Should I pay down student loan debt or start a business?
Hi, I am 32 years old and have student loan debt of $100,000 and I make $70,000 per year. I have about $30,000 in retirement investments, with no other debts. I am married, no kids, but looking to have kids in the next year or two. I wanted start a business so I can work from home as a mother. Is it wise to leave my day job with so much debt? My husband makes about $65,000 per year, we have free health insurance, and the only debt he has is the mortgage.
As a professor of entrepreneurship, I'm in favor of you starting the business, especially since you have the desire to be able to work from home as a mother. Your financial plan should be developed to support your life goals, rather than having your life goals altered based on your financial plan. Based on your incomes, your student loan debt is very reasonable, especially since you have no other debts besides a mortgage. You two are in a great financial position to build on.
When you start the business, I would not recommend quitting your job. Begin by starting a small version of the business now while keeping your job, even if it means you can only devote a few hours per week to the business. There is a lot you can accomplish in beginning a business in just a few hours per week. And if your husband is also involved in the business, the time you spend can double as time you spend together and engaged with each other.
This will allow you a couple of years to build the business slowly before you start a family, while also avoiding the stress of losing your main income. When you do get pregnant, you will also have a better idea of the time commitment and potential of your business. If you have paid maternity leave, this can also help with your transition to both motherhood and a full-time business owner. This strategy would be preferable to being pregnant (or having a newborn) and then taking on the stress of starting a business.
I started my financial planning business right around the time my wife and I had our first child, and I can attest to the fact it isn't an easy thing to do. Fortunately, I was able to keep my job as a tenured professor. This allowed me to grow my business slowly over time, and not add the additional stress of needing the business to produce significant income.
I have a private Facebook group I started for my former entrepreneurship students to ask questions as they build their businesses. Feel free to join. facebook.com/groups/BootstrapEntrepreneur/