This is a question many new investors ask. I have done it many times too. This of course must be answered individually, however below are some things to consider before taking that much desired step as an investor.

My first year I used the earnings from my job to earn money to build my business. Prudent investors do not open a business without regular cash flow or reserves of 3-6 months. Disclaimer: Steve Cook did, but most of us may not be the next Steve Cook to invest, geez anyway! For the rest of us, this article may help.

How do we know what a prudent reserve is? We have not run this type of business before, therefore the costs are unknown! Well, some of these expenses are: car signs, gas, business cards, newspapers and Nifty Nickel ads, plus gas, tires, lunches, investor networking, security money, computers, printers, did I mention gas, desks, paper, ink, padlock? boxes, small tools, more ads, high speed cable, stamps, investor club dues, course fees, boot camp dues, copies and bandit signs.

Keeping the full-time job helps pay for these invisible and unknown expenses for a while.

That’s only the first year of business, starting the second year new expenses behind that ugly head. CPA, attorney fees, bigger printers, the second computer so you can take your laptop with you and make up properties on the spot, and if one fails, it’s still functional. Now, the long-term investor will buy computer programs, the Microsoft Small Business package with Outlook Express, Excel and Word, that will make your business efficient, thus saving your most precious asset: your time. Virus protection is a must, there’s fifty bucks. No one can do what you do as well as you and that is finding the deals. So better equipment and software will help free you up to do what you do best.

You say “wait a minute, I’m not a computer guru” I wasn’t either, which is why I hired one! Once you have computers, you have computer problems! Another invisible but real expense. This is long term thinking.

Hiring services in the second year is essential for time management, but you can because now you are earning money by investing and you have a job to pay the expenses. This exponentially increases the success of your business. It can help, every 4 months, to cut one day a week from your job.

Now I’m making a lot of money, so it’s time to tell the boss “take that job and forget it.” Maybe, maybe not, February and March can be very slow months, but the bills keep coming like clockwork.

Then there are the expenses that, being new, are incurred simply because you don’t know any better and buy things you don’t need or find you can get them cheaper elsewhere. Yes, that was the voice of the experience speaking. LOL!

Health insurance is a must-have expense, no one expects a hospital visit, but it can ruin your finances, so the long-term investor will factor it into your monthly expenses.

Credit is always an excellent investment in our business. To maintain good credit, monthly bills must be paid on time. Which won’t happen waiting for a deal to close that you didn’t expect to have liens on, or a lien on even after title verification, or any other hidden issue we’re not aware of, why? a new investor. A year or two in business will uncover many of these hidden expenses.

Hopefully this has given you some ideals on whether or not it’s time to go full time. I have become conservative over the years; I have felt the pain of bad decision making, not fun. So now, if I must err, I will err on the side of safety.

I have seen people go in and out of this business because they tried to work full time too quickly. It’s okay to keep working until it’s ridiculous to continue, oh, and in case you were wondering… I’m still working two days a week, since March 2004.

Update: I have been a full time investor since January 2005