Warchest Advice with loan?

**northernladuk** · 2 August 2017, 21:58

Get a warchest and then jump in IMO. Going in with no warchest is bad enough but with a loan hanging over you as well.

You are going to be even more skint in your first 6 months as your main focus is your warchest in case the 2nd gig doesn't come quick. Not sure how you are going to do that while having to pay off a loan.

Very risky situation you are in.

EDIT : I'm not overly keen on the comment about going contracting is going to change your lives around for the better. It might but it's not a given, particularly at this moment in time.

**codedaddy** · 2 August 2017, 22:12

Thanks for your advice. One of those hard decisions.

I know contracting won't be easy but I feel it will improve our lives financially and allow me to get my finances in order sooner than staying perm.

[emoji20] if only I could pick the winning numbers.

**codedaddy** · 2 August 2017, 22:14

Do you say this because of my situation or the current state of contracting market?

**northernladuk** · 2 August 2017, 22:30

Originally posted by codedaddy View Post

Do you say this because of my situation or the current state of contracting market?

Both. No warchest and a loan means you can only afford for the first few gigs to go your way and the market isn't exactly fantastic at the moment. You are a newbie as well so up against a lot of experienced guys.

This thread might give you an idea. Prepare for a long read though.
http://forums.contractoruk.com/busin...te-market.html

Lots of factors will affect your chances though, skill set, years experience, location, willingness to work away yadda yadda.

Wait until tomorrow and see what the others say.

**codedaddy** · 2 August 2017, 22:53

Thanks I'll read that tomorrow.

**fatJock** · 2 August 2017, 23:40

As a new contractor I'd reinforce the warchest advice.

Please don't take the leap unless you have six months cash behind you especially if you are coming from perm - more flexibility if you've had a redundancy cheque.

Ignore the cast iron contract guarantees from agents. Contracting can still be more lucrative but you have to be shrewd and prepared.

Genuinely, good luck but make sure your eyes are open before you leap.

**FrontEnder** · 3 August 2017, 08:19

Originally posted by fatJock View Post

Please don't take the leap unless you have six months cash behind you especially if you are coming from perm - more flexibility if you've had a redundancy cheque.

I disagree with blanket advice like this. It depends entirely on your own circumstances. If you have kids and the wife doesn't work full time, then of course something like 6 months worth of money would be sound advice. Depending on your own appetite for risk, 6 months might not be enough.

If you could live off your partners wages alone indefinitely (quite possible if you don't have kids) then you might not need one at all. Of course whether they are happy to support you during this time is another matter.

A loan, however, sounds like a terrible idea.

**Cirrus** · 3 August 2017, 08:29

Warchests are nice but a luxury

Originally posted by codedaddy View Post

My question is, should I extend a loan I have to keep me afloat whilst I get my first contract?

Personally I can't see any reason why you would leave a permanent job before you had lined up a contract. When I started, I had few offers before I could get one to neatly fit with leaving my permanent job (and trousering a shed load of redundancy). People fret about notice period but WGAS.

Once you are contracting, you are in a way, in business. It's normal for businesses to live off loans of various types, so if you've got one already then keep it on. I took one out in a long down stretch (2002-2003). Get a second mortgage if necessary. You need liquidity.

**northernladuk** · 3 August 2017, 08:29

Originally posted by FrontEnder View Post

I disagree with blanket advice like this. It depends entirely on your own circumstances. If you have kids and the wife doesn't work full time, then of course something like 6 months worth of money would be sound advice. Depending on your own appetite for risk, 6 months might not be enough.

If you could live off your partners wages alone indefinitely (quite possible if you don't have kids) then you might not need one at all. Of course whether they are happy to support you during this time is another matter.

A loan, however, sounds like a terrible idea.

I'd agree with the above. Most of us wouldn't have gone contracting if a 6 month warchest was the minimum.

Warchest Advice with loan?