Freedom Number Exit Rule
Build side income to your costs before choosing whether to resign
- Difficulty
- Moderate
- Time to result
- ~months to results
- Steps
- 5
- Confidence
- 98%
The freedom number is the amount of business income required to cover the costs that make leaving employment feel viable. Calculate those costs, name the threshold, and keep the salary while building the business toward it. The speakers stress that most ordinary jobs do not consume every available hour or prohibit a side business, while early growth is usually slow. Keeping employment prevents the new venture from being forced to produce immediate income. That matters because depending on it too early encourages decisions that prioritize cash now over the long-term trajectory. Once the business reaches the freedom number, the employee can choose to leave while maintaining income, or stay and receive both salary and business income. Either branch improves the financial position.
Origin
A guest cites Jim Wendler's advice not to make a new venture the immediate income source, then describes the group's freedom-number rule.
Core principles
- 01Know the income required to cover your life
- 02Keep employment while the business grows slowly
- 03Do not force a young business to provide immediate income
- 04Leave only after the business reaches the chosen threshold
- 05Reaching the threshold creates a choice rather than an emergency
How to run it
- 1
Calculate costs
Write down the recurring amount required to maintain your current obligations.
Pro tip Use real monthly costs rather than an aspirational salary.
Watch out A vague threshold cannot guide an exit decision.
- 2
Set the freedom number
Choose the income level at which you could leave employment if you wanted to.
Pro tip Treat it as a decision threshold, not a promise that you must resign.
- 3
Build alongside the job
Use available time to start and grow the business while retaining salary where the job permits it.
Pro tip Concentrate on genuinely revenue-generating activity.
Watch out More hours do not automatically make a business grow faster.
- 4
Protect the long term
Avoid making the venture responsible for immediate living costs before it is ready.
Pro tip Use salary to reduce pressure for short-term monetization.
Watch out Needing cash now can distort decisions away from the business's long-term trajectory.
- 5
Choose at the threshold
When business income reaches the freedom number, decide whether to leave or retain both income streams.
Watch out Reaching the number creates an option; it does not remove every non-financial risk.
In the wild
The speakers describe an employee using the time outside a normal job to grow a business through its slow first years. The employee waits until the venture reaches the income required to cover costs before deciding whether to leave.
→ The person can either replace the salary and resign or keep both income streams.
Common mistakes
Quitting before revenue is ready
Removing salary too early makes a slowly growing venture responsible for immediate living costs.
Optimizing only for cash now
Immediate income pressure can produce choices that damage the long-term direction of the business.
Treating time as the only constraint
Working full-time on a venture does not guarantee faster growth when demand or revenue-generating activity is the real limit.
Is it for you?
Best for
It is best for employees who can build a business without their existing job prohibiting the work.
Not ideal for
It is not ideal when employment contracts prohibit the venture or the job leaves no practical capacity to test it.
From the transcript
“when you're starting just don't do it for income don't do it to be your income source”
“have your freedom number the number that you the aromatase to get to you feel like right I could leave if I wanted to”
“build your business to that point and then either you've doubled your income or great you can leave and maintain your also great like zero…”
From the episode
Should I Work For Myself? - Business Principles 102 - #106
Business Principles 102