for, but the more money I have, the more reluctant I am to purchase things. For example, I have wanted to buy a Lotus Elise for a long time. My theory was I would get a used one for about $30,000. I convinced my wife that I could buy one when we had $100k in the bank. Now that we are close to that number, I don't want to spend it on something so frivolous.
We'll probably continue saving for a house. For now I am going to do some more traveling and continue to live as inexpensively as possible. For example, my current rent is $650 a month.
I have freelancers I work with who tell me: "I'll just be fine when I've got 2 months of expenses in the bank". I tell them they probably won't, then they laugh, then eventually some of them see what I mean.
Sounds like you've got about 2 years of 'runway' in the bank - with no income and stable expenses, you could go for 2 years. I'm in a similar situation, and have found myself wanting less and less to spend any money. Some of that comes from simply remembering the effort it took to build up that amount, and then spending it literally in an instant on anything feels weird now. Yeah, I'd like a bigger TV (ours if 42" but 7 year old "ED" TV, not HD), but see little point in it as this one still works. Newer car? Yeah, would be nice - I can pay cash for a nice used car, but will probably hold on to this 8 year old one for another year or two.
The only things I'd like to buy, I want to pay cash for, and I'm still a long ways away (things like a private airplane, much larger house, etc). We do travel some - my wife will be going to Australia and I'll be going to Russia - buying those sorts of experiences with our families is one of the few things that we agree on spending money on. Outside of that, just continuing to pile up cash until there's a compelling case for spending it (or a true emergency need) is probably all you can do.
This is where true freedom comes from.
With a runway like that, one can afford both psychologically and literally to double down and crank out a lot more products or businesses to get oneself up to a 5 or 10 year runway (or even "financial independence" if one is very lucky).
I think the best thing to do once a little momentum is gained is to grab onto the pendulum and get it swinging big so one can travel, buy a house, and all those sorts of things in 3-5 years. (This is not a direct advice to you since it seems you are already thinking this way :-))
However, what I've noticed is that instead of "no, we can't do that now - let's try to work on a plan to set aside 8 months of savings to let you focus on your idea", it's been just "no, you're not doing that". But... are you going to divorce someone over that?
Both our cars are older (7 and 13 years old) and have been paid off for some time. Not having a car payment is great!
The interesting thing is that with the years this has also affected other broader considerations. Nowadays I don't really think about buying a house anymore, as it is too big of a 'money and time' commitment and also because it would make it harder for me to move somewhere (which I've been doing quite often now).
Same applies to having a car. While I agree that having one can be incredibly convenient (and, sometimes, even necessary), I feel so much better not having to worry about gas, taxes, or maintenance.
Gas - certainly a concern, but so is bus/subway fares, which replace gas if you don't have a car but still need to move around.
Taxes - for 2 cars we pay about $150/year.
Insurance - possibly $1000 per year.
So... maybe $100/month for taxes/insurance on 2 cars - for most people this won't break the bank. This also allows us to live in a more rural area with a somewhat lower cost of living (lower taxes for a start).
Maintenance - yeah, some. I don't think we worry about it, much like you don't 'worry' much about your electric bill or internet bill. It's a factor in life - there are repairs that come up, but again, the ability to be mobile when we want, in areas that aren't otherwise served by mass transit - is, for us, a plus right now.
Replacing gas/tax/insurance with monthly subway tickets, which I'd probably need to do if I lived in a major city, seems like it might be about the same (IIRC, a two week pass in Moscow cost be about $50?).
But my point was not really related to cost, but to "freedom" in some sense. After the money saving, then no longer wanting to spend money on unnecessary things (but travelling), then moving around, I feel I no longer want to have a car.
Mainly for two reasons:
- I don't miss being stuck in traffic on the drivers seat, or trying to find parking spots. If I'm on a bus, and there is traffic, I don't mind as much as I can read, or browse the Internet, or game or whatever.
- If I don't have a car, I don't need to worry what to do with it if I want to move. No worries about trying to sell it, or wondering if it is worth it to take the car to the new place, what's the traffic legislation on the new place, etc.
Yet another part of my PoV is that, even if a car is necessary, I no longer want a new/expensive car. For example, before moving to the city where I currently live, I had to have a car (as there wasn't much of public transportation there). But at that point all I wanted was a used car that's good enough for the daily needs; and that I wouldn't mind getting rid off later.
Common sense would suggest that having a load of $$$ would make you free with your money, but instead (if you're smart), it makes you feel very protective of it.
Get a high-deductible policy ($3.5k - $10k) and your premiums for an average family could be between $300 and $600/month. (blue cross blue shield in north carolina, husband and wife in 40s and 2 teenage kids - sample quote).