

Student loans vs. entrepreneurship  - fmd
http://blog.flushmydebt.com/student-loans-versus-entrepreneurship

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OldSchool
A few ideas since nobody's responded yet...

7 years isn't very long as an adult. It's going to pass in exactly seven
years. If it were me, I'd consider it just another cost like rent. Live with
roommates longer I guess.

Work a year or two in a big megacorp where you have to have a badge to get in.
Save some money and gain infinite motivation to succeed on your own. Take
mental pictures of where you'll never go back. I don't think I'd use the extra
money to pay down the loans faster - you need liquidity if you're going to go
out on your own. Get some credit cards during this time too. Also, then you're
no longer fresh out of school, you're from megacorp!

Don't worry as much about investors. This whole thing has been hyped into some
kind of audition process. If you get investors they will be your boss.
Bootstrap while you're working at megacorp and by contracting later.

Don't try to create a new market. You (and I) can't afford to do that.

Finally, you must have a trustworthy non-technical partner in the mix. A biz-
dev/sales person. Coders and designers are not people people.

~~~
fmd
Thanks for the response. I definitely could take some measures, including
cheaper rent, to decrease expenses. I've thought about moving back in with the
parents, as well, to be rent-free.

I've been out of school since May 2010 and I have been employed for the
majority of that time since then.

The problem that I noted in the post with stockpiling cash is that I can
quantify exactly how much I am losing by saving up rather than spending the
money on loans. Furthermore, I made the decision to contribute to retirement
first because 8% (average stock market annual returns) in the long run (30+
years) is better than 7.4% (fixed loan-rate returns) in 7 years. So, I have
this battle between long term net worth optimization and my yearning to start
a business.

I haven't thought about contracting. How does one break into being a
contractor? I've searched before and it amounted to competing with others on
elance.com or doing work for free until someone can recommend your work to get
paid for it.

~~~
OldSchool
Yeah, elance.com would be tough. You're competing against people in other
countries who will work for almost nothing. The best opportunities would be
likely to come through people you know.

My opinion on 401K's is that if your employer does matching, contribute enough
to get the full match. That's instant profit. Always contributing something is
also a good habit to have.

One thing's for sure, you'll probably never have more time, lower overhead, or
more drive to start a business than now. I don't understand the whole hard-
driving 40-something starting entrepreneur stereotype. If you have a family
then, there aren't enough hours in the day to be great at both.

For business, all I can suggest is find something that's already making people
money, that's not dominated by big players and do it. Doing what you agreed to
do and just generally showing up will put you ahead of many of your otherwise
peers.

I'd worry less about the student loan thing - if you own a successful, yet
still completely non-famous business you can bank that number in a month or
even a week. Not all businesses succeed of course, but I always say "be dumb
enough to try and smart enough to make it happen."

I anguished over my negative net worth in my twenties. Don't read the Yahoo or
other finance page articles, they'll make you feel like crap. Net Worth !=
Self Worth. If you eliminate risk too early in life you'll never get a chance
to take advantage of opportunities that will inevitably present themselves.
Give it time.

Thanks for listening. You'll do well for yourself.

