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Since I quit my full-time job about a month ago, I’ve had quite a few people ask me how I prepared myself to make the transition to being self-employed and working from home.
I want to make two points about the personal finance aspect of making this move:

1. Debt creates stress that clogs your creativity and creates a need for income that your fledgling web business may not be able to realistically provide. So before you try to quit your job, work yourself into a solid internet income and use it to pay down your non-mortgage debts.

Not only will you experience a huge effective increase in your income (as that money is no longer going to your creditors), you will feel a big boost in your confidence and creativity because you won’t have the burden of debt weighing on your mind.

2. Get a sense for exactly how much money you need to reasonably earn to maintain your lifestyle. I don’t believe it’s realistic to say you’re going to change years of spending habits when you become self-employed. Look at how much you’re currently spending, try to trim the excess where possible, and then set your income goal equal to your current lifestyle. Trying to figure out entrepreneurship while simultaneously trying to adjust to a significantly reduced lifestyle will do nothing but frustrate and discourage you.

Now, about the work of being a full-time internet entrepreneur:

1. Find Your Best Method For Making Money Online

When you quit your job it’s not time to learn what will work. It’s time to scale up the effort you’ve already been investing in a system that is producing results. It doesn’t matter whether that’s Keyword Sniping, BANS, consulting, or freelance work.

Any of those could give you the full-time income you need to stay job-free. But you need to have momentum and success behind you before you expect any of those methods to sustain you as a full-timer. An extension of this advice is that your chosen method has to be one that will reasonably scale up to a level that will pay you what you need to live.

Let’s say you right now you have an internet income of $200 per month, and it takes you 15 hours per month to maintain that income. If your monthly income requirement is $4000, you’ll have to increase your current income 20x. If you can’t introduce some new efficiencies into your business, you’ll need to invest 300 hours per month (or about 75 per week) to make that $4000 per month.

That’s probably not realistic. So make sure you can grow your income to the level you need without having to put in outrageous work-weeks. Hundred hour weeks aren’t bad if a few of them create a more passive income. But if you’re not seeing your income grow as your work hours decrease, you need to improve your money-making methods.

2. Develop the Discipline Necessary to Work At Home Full Time.

If you want to prepare to quit your job and work from home on the internet, you have to start thinking of your home as the place you work. You will have no boss other than yourself, so you have to require yourself to complete tasks.

For me the toughest part of entrepreneurship is imposing deadlines on myself. But if you can say “I will not let today pass without accomplishing x,y, and z” you are really setting yourself up to succeed. I’m working at this one every day, because I still often let myself push things off until ‘tomorrow’. The real danger of that is you can’t have today back. Once time is gone, that’s it. If you have real goals and no boss to force you to complete the necessary tasks, you have to develop the ability to complete the work - today.

3. Consume 90% Less Information

I’m going to confess something here, and I hope it doesn’t ruin our business. I don’t use an RSS feed reader. Why? Because I only read two or three blogs. I read everything Court says, I check in on SEOBook once or twice a week, and sometimes I pop over to Blogger Unleashed to see what Vic is up to. I read Grizz’s site whenever he posts, which isn’t often.

I don’t read many blogs because it’s not the way to get the highest ROI on my time. Since I have found my method for making money online, I spend my time working my method and I ignore 99% of what’s being said in the blogosphere.

There is good information out there; I’m just ignoring it because I can’t afford to be distracted. As my income settles in and becomes lower maintenance, I think I might start some BANS sites. Until then, I’m just going to do my thing.

I know many of you are on information overload, and I completely understand. That’s why I’m saying you have to work one method until it yields a result, then keep working it until you hit your goal, then start looking for additional methods. You should read only as much information as is necessary to hit that first income goal.

I really don’t believe subscribing to 50, or even 10 blogs in a reader is necessary. Find your mentor, do whatever she/he says, and ignore everybody else until you’ve reached that first goal. If your mentor is on this site - great. Spend 10 minutes a day reading this site and the rest of your work time building content and links so you can increase your income.

If your primary mentor is not on this site, I suppose you’d have to leave us for a few months until you hit your first income goal. See you when you get back.

(original article)