Certain circumstances are compelling me to leave early retirement. I’ve barely scratched the surface and am considering a one year contract. I received the dreaded phone call from my previous employer while we were visiting the Atlanta Aquarium last Wednesday. There is a major divestiture underway and the person who I transitioned my work to resigned from the company last week.
Before I left, I was an IT Director of Solution Architecture for a fortune 20 company. I hold unique insights as to how these systems should be bifurcated for the divestiture. There will be a major IT consulting company engaged, but they will stumble due to the business complexities. Anyway, the program manager responsible for the project called me to see if I would subcontract.
Starting my own consulting company has been a dream for a long time. This would be an ideal way to get started. However, this was my dream years ago and I never pursued it. I am not sure if the dream fits our family plans at the moment. Not to mention the going back to a high stress lifestyle is unappealing. Will I regret not taking the chance to start my own consulting company?
The entire purpose of me leaving was to enable our family with more time for adventures. This would derail those plans, temporarily.
Terms I Laid Out
They wanted a systems architect to be engaged with the project full time. Full time on these types of projects usually run somewhere between 40 and 80 hours a week. I told the program manager I would be willing to do 20 hours. 30 hours max per week. After two days she came back and accepted.
She wants to know when I will start and what my rate will be. I think I could easily fetch somewhere around $125 to $150 an hour. Assuming I work an average of 25 hours per week I could charge $156,250 to $187,500 over the year. That is good money for working 25 hours per week. If I really wanted to I could do 40 hours and get $250,000 to $300,000. I don’t think it is worth going back to work full time, even if I am my own boss.
Positives to the New Worth
- Additional consulting income stream.
- Starting a business will enable us to deduct some business expenses not currently available. Cell phone, lunches with clients and the office in our home will constitute business expenses.
- We could defer a portion of the income into a SEP IRA.
- My understanding is that if I create an S Corp we can save on self employment taxes.
Negatives to the Net Worth
- CPA & Attorney Fee’s to create the corporation
- Errors and Omissions Insurance
- Additional tax liability
- Miscellaneous start up expenses