Under the Radar

◼   ► welcome to under the radar show but

◼   ► independent iOS app development I'm

◼   ► Marco Arment

◼   ► and I'm David Smith under the radar is

◼   ► never longer than 30 minutes so let's

◼   ► get started so today we are kind of

◼   ► doing the part two to last week's kind

◼   ► of I don't know going into 101 or going

◼   ► into the spreadsheet way discussion

◼   ► where we talked a little bit about

◼   ► forming a forming your business

◼   ► considerations around taxes and to

◼   ► considerations around income so if you

◼   ► haven't heard that go listen to the head

◼   ► before this before you listen to this

◼   ► because those are more important in some

◼   ► ways and more foundational to kind of

◼   ► what we're gonna talk about now but

◼   ► really what we're going to be unpacking

◼   ► for the rest of this episode is trying

◼   ► to think through all the different

◼   ► expenses that you are going to have once

◼   ► you kind of workout at a vague level

◼   ► what your income goals might be what the

◼   ► tax is around that are going to be and

◼   ► then you have to like work out well what

◼   ► are the other expenses when suddenly if

◼   ► you're self-employed and you're becoming

◼   ► you know you're suddenly becoming

◼   ► responsible for all of the expenses

◼   ► associated with running a business

◼   ► what are those going to be so you're not

◼   ► caught out or surprised by what they

◼   ► they may be and some of these you may

◼   ► not have thought of but the one that was

◼   ► probably going to start with that you

◼   ► almost certainly have thought about if

◼   ► you live in the United States is health

◼   ► care and health insurance because almost

◼   ► certainly if you work at a traditional

◼   ► employer currently there you know that

◼   ► employer is providing in some way your

◼   ► your health care yeah they're they're

◼   ► paying for it themselves or you're

◼   ► paying for it but they're choosing it

◼   ► and it's a group plan and this is

◼   ► something that I feel is so often the it

◼   ► can be a little emotional and personal

◼   ► because you know health care is a very

◼   ► if not it's not this kind of it's not

◼   ► like choosing your business card

◼   ► provider or choosing you know which

◼   ► computer you buy like those decisions

◼   ► while important for your business

◼   ► perhaps like aren't nearly as personal

◼   ► and impactful for things that other than

◼   ► you know this affects your family and

◼   ► can affect you know your family in a

◼   ► very substantial way

◼   ► so can end up being I think feeling

◼   ► something very scary now but I would

◼   ► encourage you to always think that the

◼   ► health insurance is just another number

◼   ► that you have to pay for and

◼   ► it's not the you know it's like you can

◼   ► easily become something that is a bit

◼   ► you can build it up to be something

◼   ► that's a bit more emotional or a bit

◼   ► more scary like you know right now my

◼   ► employer just takes care of that now I

◼   ► have to do that it's like well hey

◼   ► you're kind of already paying for it now

◼   ► because you're it's not like your

◼   ► employer gets their health insurance for

◼   ► free like they're paying for it for you

◼   ► and that's in some ways your money that

◼   ► is just being their you know their core

◼   ► they're having control over it so at

◼   ► least one advantage of paying for your

◼   ► own health insurance is you can you know

◼   ► tailor and choose and match it to your

◼   ► family's needs goals risks tolerance

◼   ► savings etc like you can choose that but

◼   ► ultimately just understand that it is

◼   ► just a number it is something that you

◼   ► now have to choose and make that those

◼   ► choices can be complicated and you know

◼   ► kind of challenging perhaps but it is

◼   ► just a number and once you turn it into

◼   ► a number I thought I found for myself

◼   ► that it made it a lot less scary a lot

◼   ► less problematic that I could just say

◼   ► like okay I'm gonna spend this amount of

◼   ► money on health care I put that into my

◼   ► budget I put it into my spreadsheet it's

◼   ► and then just it's just covered it's

◼   ► taken care of I don't have to think

◼   ► about it or worry about it because you

◼   ► know ultimately that's all it is it's an

◼   ► expense and then you know it'll have

◼   ► implications perhaps you know put in

◼   ► your personal life in terms of the

◼   ► different depending on the kind of

◼   ► insurance you have you know when you go

◼   ► to a doctor different things will happen

◼   ► you may have a high deductible or you

◼   ► gave to pay a copay and you know that

◼   ► part of it is certainly something that

◼   ► you can is worth considering but it's

◼   ► not this big scary thing it's mostly

◼   ► it's just an expense and it's pretty

◼   ► expensive it's probably after taxes your

◼   ► next biggest expense but it's not

◼   ► anything more than just another number

◼   ► and just another budget item that you

◼   ► have to take care of exactly like the

◼   ► the debate in your head should not be

◼   ► like I can't go indie because I would

◼   ► need to pay for health insurance or I

◼   ► wouldn't be able to health insurance

◼   ► instead it's when I go indie I have to

◼   ► find a way to make you know X extra

◼   ► dollars per month then what I then what

◼   ► I might have originally thought because

◼   ► it has to pay for health insurance cuz

◼   ► you know like as you mentioned like

◼   ► right now like someone's paying you know

◼   ► what whether you're paying for part or

◼   ► all of it yourself or chances are your

◼   ► employer is paying for you know part

◼   ► of it you know there's there's a lot

◼   ► that employers pay to have an employee

◼   ► that is not just the salary that you get

◼   ► and you know we started talking about

◼   ► this last week with with like you know

◼   ► the employer half of a lot of these

◼   ► taxes and other various you know

◼   ► employee employment taxes that you will

◼   ► have to either pay or pay some kind of

◼   ► alternative to now but also you know

◼   ► health care is part of that you know

◼   ► just office expenses like if they pay

◼   ► you say fifty thousand dollars a year

◼   ► you might be costing them sixty five

◼   ► thousand dollars a year or seventy

◼   ► thousand dollars a year or more like

◼   ► that you know depending on what kind of

◼   ► expenses they have to have employees and

◼   ► and so when you go independent it's not

◼   ► that you can't do that it's not that you

◼   ► can't pay for those things you just have

◼   ► to know how much to charge for your

◼   ► consulting services how much you how

◼   ► much income you need from products like

◼   ► stuff like it's these are not numbers to

◼   ► scare you off but to instead inform how

◼   ► you make your projections how you know

◼   ► what you need and how you set your

◼   ► prices I remember early days and I was

◼   ► doing consulting I would sign a contract

◼   ► to do a work and the number like the

◼   ► income that I was getting seemed so big

◼   ► and so like wow that's like that's a lot

◼   ► of money like I'm gonna use like this

◼   ► contract just for $20,000 like which in

◼   ► a in regular day-to-day life is a lot of

◼   ► money like but it the important thing

◼   ► that I always had to in the back of my

◼   ► mind have and this is just a rule of

◼   ► thumb that I found to be pretty helpful

◼   ► is to say like whatever that

◼   ► top-of-the-line number is it's like at

◼   ► least half of it is going to something

◼   ► else and so like it's not that I didn't

◼   ► I didn't just make in that in this in

◼   ► that example I didn't make $20,000 I

◼   ► made $10,000 and that additional 10,000

◼   ► is going to be going to all manner of

◼   ► things taxes health care office expenses

◼   ► etc and so it's important to just have

◼   ► that in the back of your mind that you

◼   ► know think these are all just numbers

◼   ► that you just have to balance and know

◼   ► what they are but you know it's good

◼   ► then the reason you're doing this is so

◼   ► that you can make sure you're charging

◼   ► enough because you know ultimately if

◼   ► you don't then that's when things like

◼   ► health care can become problematic

◼   ► you need to have the money to afford to

◼   ► pay for it exactly because like you

◼   ► weren't like I kind of said last week

◼   ► like your whole mindset of like how to

◼   ► pay for things has to change to some

◼   ► degree and your mindset about how much

◼   ► money you need to make also has to

◼   ► change because like your whole like if

◼   ► you've been only employed by other

◼   ► people until now your whole life up

◼   ► until now you've had a certain amount of

◼   ► money in your head is like what's like

◼   ► what's my salary or what's a good salary

◼   ► or what kind of salary do I quote need

◼   ► you know to maintain the lifestyle I

◼   ► want to maintain and you you still have

◼   ► to make those kind of calculations the

◼   ► numbers just have to be higher and it's

◼   ► not that like you know the idea of

◼   ► spending say two thousand dollars a

◼   ► month for family health insurance which

◼   ► is a reasonable number actually these

◼   ► days which is sad but you know the idea

◼   ► of spending $2,000 a month if you are

◼   ► getting paid and you know regular

◼   ► middle-class job that sounds insane like

◼   ► that sounds incredible why would anybody

◼   ► how can anybody pay that much but the

◼   ► answer is not thinking of it from the

◼   ► from the point of view of a payroll

◼   ► employee thinking about it as the point

◼   ► of view of somebody setting prices for a

◼   ► business to know like okay how much

◼   ► income you need every month do we need

◼   ► $8,000 a month of income to sustainment

◼   ► we need okay then that's the number like

◼   ► you know it's it's almost an any figure

◼   ► out how to do that you know you kind of

◼   ► backs off you start with what kind of

◼   ► income do I need to cover all this stuff

◼   ► and then you back solve to say okay how

◼   ► do I get there you know like a quick

◼   ► story here like when we first moved to

◼   ► New York we moved to a very nice suburb

◼   ► and I didn't know what the heck I was

◼   ► doing I moved to where my cousins lived

◼   ► because it was nice got an apartment

◼   ► there you know just renting and I looked

◼   ► around and you know TIFF and I were in

◼   ► our relationship and we wanted to you

◼   ► know get married and get and buy a house

◼   ► and we looked around the neighborhood we

◼   ► were living in which was a very very

◼   ► expensive neighborhood and all the

◼   ► houses were like a million dollars and

◼   ► so and sometimes even more than that for

◼   ► like a basic house so rather than do

◼   ► what we eventually did but just move

◼   ► somewhere cheaper I initially thought

◼   ► well I guess if a house is a million

◼   ► dollars I guess I have to figure out how

◼   ► to make a million dollars that like

◼   ► inform like salary negotiations all

◼   ► sorts of things until I eventually rose

◼   ► like I just moved somewhere cheaper but

◼   ► like for a while like that's that was

◼   ► the right way to look at it which is

◼   ► like all right well here's the

◼   ► environment I'm in I don't want to

◼   ► change the environment I'm in or

◼   ► the certain goal that I want to reach so

◼   ► rather than seeing it as this impossible

◼   ► thing that I could never do instead say

◼   ► alright this is what I need to reach

◼   ► that goal how do I get there like how do

◼   ► i how do i afford a house that cost that

◼   ► much you know and yeah and so when

◼   ► you're looking at a business you know

◼   ► you have to think like if the idea that

◼   ► I just said making eight thousand

◼   ► dollars a month has a minimum if that

◼   ► sounds crazy high to you

◼   ► backs off a little bit and instead so

◼   ► I'm thinking alright what could I do to

◼   ► make eight thousand dollars a month yeah

◼   ► so that it is just numbers like it's

◼   ► just that's why I love spreadsheets for

◼   ► this kind of stuff you just kind of work

◼   ► it out backwards and one of the side

◼   ► note too and a lot of these expenses is

◼   ► the one a nice thing about business

◼   ► expenses is that almost all of them are

◼   ► tax-deductible so it's also just need to

◼   ► keep in mind that the you know if health

◼   ► insurance costs you $2,000 a month

◼   ► it isn't $2,000 in the in the way that

◼   ► you would have had that money after

◼   ► paying taxes like theirs if you don't to

◼   ► go get carried away with like the

◼   ► discount that you're getting essentially

◼   ► by things being tax deductible but it is

◼   ► certainly something to keep in mind that

◼   ► a lot of these expenses are the raw

◼   ► number is much bigger than what it will

◼   ► actually end up costing you yes it's not

◼   ► for free

◼   ► but it is discounted it's like you

◼   ► getting your paying you get like

◼   ► one-third off you know all these a lot

◼   ► of these types of expenses but anyway so

◼   ► back to health care there's really two

◼   ► ways that you can get health care in the

◼   ► u.s. right now anyway there's two main

◼   ► ways that I think I've seen people use

◼   ► and I've to use both of these myself the

◼   ► first and this is often the easiest way

◼   ► when you're starting out is there's a

◼   ► it's called Cobra I don't know what that

◼   ► stands for but it's the essentially in

◼   ► the United States you your employer is

◼   ► obliged to allow you to continue on your

◼   ► previous group insurance plan premium

◼   ► for I think it's up to eighteen months

◼   ► after you leave it leave a job and

◼   ► basically you pay I think it's a hundred

◼   ► and two percent of the cost that you're

◼   ► the total cost that the employer was

◼   ► paying so whatever that actually is and

◼   ► you can just sort of keep whatever the

◼   ► insurance that you have now

◼   ► and this is a really useful thing even

◼   ► if you don't end up doing it in the

◼   ► early stages of kind of working out you

◼   ► know putting together your spreadsheet

◼   ► about what going independent is going to

◼   ► be like this is probably going to be

◼   ► your it's often going to be your

◼   ► cheapest version because group insurance

◼   ► is just cheaper than individual

◼   ► insurance

◼   ► well sometimes sure I mean not

◼   ► necessarily but if the very least it's a

◼   ► great baseline and it's a really easy

◼   ► baseline because the number of working

◼   ► out what your the cost of your current

◼   ► plan is is should be relatively

◼   ► straightforward to you in terms of your

◼   ► employer should be leather tell you that

◼   ► or it's on your payroll stub or whatever

◼   ► and you can look at that number and you

◼   ► can say well I can just keep my current

◼   ► insurance you know if you some you like

◼   ► it I suppose but like you can keep that

◼   ► and that should be able to get you going

◼   ► you can do it indefinitely

◼   ► you know it's free the first year year

◼   ► and a half or something but it's a good

◼   ► way to just kind of get started with

◼   ► this process and it has the least

◼   ► disruption to your family in the sense

◼   ► of you know your insurance just sort of

◼   ► stays the same it's you're just paying

◼   ► all of it yourself rather than sharing

◼   ► that expense with your employer and if

◼   ► that doesn't work or if that but for

◼   ► every reason you don't want that

◼   ► insurance the alternative is usually to

◼   ► go to one of the health care exchanges

◼   ► used to you previously it used to be I

◼   ► went to like a insurance broker and

◼   ► worked it out that way recently I just

◼   ► go to healthcare.gov like the Affordable

◼   ► Health Care Act insurance marketplace

◼   ► stuff and you kind of fill in a bunch of

◼   ► forms it takes the process takes a

◼   ► little while so if you're thinking about

◼   ► this process like you can this probably

◼   ► wise to go through that and just

◼   ► understand what all the things you're

◼   ► gonna have to do like you provide a lot

◼   ► of data and then you'll just you know be

◼   ► shown a variety of health plans and you

◼   ► can choose whichever one sort of fits

◼   ► your needs and your family's goals and

◼   ► you know it's depending on where you are

◼   ► in your life and your family life

◼   ► different plans might make sense and I

◼   ► will say it's kind of nice that I've

◼   ► been able to as since I've been

◼   ► self-employed I've been you know I was

◼   ► able to tailor my insurance based on you

◼   ► know life stage like when we were in the

◼   ► the phase of life when we were

◼   ► you know having children so having the

◼   ► process of having children in the u.s.

◼   ► is very expensive and so we had very

◼   ► good insurance during those periods and

◼   ► as we've transitioned out of that phase

◼   ► like I've been able to transition to

◼   ► slightly less robust insurance I guess

◼   ► I'll have good insurance but it's not

◼   ► quite to the degree it was before and it

◼   ► is kind of nice because it shows that

◼   ► but you know you go through the

◼   ► marketplaces and you'll get be given a

◼   ► whole variety of choices of different

◼   ► styles you know it's the large a lot of

◼   ► them end up being the high deductible

◼   ► style plans or you can there are still

◼   ► typically options for like the PPO copay

◼   ► version of it but you just kinda have to

◼   ► choose and decide make a plan and you'll

◼   ► you know tell you is it's just like is

◼   ► it's weird but it's kind of like just

◼   ► like you're just shopping for anything

◼   ► else online like you'll get a cost and

◼   ► you just start paying that to the

◼   ► insurance company yourself yeah it's

◼   ► it's way easier than it used to be like

◼   ► back in it with like when we had to go

◼   ► to brokers and everything and and you

◼   ► know not to get too political but like

◼   ► before the ACA there were a lot of

◼   ► there's a lot more things you had to

◼   ► worry about of like if you pick the

◼   ► wrong kind of plan or if you missed like

◼   ► some small print you might open yourself

◼   ► up to some major risks whereas with the

◼   ► ACA normalised a lot of that and it put

◼   ► it put in place a lot of like minimum

◼   ► guarantees of levels of coverage such

◼   ► that it's a lot less stressful than it

◼   ► ever was now to shop for health care

◼   ► yeah and so in that sense like you say

◼   ► decide what decide what plan works if it

◼   ► works for you and then you just buy it

◼   ► and now you have a number you just put

◼   ► that in your spreadsheet and move on and

◼   ► you know the big scary thing okay you

◼   ► know being self-employed is really hard

◼   ► to do you wouldn't because from a

◼   ► healthcare perspective like it isn't

◼   ► really it's it's it's expensive but it's

◼   ► it's not difficult we are sponsored once

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◼   ► this show so beyond health care there

◼   ► are probably a few kinds of insurance

◼   ► that you may need to think about these

◼   ► depend you may want to have some kind of

◼   ► professional liability or errors and

◼   ► omissions insurance it depends on the

◼   ► kind of work you do personally in my

◼   ► experience I haven't carried this type

◼   ► of insurance unless a contract requires

◼   ► it so sometimes you'll be you know doing

◼   ► a big consulting project and the people

◼   ► you're consulting with will one of the

◼   ► clauses in the contract is that they

◼   ► require that you cover perform have a

◼   ► professional liability insurance and so

◼   ► you may have to have that depending on

◼   ► your state you may need to have things

◼   ► like workman's compensation insurance or

◼   ► unemployment insurance usually those

◼   ► only kick in if you have employees that

◼   ► aren't yourself for yourself and your

◼   ► spouse or something like that but just

◼   ► good to keep in mind I highly suggest

◼   ► not doing that if you could help it it's

◼   ► having having any other full-time

◼   ► employees like not not just paying

◼   ► contractors here and there but if you

◼   ► have any of full-time employees it

◼   ► massively complicates a lot of these

◼   ► factors and I I did it very briefly I

◼   ► think you did too I would HIGHLY advise

◼   ► if if you can do your work with just

◼   ► yourself and occasional help from

◼   ► contractors do that and it certainly is

◼   ► one of the benefits of this type of work

◼   ► is that you probably won't need

◼   ► employees at least to start with in the

◼   ► sense of the work you're doing is just

◼   ► you know you and your laptop or you and

◼   ► your iMac you know working away you're

◼   ► not it's not like you need a production

◼   ► facility that you're like me

◼   ► gang widgets in and so hopefully you can

◼   ► avoid it or at least defer having

◼   ► employees for a while you also now may

◼   ► need to think about retirement types of

◼   ► investing like 401k or IRA type of stuff

◼   ► this is something that I mean you

◼   ► depends depends on how you view this

◼   ► type of thing you could potentially

◼   ► defer this for the you know the first

◼   ► couple years of being self-employed but

◼   ► that's up to you but either way it's not

◼   ► going to be something that your employer

◼   ► is providing anymore so it's some that

◼   ► you have to take care of yourself and if

◼   ► it's something that you would like to

◼   ► contribute to in your as you're setting

◼   ► up your business you know you have a lot

◼   ► of choices available to you I think the

◼   ► ones that most self employers would you

◼   ► is the simple IRA or a SEP IRA seem to

◼   ► be the two that you will likely take

◼   ► advantage of interestingly depending on

◼   ► your situation they may actually be able

◼   ► to consummate it but be able to

◼   ► contribute a lot more than you would

◼   ► have from a traditional 401k so

◼   ► something that could be a benefit to you

◼   ► but it's again it's just another line in

◼   ► your spreadsheet that you need to

◼   ► understand and you're gonna be setting

◼   ► up the plan yourself like you'll be

◼   ► going to you know a investment bank or

◼   ► you know Vanguard or somewhere like that

◼   ► and you'll be setting up the accounts

◼   ► and making the contributions yourself so

◼   ► that's just something you'll have to

◼   ► know now as with all the stuffs like now

◼   ► it's now that's your job now you have to

◼   ► take care of that and if setting that up

◼   ► is scary to you you know be thoughtful

◼   ► about if this really is for you well and

◼   ► also like you know you can also do

◼   ► things like hire a financial planner to

◼   ► talk you through a lot of this stuff

◼   ► especially when it comes to when it

◼   ► comes to things like long-term

◼   ► retirement savings and things like that

◼   ► that that often helps I'm sure you know

◼   ► whatever accountant you have for your

◼   ► business to do your taxes which you are

◼   ► definitely now doing that you know the

◼   ► accountant can probably give you some

◼   ► basic guidance on this as well to give

◼   ► you some idea of the much higher

◼   ► contributions a SEP IRA the limit this

◼   ► past year I believe was $54,000 that you

◼   ► could contribute total now there are

◼   ► some limitations on this so for instance

◼   ► first of all if you have employees that

◼   ► the whole thing that's messed up don't

◼   ► have employees but if you but but if you

◼   ► the I believe the limitation is it can

◼   ► be up to 25% of the business's income

◼   ► for the year so if you want to

◼   ► contribute

◼   ► to 4,000 you had to make like 200 and

◼   ► you know 12,000 whatever but anything

◼   ► you contribute to the Sepp I believe is

◼   ► either a tax deduction or a credit it's

◼   ► a it's a big advantage in your taxes so

◼   ► like these are things that you know any

◼   ► good accountant should tell you you

◼   ► should investigate you know if you have

◼   ► enough income coming in to a business

◼   ► where you where asset makes sense it can

◼   ► be a pretty substantial tax savings yeah

◼   ► and the other advantage to this just as

◼   ► a side note there is it's nice that you

◼   ► have more so much more control as with

◼   ► so many of these things over this and so

◼   ► it isn't the kind of thing where you

◼   ► have to like on January 1st decide

◼   ► what's your employee retirement

◼   ► contributions are gonna be for the year

◼   ► you have a bit more flexibility about

◼   ► when you do that about when you time

◼   ► that so if you have a great year and you

◼   ► get to the end of the year you know you

◼   ► can make it larger or attack the

◼   ► retirement contribution that year so

◼   ► that you can lower your tax liability if

◼   ► that makes sense like there's lots of

◼   ► cool things that you can do because you

◼   ► have flexibility because you're not just

◼   ► you know one of a thousand employees and

◼   ► so you you had you you actually have the

◼   ► ability to make these choices yeah also

◼   ► by the way if you didn't know about this

◼   ► stuff it is not too late to do this for

◼   ► this past year because you can

◼   ► contribute to at least a step I don't

◼   ► know what the other ones but you

◼   ► contribute to except I think up through

◼   ► up until tax day up until April or

◼   ► something so yeah so like you can do it

◼   ► for the previous year so so definitely

◼   ► like if you're into this for this year

◼   ► ask somebody about it ASAP because it

◼   ► isn't too late and but yeah it's these

◼   ► are things that you know again and you

◼   ► know which is with the control it's

◼   ► great because like if you had a not so

◼   ► good year you can either skip it and not

◼   ► contribute or you can contribute a

◼   ► smaller amount and you otherwise

◼   ► would've if you had a fantastic blowout

◼   ► year you can contribute as much as you

◼   ► possibly can you know it's it really

◼   ► puts everything in your hands just like

◼   ► much of self-employment yeah other

◼   ► expenses so you're to get into things

◼   ► that like just otherwise your employer

◼   ► would have typically covered for you so

◼   ► things like mileage to are from

◼   ► consulting clients potentially those

◼   ► type that type of thing or travel for

◼   ► work to conferences any educational

◼   ► expenses you may have so if you need to

◼   ► take a course or a certification or

◼   ► something like that for your for your

◼   ► work that's now like a you know a

◼   ► business expense and it'll in debate it

◼   ► deductible from your income

◼   ► as well as just something you need to

◼   ► take into account that if you know if

◼   ► your employer every year is sent you to

◼   ► WTC and took care of all the expenses

◼   ► that's now going to be you paying for

◼   ► that and so working out you know what

◼   ► that costs are associated with that

◼   ► whether that still makes sense you'll

◼   ► need to use by your own office supplies

◼   ► you know whether that is you know

◼   ► pencils and paper or if that's the

◼   ► business cards and letterhead like I

◼   ► mean depending what kind of business you

◼   ► have you may or may not need any of

◼   ► those but that's now something that

◼   ► you're gonna have to take care of

◼   ► yourself so you're gonna buy your own

◼   ► coffee for the breakroom yeah that's

◼   ► that's true they you can't you can't

◼   ► just mooch off their terrible's your

◼   ► coffee anymore

◼   ► oh I should get a water cooler installed

◼   ► on my office there you can I know you

◼   ► can have conversations with yourself

◼   ► there on a regular basis those are

◼   ► probably expensive can you get can you

◼   ► have a guy come and like bring those

◼   ► giant glass dude those giant jugs to it

◼   ► is that a thing you can do your house

◼   ► I'm sure if you paid for it they would

◼   ► be happy dude they would be happy to

◼   ► bring the giant five gallon drums into

◼   ► your house and set it up for you

◼   ► probably not very cost-effective and you

◼   ► just did a tap with a filter on it might

◼   ► be more effective or probably just a gas

◼   ► so you may you now be responsible for

◼   ► your own hardware in terms of your

◼   ► computer any testing devices that you

◼   ► now need in depending the kind of work

◼   ► you do you may want to have a collection

◼   ► of test devices that's now your

◼   ► responsibility to purchase probably also

◼   ► something just as it's always a good

◼   ► idea but I was going to mention it in

◼   ► this kind of topic is make sure you also

◼   ► like your fun of your first purchases it

◼   ► was probably gonna beat if you don't

◼   ► have it already like a good backup hard

◼   ► drive because suddenly now you are

◼   ► personally responsible for you know your

◼   ► work like if you somehow your hard drive

◼   ► you know your computer dies and you

◼   ► suddenly don't have that project that

◼   ► your your client has been paying you for

◼   ► six months to build like that is a

◼   ► tremendous problem so you need to make

◼   ► sure you have a very good back of

◼   ► situation both in terms of physically

◼   ► like having a like I do a daily mirror

◼   ► of my main machine in addition to a

◼   ► variety of cloud backups but like that's

◼   ► an it's a hardware expense that you may

◼   ► need to

◼   ► to factor in a really good chair sure if

◼   ► you sit in a chair for two hours a night

◼   ► after you come back from work that has a

◼   ► very different needs and if you're

◼   ► sitting on one for eight hours a day

◼   ► yeah yep you'll have a variety of kind

◼   ► of home office things like and all say

◼   ► don't go no necessarily go crazy right

◼   ► away it's it's like we as if you listen

◼   ► to us talk for long enough you

◼   ► understand we take these things very

◼   ► curiously like having good good

◼   ► ergonomics make sure you have a keyboard

◼   ► and a mouse and things that work but but

◼   ► like if it's gonna be hard to get

◼   ► started like you know you could these

◼   ► are the kind of things they can be nice

◼   ► goals for you know buying at the end of

◼   ► the year if the year goes well these are

◼   ► like Cydia things that you can certainly

◼   ► you don't need to do these right away in

◼   ► the same way like I fur my fur to start

◼   ► with like I didn't have that great of a

◼   ► laptop or that great of a computer I

◼   ► just made it work you know you may not

◼   ► necessarily go out and buy a

◼   ► top-of-the-line iMac pro on your first

◼   ► day of starting your new business like

◼   ► yeah that's a terrible idea

◼   ► that's probably unnecessary like you can

◼   ► kind of get started with what you have

◼   ► and then grow and develop as you may

◼   ► have need you're also going to probably

◼   ► have to buy some software like things

◼   ► that your employer may have previously

◼   ► provided like if you use Photoshop or

◼   ► illustrator or transmitted or tower-like

◼   ► any of the kind of utilities and tools

◼   ► that are just a part and parcel of you

◼   ► know B being an iOS developer you are

◼   ► gonna need to now pay for those yourself

◼   ► similarly you'll have a bunch of certain

◼   ► online services that you're gonna pay

◼   ► like I you know I have accounts with

◼   ► Dropbox you may have things with github

◼   ► or Linode for hosting you have some a

◼   ► havoc an account to something like fresh

◼   ► books or QuickBooks you may probably few

◼   ► have any kind of web servers you'll

◼   ► probably have a count to like Kingdom or

◼   ► hover you may be doing backups with

◼   ► Backblaze like you're gonna be a variety

◼   ► of these kind of services and well any

◼   ► one of them individually is may not be

◼   ► that expensive in aggregate you know

◼   ► they're not an insubstantial part of

◼   ► your expenses so make sure you have them

◼   ► in the spreadsheet and know what they're

◼   ► you know what what that what kind of

◼   ► expenses you're gonna have to to manage

◼   ► with that are also make sure that the

◼   ► licenses or the service plans that you

◼   ► are getting for things allow business

◼   ► use most of the things we've mentioned

◼   ► it's the same no matter what you use

◼   ► for but there are occasional services or

◼   ► some or some software packages where

◼   ► like if you're using it for business use

◼   ► you're required to pay more to be

◼   ► compliant with a license yeah it's just

◼   ► good advice in general yeah it's pretty

◼   ► rare but but those do still exist sure

◼   ► early you know make sure that you're

◼   ► being up above board with all of these

◼   ► these types of things exactly like you

◼   ► hear like this is not a place to like

◼   ► pirate your copy of Photoshop like you

◼   ► can't no you can't do that with your

◼   ► business stuff because suddenly you're

◼   ► the liability that you're putting

◼   ► yourself under and your clients under

◼   ► and things suddenly become very

◼   ► problematic so like in general good

◼   ► advice like be above boards like

◼   ► understand that this is a business

◼   ► treated as such

◼   ► and if you've factored these costs

◼   ► incorrectly into your you know into your

◼   ► spreadsheet into your expenses like it

◼   ► shouldn't be a problem in that regard

◼   ► and so it should be fine and then by the

◼   ► last area to think about is professional

◼   ► services so you're like we've talked

◼   ► about many times you Vega need to have

◼   ► either a lawyer in an accountant or just

◼   ► an accountant or some kind of in terms

◼   ► of some type of professional advice on

◼   ► the financial side you may also need to

◼   ► periodically hire a graphic designer not

◼   ► entire as an employer but just hire in

◼   ► terms of do some consulting for you if

◼   ► you need even even icon the icons for

◼   ► your apps or an icon for your business

◼   ► if you think that's important or

◼   ► whatever like these are kind of

◼   ► professional services that you're going

◼   ► to need to suddenly start paying for

◼   ► that you just need to keep into mind and

◼   ► they're not typically crazy expensive

◼   ► it's just an expense that needs to have

◼   ► its I have a have a line item and be

◼   ► considered as you're going into this

◼   ► with your eyes open this all sounds like

◼   ► a lot and it is a lot when you when

◼   ► you've never done it before but you know

◼   ► it's not that different from like the

◼   ► transition from renting the place you

◼   ► live to owning a place that you live or

◼   ► the transition into being becoming a

◼   ► parent if you've done that like it's

◼   ► it's a thing where like you might not

◼   ► beforehand you might not have fully

◼   ► appreciated like all the things that

◼   ► were needed that were being done for you

◼   ► or that you that weren't necessary to do

◼   ► that now you have to do but millions of

◼   ► people do this millions of people have

◼   ► figured this out before you many of them

◼   ► you are smarter than

◼   ► it's it has a lot more to do with

◼   ► experience with these things than it has

◼   ► to do with skill or intelligence or

◼   ► anything else like if you want to tackle

◼   ► this you probably can yeah and we'll say

◼   ► - it's probably just a good indication

◼   ► of whether you should that like if the

◼   ► if the thought of starting this process

◼   ► is completely overwhelming and you just

◼   ► can't handle it maybe being a regular

◼   ► employee is for you but if you can get

◼   ► over that like obviously we both

◼   ► recommend it we both like this lifestyle

◼   ► but it's a probably a good litmus test

◼   ► for doesn't this make sense for me that

◼   ► if the last you know this episode in the

◼   ► previous one is just like totally blown

◼   ► your mind then like okay maybe it's not

◼   ► for you and that's okay like this is

◼   ► like neither one is like the right one

◼   ► the right choice for you but you just

◼   ► have to it's a good thing to understand

◼   ► that these are these are the things that

◼   ► you're gonna have to take care of if you

◼   ► go down this road Thanks listening and

◼   ► we'll talk to you next week bye