Key financial considerations for aspiring full-time content creators

I am a 32-year-old software engineer with a passion for content creation. I am considering a shift as a full-time YouTuber. I have ₹20 lakh in mutual funds, ₹10 lakh in a fixed deposit, and an emergency fund covering six months of expenses. My current annual income is ₹18 lakh, with monthly expenses of around ₹82,000. How can I financially plan this transition to minimise the impact on my finances? What steps should I take to ensure stability while building my new career? Should I consider part-time work or freelance projects to supplement my income during this period?

—Name withheld on request

The transition from a salaried employee to an entrepreneur always raises many questions, some of which you’ve already highlighted in your query.

Multiple financial factors need consideration when you are making this move, considering that each business has specific capital requirements, and it's crucial to ensure that you have adequate capital to make this transition.

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Along with this, your business may take some time to generate reasonable revenues as well. During this stage, you can try to ensure that your monthly expenses towards business and household needs are in place for a particular period before you finally take the step. 

The transition could take one to two years or longer, depending on your business plan and progress. It’s good to see that you have a contingency fund covering six months of expenses, as this will be helpful.

While pursuing a full-time content creation career may not require substantial capital, you should plan for the possibility that revenue generation might take longer than expected. In such cases, you may need to rely on the assets you’ve accumulated for a period of time.

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It's always wise to prepare for such situations. Within your current expenses, identify mandatory versus leisure spending, and consider reducing non-essential expenses temporarily.

Your current assets are liquid, which can be useful for your business or personal needs. Taking up part-time or freelance work is subjective, and depends on the time commitment you can take up for your own business, and the assignments you take up. 

Some businesses require undivided time and attention to stay focussed. If your content creation efforts allow you to take on additional assignments, you may consider exploring those opportunities as well.

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For success in either case, you'll need to commit your time and skills to achieve the best results. Wishing you all the best for your future venture.

—Harshad Chetanwala is co-founder at MyWealthGrowth.com