|
||
|
CAREER DR PLAN
// CAREER_INSURANCE_FOR_ENGINEERS
|
||
|
TLDR: Buy vs. Build: the math on both. Storage facility: $22,500 in, $450/month, $150K current value. Deal Desk: the buy box is locked. Here's where I landed. |
|
// DEAL_DESK
ACTIVE
Two updates this week. Both moved in a direction that changes how I’m thinking about the search.
On vending: What started as listing research turned into actual conversations with vending machine manufacturers, specifically in the smart vending space, and those conversations shifted how I’m thinking about the model.
One thing I didn’t know going in: some manufacturers will run a perimeter search around your home base and produce a list of businesses and locations that score well for vending traffic. You tell them your geography, they give you a prioritized target list. That changes the location-sourcing problem significantly.
@anthonyvending on X is the most followed builder in the space and I’ve had some direct back-and-forth with him — his build is one of ten vending case studies I’ve pulled together. The pattern across almost all of them was the same: too much time and capital upfront buying used machines, not enough time finding ideal placements.
The operators who got it right share two decisions: buy new machines with digital payment capability from the start, and treat location selection as the primary job. Once location and equipment are right, the rest can be systematized or outsourced.
|
On the buy box: The criteria tightening I mentioned last issue is more resolved than I let on. Here’s where I’ve landed.
|
// THE_BUY_BOX
Commercial cleaning + vending. Ideally the same locations.
A commercial cleaning company builds recurring relationships with businesses: offices, medical facilities, industrial spaces. Those same locations are exactly the foot-traffic environments that support vending machines. One relationship, two revenue streams. The cleaning contract opens the door; the vending placement runs in the background.
The leverage point is that the location relationships developed through cleaning create a distribution advantage for vending that a standalone vending operator has to build from scratch.
Still evaluating whether to pursue cleaning as an acquisition or build the vending side first. But the strategic logic is solid enough that both searches are now running against the same location criteria.
|
Still looking. Still learning. The search gets more specific every week.
| // BUY_VS_BUILD |
Buy vs. Build: The Math on Both
Last issue covered the two paths senior engineers are using to build income outside their W2: buying a cash-flowing business, or building a community and content operation. Both share the same core property: they can be running before the primary system goes down. The question your situation requires is which one actually fits you, and the answer depends on numbers most people don’t bother to calculate before choosing.
|
// NOT_FINANCIAL_ADVICE — I’m not a financial advisor and nothing here is financial advice. These are illustrative figures based on my own research and conversations with brokers and operators. They’re a starting point for your own thinking, not a recommendation. Talk to a professional before making any financial decisions.
|
Start with the number that makes the comparison possible.
Your Freedom Number
Before you can compare two paths, you need a target. The Freedom Number is that target: the monthly cashflow your backup income system needs to hit before your W2 becomes a choice instead of a requirement.
Take your monthly essential expenses, not your current lifestyle spend but your actual floor, starting with housing, utilities, food, insurance, and debt minimums. Subtract any income you already generate outside your W2. Multiply what’s left by 1.5.
That’s your number. The 1.5 multiplier accounts for variability in non-W2 income. A business has good months and slow months. A newsletter has issues that hit and issues that land quietly. Operating at the edge of your coverage with no buffer trades one kind of stress for another. The multiplier builds in a meaningful cushion without being so conservative that the number becomes demoralizing.
Most senior engineers I’ve talked to land somewhere between $8,000 and $15,000 per month when they run this. The Career Insurance Calculator at careerdrplan.com/calculator does it in four minutes if you want your actual number before reading further.
The Buy Track: What the Math Actually Says
An existing cash-flowing business acquired through SBA financing puts you in a different position than most people expect when they first look at it seriously.
| // ILLUSTRATIVE SBA DEAL STRUCTURE | |
| SDE | $300,000 |
| Multiple | 2.75x |
| Purchase price | ~$825,000 |
| Down payment (10%) | $82,500 |
| Working capital reserve | $30,000 |
| Closing costs (est., varies) | ~$35,000 |
| All-in to close | ~$150,000 |
After debt service on the SBA loan, owner earnings on a deal structured that way typically run $80,000 to $120,000 annually, roughly $7,000 to $10,000 per month. Depending on your Freedom Number, that’s meaningful coverage. For some engineers it’s close to full replacement. For others it’s 60 to 70 percent of it.
The timing is the real argument for the Buy Track. Day one of ownership is day one of cashflow. The customers exist, the revenue is running, the systems are already in place. The ramp time between capital deployed and income generated is compressed significantly compared to starting anything from scratch.
The honest constraints are capital and time. You need around $150,000 deployable to run this path seriously. Most engineers have more deployable capital than they think. More on that in a future issue. The time constraint is equally real: running an acquisition search while employed takes 10 to 15 hours a week. Due diligence on a real deal takes more. And operating a business, even one that already runs smoothly, takes ongoing attention. This is not a passive play.
The Build Track: The Slower Clock
You can start a newsletter this week for zero dollars. The capital requirement is almost nonexistent.
The timeline is the honest constraint. Meaningful recurring income from a content business is 12 to 24 months out from a genuine start, and that’s with consistent publishing, active distribution work, and a content strategy that compounds rather than resets every week. I want to be direct about this because the 12-to-24-month figure gets softened in a lot of content-business advice, and the softening does real damage. People start without understanding the timeline, hit month four without significant revenue, and quit right before the compounding would have kicked in.
There’s an upside the capital comparison misses entirely. You own the asset completely. No debt service, no seller financing, no lender. What you build accumulates as equity and infrastructure simultaneously. A newsletter list of 10,000 engaged subscribers is an asset. A community of 500 paying members is a business. Those things compound in ways an acquired business doesn’t, because the trust that makes them valuable keeps growing as long as you keep publishing.
The income ceiling is different too. An acquired business generates what it generates, adjusted for operational improvements you make. A content business has no structural ceiling in the same way. A well-executed newsletter can realistically generate $5,000 to $25,000 a month depending on how the monetization stack develops.
This newsletter is three issues old. The clock started when I published the first one.
Which One Fits You
The framework runs on two variables: capital and urgency.
If you have $150,000 or more deployable and your employment situation feels uncertain, the Buy Track deserves serious evaluation. The timeline compression is real and the income replacement potential is substantial.
If you’re below that capital threshold or have a longer runway before you’re likely to need the backup, the Build Track is the honest fit. The 12-to-24-month timeline is a constraint but it’s also the point: the newsletter or community you build while employed can be generating something meaningful by the time you need it to.
The third option is running both simultaneously with one designated primary. The tradeoff is discipline and time management, dual-tracking requires protecting both tracks or one starves the other. Done right, both can be generating something real within the same 12 to 24 month window.
The Career Insurance Calculator will give you a path recommendation based on your actual numbers. It’s not a magic answer but it forces you to run the calculation rather than just nod at the framework.
|
// CAREER_DR_PLAN — THE_BOOK
The frameworks in this section (the Freedom Number, the path comparison, the decision matrix) are the core of a book I’m writing called Career DR Plan. It goes significantly deeper than a newsletter can: full scenario modeling, the capital unlocking strategies, the 90-day action plans for both tracks. The landing page is at careerdrplan.com/book. If you want to be among the first to read it and are willing to give honest feedback, reply with “ARC” and I’ll add you to the advance reader list.
|
| // INCOME_STACK_SPOTLIGHT |
Income Stack Spotlight #001: Storage Facility
Every few issues I’ll feature a real cashflow asset with real numbers. The format: asset type, capital in, monthly cashflow, weekly time. Real numbers, real context. Use it to calibrate your own thinking.
|
// ASSET_PROFILE
|
The return is real and steady. What it reveals about the model at scale is the more useful data point.
The IRR on this investment is strong. $22,500 in, a starting yield of $275 a month that has grown to $450, and a current estimated value around $150,000. By most measures this is exactly what a good passive investment looks like. The entry conditions made it possible: the prior investor was a distressed seller who wanted out fast. I bought their shares at a substantial discount. Replicating these returns requires the same conditions, and you don’t get to engineer those.
|
// THE_SCALE_MATH
At an 8% cap rate in today’s market, a $10M property generates roughly $66,700 a month in gross NOI. The 80% LTV loan at current rates runs approximately $55,900 a month in debt service. What’s left is roughly $10,800 a month in net cashflow, and it cost $2M down to get there. That’s not a side project running alongside a W2. That’s a decade of capital accumulation followed by a commercial real estate career.
|
The storage facility stays in the portfolio. It does what it does. I’m building something alongside it that runs on a different timeline.
| // BEFORE NEXT WEEK |
Three actions before the next issue lands.
|
// ACTION_01
Calculate your Freedom Number. Pull up your bank statements. Add up monthly essential expenses: housing, utilities, food, insurance, debt minimums. Subtract any income you already generate outside your W2. Multiply the gap by 1.5. Write the number down. The calculator at careerdrplan.com/calculator does it in four minutes if you prefer.
// ACTION_02
Figure out what you actually have deployable. Liquid savings, brokerage accounts, anything outside your retirement accounts for now. Next issue details a legitimate way to unlock the capital inside your retirement accounts for business acquisition.
// ACTION_03
Pick a track and write one sentence about why. Not a plan. One sentence. “I’m starting with the Build Track because I have 18 months of runway and no deployable capital yet.” Writing it down converts a framework into a decision.
|
| Run the Career Insurance Calculator → |
| Free · 4 minutes · careerdrplan.com/calculator |
Run the numbers. If you want to talk through what you find, reply here.
More next week — including the full REI story and where I'm actually putting my energy instead.
Thanks for following the journey
Charles