Wednesday, January 20, 2010

The part I haven't been telling you

So, um, Torsten quit his job yesterday. His last day will be in two weeks.

This wasn't a sudden decision. He's wanted for years to start his own company, and now that we're settled here, he's started planning it in earnest. Working with my dad and his best friend, both of whom are also investing to become minority stakeholders, as well as a few other friends/partners, he is now ready to begin work on his own IT consulting firm.

It's happening, for real. We filed the papers to become an LLC. We got a federal tax ID number. We opened a business checking account. The logo and website design are complete, and we've found a vendor to actually build the website. We've applied for liability insurance. We purchased a computer, Quickbooks, a BlackBerry for Torsten, and various other equipment. He is ready to focus full-time on this company, and start working to make his first sale.

Right now I am incredibly thankful that we had a good mortgage broker who pointed out to us that with interest rates so low, it made more sense for us to get a 30-year mortgage and pay it off at 15-year rates as desired than to lock ourselves into a 15-year mortgage with a much higher required minimum payment. This allowed us the luxury of knowing that if one of us lost our job, the other's income would be sufficient to pay the bills.

We've been so good all year about paying the extra cash each month with the aim of paying the mortgage off in 15 years. It's going to be painful, feel like a cop-out, this month when I write the first check for the minimum amount. But we've promised ourselves that we will pay back the extra, plus a bit of padding, as soon as we can afford it again. I am tracking the minimum payments in a spreadsheet so we know exactly how much extra we need to inject once it becomes possible again.

In the meantime... well, my salary almost covers our expenses. It pays all our fixed costs: mortgage, car loan, utilities, phone, Internet, homeowners and car insurance, property taxes, dog, and so on. It doesn't cover our groceries, which is a big part of why we've significantly reduced our grocery spending. And it certainly doesn't cover extras like gratuitous shopping and meals out. That's why we've implemented this spending freeze. So far it's going well, but of course it's still new. We'll see how it feels once we're several months in. We are literally buying nothing that is not absolutely essential.

Torsten will be paying himself a small stipend each month, just to cover the grocery bill. We have decent savings in case of unexpected expenses. (I am sure as soon as his paycheck stops coming in, something expensive will break, because that's how this sort of thing always works, right?)

In the meantime, I am temporarily the sole breadwinner. I have complete faith in Torsten's ability to make his company a success, so the only thing that makes me stressed about this is the idea that I could potentially lose my job, thus losing all of our income plus our health insurance. So I had a nice long chat with my boss about all this, and she assured me that I am in no danger of losing my job. And I believe her, so I'm feeling much more relaxed about this whole thing.

In fact, I'm feeling downright good about the whole thing. Yes, it means that we have to be very frugal, and that now would not be a good time for me to get pregnant, and that Torsten will be working very long hours for awhile. But he's doing what he wants to do. He's so happy about it. And it's so great to see him so enthusiastic about what he's doing.

And we are hopeful that it won't take too long before his first sale. But we are prepared to live without a sale for a long time, if it takes longer than hoped to get the company off the ground.

But the company is so awesome. He has a really great concept and a fantastic implementation plan. And he's really freaking good at what he does. I have no doubt that he will make this company a success. And I can't wait to see it happen.

47 comments:

Bluebelle said...

That's really exciting, it'll be an amazing thing to work for together. Good luck!

Pickles and Dimes said...

This is super exciting! Good luck to Torsten and his new company!

Erin said...

Very exciting! Good luck to your family!

Lexilooo said...

Good for him! This is really exciting!

xoxb said...

How exciting! Good luck to Torsten!

Marie Green said...

Wow, that is just fantastic. I also think your timing is spot-on. This is one of those things that would be SO MUCH harder to do as the years tick by (specifically after you've added a child/ren to the mix).

What a wonderful adventure!

Shelly said...

Good luck!

pseudostoops said...

Go Torsten! Go family! So excited for you all!

Tess said...

Congrats to you both! How exciting.

SoMi's Nilsa said...

Yay, I'm so glad for Torsten being able to do what he wants to do. I'm so glad the two of you planned for this reality when you moved to Denver. And I'm really excited for what the future holds for the two of you.

tara said...

This is so exciting! Congratulations to you both.

And, even though it is really hard, I think that financially stressful times are what make or break marriages. Gabe and I got closer and closer the more poor we were. I think you and Torsten will do the exact same. Good luck!

maggie said...

Go Torsten! Woo!

Shelly Overlook said...

SO exciting!!! I can't wait to hear how this new journey in your life works out.

eleanorstrousers said...

Fingers crossed and wood knocked on for you both! Sounds like a sensible plan with goals and a strategy. What an exciting time!

missris said...

Oooh exciting! Good luck!

Kristen said...

wowza! good luck!!

Emily said...

That's very exciting news! Good luck to both of you - the spending freeze sounds hard but like it will be worth it in the long run!

d e v a n said...

Awesome!

artemisia said...

Congrats! I am so glad you guys are moving forward with this! I have total faith in you guys and in the business. Wahoo!

Kristie said...

It is so refreshing to know that you guys have really made a proper plan. You wouldn't belive how many of my clients walk in here, have started a business and have idea what they are doing. It makes my job almost impossible and I'm sure it costs them more money than is necessary.
I'm excited for you both!

lifeintheleftlane said...

That is so exciting to hear. I wish you guys the best of luck!

Erica said...

Oh, how exciting! And scary! We're planning on doing the same thing this spring and I'm TERRIFIED! Can I ask how you did the research to know all the legalities? That's what scares me the most. I know Gerald's idea is fabulous and he's worked SO! HARD! to get to this point, you know?

I'm keeping everything crossed for Torsten's new endeavor!

rosalicious said...

Congrats to you and Torsten! That's awesome you're making the dream a reality. Not sure if there's anything I can do, but if I can provide contacts or anything, let me know! :)

Mimi said...

Wow! That's so awesome that you guys are making it happen!

Mama Bub said...

You? Are a good wife! Good luck to you guys, sounds like such a great opportunity.

Meredith Travels said...

That's a huge life change, but it will work out. You can cover the bills, you have a plan, and even more importantly this is something that Torsten wants to do and will make him happy.

Also, that new Tax ID number? There are some sweet loop holes for that thing ie wholesale rates on furniture! Even living room furniture or maybe some new dining room chars one day?

Sarah said...

How thrilling! And terrifying! :) But it sounds like it is hardly a whim or an impulse decision, and that you've done everything possible to cover your bases and make sure you'll be ok for awhile. If any couple is likely to succeed at such a venture, it is you guys. My bets are on you!

Karen said...

Congrats to Torsten on starting his own business! That is so exciting. Hoping he will have customers soon! All the best!

Jummy said...

This sounds like a well thought out decision and I'm very excited for Torsten as he enters the world of self-employment!

I'm wishing the two of you all the best!

Lacey Bean said...

That's so great! Congrats to Torsteb (and you!) On this new endeavor! Good luck!! :)

Christiana said...

Wow! That's exciting for you guys. Way to go Torsten...what a talented guy!
PS We'll try to get those goat picts to you as soon as we can!

Jersey said...

Congrats! That's so exciting! I understand how it feels to be a little nervous about the money- just last night I cried on the phone with Achoo over our finances. Not that anything is wrong, but I think and worry too much before I know what the bottom line of numbers is going to be!

Break a leg with the new business!

amber said...

Oh GOOD! I'm so happy for you both. Goodluck to Torsten (who I'm sure will be a smashing success)!

Janssen said...

WOW! That is huge news! Good for you guys - he is lucky to have you be so supportive (more so emotionally, than financially).

Our own spending freeze has really been better than I thought. I haven't felt the depravity I thought I might, and I'm amazed at how many things I can do for absolutely free.

ccr in MA said...

Well, exciting and nerve-wracking, yes. Good luck, Torsten!

Allie said...

Congratulations! J left his super stable job to be a partner at a new company with two former colleagues a few years ago. At the time, it was a little scary, but now, I am so glad that we took that risk. He's so much happier doing work that's important to him and getting to work the way he wants to. Wishing you guys the best!

Fine For Now said...

Best of luck to you guys!

Erin said...

Congratulations! It takes big guts to start a business! :)

Alex said...

Best of luck! I'm excited for you both!

Non Sequitur Chica said...

Wow! That's so exciting! Good luck to Torsten!

Swistle said...

Oh! This is very exciting and startling and interesting!

Penny said...

Wow, awesome! And scary, yes. I loved all the purchasing things about my business up front, even the liability insurance. It all felt very grown up and responsible! I hope it goes well for him over here. Certainly you'd think, with the growing business climate here, that an independent IT business can find its niche.

Deutlich said...

Oh man, that sounds like a lovely foray into new territory! Congrats to you both and good for Torsten that he can do this!!

.:*aMbAr*:. said...

OMG. Would I be a creep if I asked where he used to work at??? My bf wants to do the exact same thing. Only thing is that I cannot even pay for gas right now, which sucks. He has to support me until I finish school and then, I'll support both our booties I guess :D

This was so brave of you guys, I wish him luck and success.

willikat said...

Last year I went on a spending freeze to pay off my credit card debt. we could afford to use one of our salaries for fixed costs. I paid my debt and groceries. it was tough at first but actually got easier as time went on, and I'm still not a perfect spender (far from it, actually), but it's amazing how it enriches your life in different ways.

Good luck to Torsten! I hope someday to also go out on my own, and I wish him (and you) the greatest of successes.

Melly said...

This is very exciting! Being self-employed is an amazing experience! - and hiring an accountant is paramount!

Torsten will need to pay taxes (16%+ of his income) straight to the IRS - either estimated or lump-sum taxes. He can deduct all the work expenses for the new business (Blackberry, software, track mileage through start/stop odometer readings, etc.) He can also claim a home office deduction.. but an accountant is ESSENTIAL!

Stefanie said...

Wow. How exciting! It's a risk, but it sounds like a pretty safe one. Good luck to him!