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What is your ramen profitable goal?

I'd love to hear what ramen profitable goals everyone has?

"Ramen profitable means a startup makes just enough to pay the founders' living expenses." - Paul Graham (http://www.paulgraham.com/ramenprofitable.html)

Mine is $5,000 MRR. As I live in the UK, it currently ends up as ~£1,700 MRR after costs, currency conversion and local taxes. This is the rough breakdown:

  • $5,000 target to begin with
  • £4,085 when converted to GBP (I live in the UK)
  • £2,042 assuming a 50% profit margin for my startup, https://ramenclub.so (EDIT: we also recently wrote about ramen profitability)
  • £1,736 after corporation tax and personal taxes

This is enough to pay rent, basic bills and eat home cooked meals here. Obviously not enough to save, go on holidays, eat out etc though.

To supplement my income and ensure life is still fun while I'm on this journey, I also do some freelancing to fill any gaps. Over time I'm weaning myself off it though.

I'd love to hear what everyone else's target is, how you came up with that number, and the key challenges you're facing getting there?

  1. 19

    $1200 in Bali 🌴

    • 23% corporate taxes 🧳
    • $280 for the villa 🏡
    • $100 for the chef 👩‍🍳
    • $300 for food 🍕
    • $50 for the servers 💻

    There is just enough to cover a broken surfboard 🏄‍♀️ from time to time

    1. 4

      What's your villa like?

      1. 3

        2 bedrooms with AC & bathroom, kitchen, open living room on the garden.

        About 130 square meters.

        My partner pays for the other half of the villa :)

        villa photo

        1. 3

          Well isn't that bloody lovely.

    2. 4

      Crazy man.
      Casually including a chef in Ramen Profitability, haha I love it! 💯
      Maybe I need to move to Bali

      1. 6

        Haha yeah, sounds fancy but it's the top productivity hack I've found and good for my health.

        She does groceries as well.

      2. 3

        The dream.

        Updating my ramen profitable goal to include a private chef in London! How was I living without one :D

    3. 3

      Wow! I had no idea one could live off that little in Bali. Is that $1,200 revenue or $1,200 of profit?

      1. 2

        I own SaaS products so it's $1200 revenue for more than $1100 profit.

        You could live for less than that in Bali :)

        I didn't include the visa cost though (about $50)

        1. 1

          Nice. Great work man.

  2. 6

    I'd say around 10k/month. Seattle is expensive, and the opportunity cost of a salary job (as many have pointed out) makes it a tough decision. I'd give some of that opportunity up, but would want a relatively high income from the business. If it topped out at 10k/month, I'd eventually go back to employment after a few years.

    My answer isn't in the spirit of 'ramen profitable', but I do want to buy a nice house around here one day. At my life stage I wouldn't be happy with ramen profitable alone.

    1. 3

      Makes total sense. It's all about one's lifestyle expectations. And it's harder in places like Seattle, for sure.

      One thing I will say is I don't see 'ramen profitable' as the end destination. More of a key milestone en route to more free and meaningful life. It means people can spend more time on their projects, without requiring outside funding or a job.

      However, it's more complicated than that. Some people find huge amounts of meaning in their regular jobs, and have a great lifestyle - and that's fine! I also empathise with our friends in the USA - where healthcare is tied to employment. That would likely change the equation for me as well.

  3. 5

    My goal is to have a few SaaS products that ultimately replace my current tech salary.

    However, if the goal is to be ramen profitable, then I think about $5000 MRR makes sense for living in the UK.

    1. 2

      Hey Richie! Yup that's the figure I went with as well. Biggest variables are 1. the quality of life you're happy with and 2. the profit margin of your businesses.

      Living in the UK, it does feel like $5k+ is in the ballpark of what most people need. I imagine in places like Thailand you can get away with more like $2k.

  4. 3

    Ramen would be around 1500€ MRR, just because my rent is quite high.
    It's not there yet but I stay optimistic.

    (A complete blast and long term goal would be 5000€ MRR, which I would consider a absolute success)

    1. 2

      1500 is a great start - and if you can get there, I'm sure you can figure out how to reach 5k. Going from 0 to 1 is harder than 1 to N.

      1. 1

        Thanks for the kind words. I think one of the key traits one has to have is patience 😅

  5. 3

    My personal target is €3000 per month. That should be just enough to cover rent and salary taxes ~ if I can get there, then I know I can get further. I don't mind being scrappy for a few months 😂

    1. 3

      Great goal Ben. Scrappiness is the key. @itsjustamar told me that early stage, growth is best done tactically and scrappily. As you understand what does/doesn't work, you start to develop a more coherent strategy.

  6. 3

    Another way to look at this is the opportunity cost. I'd say successful entrepreneurs (in software) are often top talents for mega tech. Ignoring Netflix, FAANG + MSFT is easily 200-250k/year. Assuming $200k/yr, that's the opportunity cost of being sw entrepreneur.

    I wrote a simple back-envelop calculation here: https://increnovation.azurewebsites.net/fermi

    so you can calculate backwards on how much profit/revenue you'll need to achieve your financial goals.

    1. 2

      The link seems to be broken, do you have another? Interestingly I'm trying to make a 'ramen profitable' calculator as well: letting founders work backwards from their end goal, providing the topline revenue required to hit it. Of course, this will have to be slightly different for each person depending on local taxes, profit margin etc.

      The opportunity cost is important to factor in for founders. There is no one size fits all answer, but I'd suggest that money isn't the only variable people consider. Meaningful work and freedom are important too.

      Not all Indie Hackers are software engineers btw (although most are). But I do take your point on big tech generally!

      1. 2

        Yeah I am updating the site sorry. Trying to reorganize it better. Should be working now. Basically it's just a back-envelop calculator to have rough idea to see if business/idea is feasible. I also wrote bunch of other tools there.

        I guess it would help startup founders to have some idea financially.

        The next steps would be adding abilities to save, customize, and some pre-populated templates. also probably add some assumptions and generate templates accordingly. I just started this last week so...

        1. 2

          Good work already. We're working on some version of this tbh - but it's somewhat less generalist. I think tools like this are very much needed in the community.

          1. 2

            Hopefully this helps people out. I see competitors charge $99 for this. While they might provider a little more than what I got already, I think it’s nice to have a free/value version available

            1. 1

              Interesting to know. Yeah I think ours would be free.

  7. 3

    I really appreciate you including the accepted definition of Ramen Profitability in your post. I always thought that it was enough revenue to literally eat ramen for every meal... this definitely set a higher bar.

    Best of luck hitting your goals!

    1. 2

      Ha yes - many Indie Hackers take it too literally. It just means the minimum living standard you'll accept (that your startup supports) as the price of freedom.

      And thank you!

  8. 2

    Love to see this Charlie! Moved out of London to try and make things cheaper, but my single-person burn is still insanely high.

    Mine would also probably be $5k!
    *$2k debt pay off (yay)
    *$1,500 mortgage and bills
    *$300 software
    *$200 food

  9. 2

    Great post - I'd never come across the term "Ramen profitable" before.

    I made this day rate calculator a couple years ago.

    Turns out it helps you calculate exactly that number by the look of it! It's fairly rudimentary in that no taxes are calculated but it gives you a good starting point.

  10. 2

    You've made me do a quick research.

    Minimum wage in Turkey is around $315, and living costs of a single person is around $400. I was aiming for $300 to $400 really even tho these numbers are statistics and it would barely cover the ramen but it always a good start.

    1. 2

      Great start, and if you can get there, you can go a lot further.

  11. 2

    Mine is very low = 1000 MRR (hell, I even would say 500). I dont pretend everybody to be at my standard but I would advise people to stop spending on superfluous things and save or invest in tangible appreciating stuff (like land).

    1. 1

      Thanks for sharing. Where are you based out of interest?

      1. 1

        LATAM. I am pretty frugal, so I dont expect most people do it my way. But you can rent in the 200-500 USD/month range if you are savvy, around 200 for food if you cook at home. Those are the 2 big expenses.

  12. 2

    €5k net salary on my bank account to support my family.

    1. 1

      Not dissimilar to mine. What revenue are you at currently, or are you just starting out?

      1. 2

        I'm at EUR 21k MRR while the majority of that goes to the team. I just quit my job at Stripe to go full-time on that side-hustle. First day is June 1st. Revenue is not high enough for my own salary so that's the goal for the year: back to profitability with the team complete (including me).

        1. 1

          Awesome. It sounds like you'll be there soon enough.

    2. 1

      This comment was deleted 2 years ago.

  13. 2

    With London expenses my ramen number would be £2,000 pm. Haven't found out a 'base' yet so the new number is pending https://dramacool9.li/

    1. 1

      Best of luck! Not easy in London.

  14. 2

    I just left London to increase my runaway as much as possible.

    With London expenses my ramen number would be £2,000 pm. Haven't found out a 'base' yet so the new number is pending

    1. 2

      I feel you - it's not easy in cities like London.

      I'm working on a tool to make it easier to calculate these things - for when you're in the new place. Stay tuned!

    1. 2

      Ramen profitability is superb Vinesh!

  15. 2

    This is a good discussion topic!

    The one perk of trying to build a business while living in a developing country is that my expenses are pretty low. My total expenses right now are only about $900/mo, and I could even shave that down a bit further if I really needed to.

    Assuming it'll take about $200/mo to run Konbini (which is an estimate as it's still a little while away from launch), and accounting for the 20% corporate tax rate in Estonia (I don't live there, but I'm about to incorporate there through e-residency), I'll only need to get to about $1.5k MRR with Konbini for it to be comfortably ramen profitable.

    1. 2

      Nice - in the UK we have to deal with personal taxes on top of corporation tax. $1.5k MRR sounds totally do-able. Are you pre-revenue with Konbini?

      1. 2

        Yup, I'm still finishing up the MVP for Konbini, so I haven't been doing any sales yet.

        In fairness, I'm still not 100% confident on whether I'll also have to pay additional taxes in Serbia (where I actually live), but we have a tax treaty with Estonia, so theoretically any extra tax I have to pay here should be minimal. I'll have to book a meeting with an international tax consultant to figure that stuff out when I start actually making money.

        On that note, a cool thing about the way corporate tax works in Estonia is that it only applies to profit (not revenue), and only when you actually pay out dividends, so any profit that you re-invest into the company is completely tax-free.

        1. 2

          Makes sense - and always good to check so you don't get nasty surprises. That's cool about Estonia's system too. What are the other benefits of an Estonian e-residency, if you have time to share?

          1. 2

            I'm sure there's lots of stuff I'm not aware of since I haven't even actually started using it yet, but I'd say the main benefits are:

            • An Estonian company can be managed 100% digitally, online, and from anywhere — the e-residency program is (obviously) designed for people who don't live there, so there's never an expectation that you're available to physically wait in line in an office somewhere
            • Actually establishing and running an Estonian company is easy and cheap, thanks to service providers like Xolo who can handle all the admin for an indie company for under $100/mo
            • Estonian corporate taxes are reasonable (20%), and as I mentioned, apply only to profit, and only when you actually pay out dividends
            • Incorporating in Estonia makes it an EU company, which is important to some customers and makes it easier to build trust

            The one "gotcha" I can think of is that if you're interested in forming a company using Estonian e-residency because you want to use Stripe, that unfortunately won't work, because Stripe only supports companies formed using e-residency if the actual person associated with it also lives in a supported country (see here).

            1. 2

              Thanks for sharing - super interesting.

              The UK is planning to make some crazy tax increases over the next few years, so I'm considering my options as to where to incorporate.

              It would be easier to accept if our government was more competent. I'm absolutely not anti-tax, but we all have our limits.

    2. 1

      Won't you have to pay taxes in Serbia anyway then if you live there?

      1. 1

        Possibly. I'm not super clear on the specifics of how much I'm going need to pay in each country yet, but the tax treaty between Serbia and Estonia prevents double taxation from happening, which is the important part.

        1. 1

          Yes, most countries have deals to avoid double tax, but then you pay the taxes in the country which is your main point of residence. Countries have different rules, but most often if you spend > 1/2 of year in a country then you are being taxed there. So unless you move to Estonia there is not so much added benefit unfortunately. At least tax wise.

    3. 1

      Why would you pay 20% to Estonia if you can pay 0% to the US or UK (assuming you are not from those places) ?

      1. 1

        The reason you aren't taxed in the US and the UK if you don't live there is because (a) your country of residence takes precedence for tax purposes, and (b) tax treaties those countries have with your country of residence prevent double taxation from happening. Estonia has tax treaties with many countries too, in which case the same logic would apply.

        1. 1

          No. The reason you are not taxed in the US and the UK if you form a LLC (or its equivalent) is that you can claim "a disregarded entity" status, and if you are, as presumed, a non-resident alien you dont get to pay taxes there (as long as you dont have physical presence in the country, etc, check with your accountant). It has nothing to do with tax treaties, which are another different ball game.

          The fact is that ,if for example, you are an Argentina resident, and you create a company:

          • In the US , your individual owned LLC will pay 0% of taxes (under above assumptions)

          • In the UK your company will pay 0%.

          • In Estonia your company will pay 20%.

          AFTER all of that, how much you will pay in your HOME country as individual will depend on your laws etc, but that thing is independent from all above.

  16. 2

    I'd like at least 500€ per month in my pocket, which would be ~700€ revenue, but 1000€ in my pocket with ~1300€ MRR would be my sweet spot.
    I want just enough to cover the housing + food + utilities costs from this.

    Currently at 0, still in MVP building phase XD

    1. 1

      Nice, best of luck. Do you have a working product yet?

      1. 2

        Yes, it does something bare minimum, but it still has some bugs and doesn't have some core features I'd like. I am using to host https://vladcalin.ro and https://csvgames.com (me being my own customer, dogfooding, so to speak)

        1. 1

          Nice, best of luck with it.

  17. 2

    I think I need to make €1,500 MRR to get by. I'm currently at €0. So obviously lots of work to do since my MRR is my income. haha.

    1. 1

      You can do it Iain!

      What is your product?

      1. 2

        My product is getparthenon.com a SaaS boilerplate of sorts. I think it'll take a while of being on the market for people to buy since it seems like it's one of those things people think about buying for a long time before doing so.

        1. 1

          Dope idea. Have you got any user feedback as to why you haven't made sales yet?

          1. 2

            If I talk to people they get onboard because it's easy enough to sell. What I'm trying to do just now is get sales without direct sales. What I've seen from other boilerplate seller's interactions is that people spend a long time thinking about buying the product before they actually do it. It's often a major investment for people. So it takes them a while to pull the trigger on buying it.

  18. 2

    My ambition is to develop a few SaaS applications that will eventually be able to replace my present tech income. If the goal is to be ramen profitable <a href="https://essaysnassignments.co.uk/dissertation-writing-services/">dissertation writing help uk</a>, I believe $5000 MRR is reasonable for living in the UK.

    1. 1

      Yeah I think $5k MRR is the standard ballpark figure for 'UK ramen profitable', although I imagine it could go lower with enough sacrifices. Best of luck with your projects.

  19. 2

    My goal is to make a successful vinyl wrap business which I started few months back I am improving it day by day.
    I am planning to make it a brand.

    https://www.vinylfrog.com/

    1. 1

      That's so cool - not the typical Indie Hacker business, which I love.

      Are you pre-revenue? And do you have a revenue goal?

  20. 2

    Wow! I know there had to be a fun name for "enough money to get by", did not know it was Ramen Profitability.

    I live in Charlotte, North Carolina and my living expenses are about 2500 USD.

    • 1,500 for mortgage and utilities
    • 1,000 for food and fun
    • The rest of my paycheck I through into an investment portfolio and reducing my house's principal

    At this moment though, I'm working full time as an Application Engineer to cover costs. I would just like to get to about 500USD MRR as a personal goal. At the moment I've done about 700 for last month and so far this month I've made about 400. I really do fear churn.

    1. 2

      Aha, fun phrase isn't it?

      Great work on the revenue so far. Going from 0 to 500 is harder than 500 to 5,000 in my opinion. What sort of business is it?

      Something I found useful when I was in your position was slowly reducing my working days as I increased side project revenue, up until ramen profitable. Nice calm way to do things.

      1. 2

        Thank you! I'm in the learning phase at the moment. So I just built a LATAM version of the milliondollarhomepage with serverless tech.

        I needed something predefined with modules that are universal to any SaaS (Payments, Digital Product delivery, CRUD).

        It's in spanish, but if that doesn't scare you away the url is https://www.unmelondepixeles.com/ and as you can see I've only sold 8,700 of the 1M pixels, for the 2 months I've worked on it. So about 1k in revenue. Stripe atlas already cut my profit in half xD, but hey. I have an LLC for "free" now :3

        1. 1

          Haha clever idea that.

          Great start getting to 1k revenue. If you can do that, you can do a lot more.

          I've heard there are loads of great, high volume Spanish keywords people can still rank for. Tonnes of opportunities in that market.

          1. 1

            Oh? Do you have list? I haven't dived into the SEO pool yet :3

    2. 1

      My goal is to create a few SaaS applications that will ultimately be able to replace my current income from the computer industry.
      Check More https://publicistpaper.com/how-to-fight-against-unhealthy-eating-habits-at-university/

  21. 2

    Interesting to read lot of comments from other entrepreneurs. I have since past the Ramen profitability stage in my business but if I should start all over again then I think $5,000 MRR in monthly profit would be sufficient considering the fact that I reside in California.

    1. 1

      Makes total sense - I've heard California is pretty expensive compared to other states/countries.

      What business are you building?

  22. 2

    3720 CAD $,

    which is the minimum wage in Ontario.
    Enough to live modestly and be free from corporate harassment.

    Breakdown:

    1. 4k$ rent + 800$ food and meds + 0$ car + 800$ utilities and services [internet, ...] + 700$ that randomly disappear from my account + 20$ IndieHackers gold membership.
    1. 1

      Nice. 3,720 CAD $ after tax and costs, right? Do you have a sense of the revenue you need to reach that?

      1. 1

        no no, 3720$ before the voltures come.
        You are left with 0 afterwards, but your body is intact and you aren't hungry.

      1. 2

        Incorrect parsing,

        1.4k and not 4k
        :)

  23. 2

    For me - it's just about covering my living essentials
    $3000 for rent (:'( NYC))
    $500 for food
    == $3500 MRR

    Key challenges: Slow progress due to full time job commitments! Slowly but surely, eh?

    1. 1

      Gotcha. It's tough in big cities like NYC and London (where I live). But still do-able - takes a little longer is all.

      So that's $3,500 MRR after tax, right? Out of curiosity, do you have a sense of how much revenue is needed before costs and taxes to reach that figure?

      The reason I ask is - I'm doing some research on this exact topic. How easy it is for founders to calculate the pre-tax/pre-cost number. Something I've personally struggled with in the past.

      1. 2

        Definitely a good point! Tbh, I have no idea. I'm sure I'll have a look into it when I start making money and diving in deeper to my costs. For now, the target MRR just reflects my essential living expenses.

        1. 1

          Got you! Hopefully if and when we build this ramen profitable calculator it'll be of some use to work this out.

          1. 1

            cool! excited to check it out later.

  24. 2

    Mine it is around 3k USD, I plan to once get there use all my time to learn things. I want to become a polymath. I'm currently a software engineer and I have been doing that for about 13 years, now I want to go through Med School but I do need money to pay biils and all.

    1. 1

      Ambitious goal (going through med school) - love it. Any particular challenges you feel are holding you back from the $3k MRR?

      1. 2

        Mostly time, because I'm trying to get there by investing, and that takes a long time to kick in. Starting a side hustle has been quite hard for me. I admire a lot everyone that can do that, because I know it isn't easy. Work in fulltime then use the remaing of the day to do a side project it is a lot.

        1. 2

          It can be difficult, for sure. It might be worth trying to find a part-time role to free up your availability. https://4dayweek.io, https://www.foundergigs.com, https://parttimetechjobs.co are all useful here (disclaimer, the last one is mine).

  25. 2

    Another brilliant, thoughtful essay from PG, for any aspiring entrepreneurs:

    http://www.paulgraham.com/lesson.html

    1. 1

      Love this - thanks for sharing.

      1. 2

        My pleasure man.

        I've found his writing to be original and brilliant. Guessing you may have dabbled in his stuff; I feel like it's at or a better quality than what one would find among the nation's most popular magazines and newspapers...

        http://www.paulgraham.com/articles.html

        1. 1

          Some of his articles are good but a lot of other are just cargo-culting. You also have to take into account he is not a disinterested part, as a VC it is in his interests to push people to work very hard for their startups, he stands to gain millions from that effort.

        2. 1

          Yeah there aren't many business thinkers who write as clearly as him. Huge fan.

          1. 2

            That's a fair point about his own incentives.

            And @charlierward - I think you nailed it: it's his clarity (and ability to simplify) that I've found most impressive.

            1. 1

              For sure. So easy to understand.

  26. 2

    My goal for ramen profitability is just $500 MRR as the cost of living at my place (India) is relatively lower :)

    $1k MRR would be more than sufficient to lead a comfortable life for me!

    1. 2

      Wow - I wish it was this cheap in the UK! Best of luck with your goal.

  27. 2

    Our goal as 2 co-founders is to reach 10K MRR by the end of year (3K atm). This would make it possible for both of us to go full time on our project (Best Writing) and stop freelancing for the cashflow.

    1. 1

      Strong goal. In USD?

      What are your biggest challenges getting there? Just growth, or anything else?

      1. 2

        Actually EUR as we are from Europe.

        Our challenge is currently having a bit more time to spend on this side-project, because freelancing eats all time and energy.

        Also we are looking into ways to scale sales and our value proposition. And growing one of our audiences - content marketing hiring managers.

        1. 1

          Have you considered trying to reduce your working days, even from 5 to 4? It can make a huge difference. I've progressively gone from 5 days, to 3, to 1 as I grew revenue. Slow, but a calm way to do things.

          1. 2

            @charlierward yes! That's what I am actively trying to do. Trying to work part time only. But living in Copenhagen is quite expensive and my gf is a student at the moment. So I have to make quite a lot for a living. And some projects are more demanding that the others. For example now in May I am more free, but starting from June it will be more intense work for upcoming project. It's more project gigs rather than a stable part-time job. So yeah, still learning to balance freelancing and side-hustling :D I started both 2 years ago, still much to learn.

            1. 2

              I feel you - it's easier said than done. Keep pushing - you'll get there man.

  28. 2

    1k MRR.

    It's not enough for ramen profitability but I think it's a good start.

    I figure if I can get to 1k MRR I can get to 5k and 10k.

    It's all about the process.

    1. 1

      Agreed. Going from $0 to $1k is harder than $1k to $5k. A great target to start with.

  29. 2

    Maybe my goal is paying my rent by YouTube contents? I’m not sure if it’s easier to be ramen profitable by being a content create or app business.

    1. 1

      It's hard to say without more information. In general though, I've heard YouTube takes a long time to monetise in a meaningful way. What kind of YouTube content is it, and what kind of app business?

      1. 2

        It’s just a video about life in London in Japanese. The app will be a location based app showing good place to eat or socializing places. It’s hard to think about monetization with the location services.

        1. 1

          Haha I just realised it's you Yusuke!

          I think typical business models with directories are:

          • affiliate links
          • ads
          • premium subscription

          They can all work, but it's all about the traffic. With enough traffic you have more options.

          For example, Pexels is a directory of free stock images, and they make their money from affiliate links. Nomad List does mostly from subscriptions etc.

          1. 3

            @charlierward Dude, your answers to all of these comments are so good!

            Highly appreciate you doing this

            1. 1

              Thank you Jebraat, I try!

  30. 1

    Ramen profitable is a term used to describe a business that generates enough revenue to cover its basic expenses, such as salaries, rent, and utilities. It is a term commonly used in the startup world, where many new businesses focus on achieving profitability as quickly as possible, even if it means sacrificing growth in the short term. The goal of ramen profitability is to achieve financial stability and sustainability, which can allow a business to focus on growth and scaling over the long term. By achieving ramen profitability, a business can become less dependent on external funding and more self-sufficient.

  31. 1

    Non-technical founder here. If I ever sought to fully replace salaried work (I don't), I would want $300K annually from a startup. Why? When you're young, you look at expenses, but when you're old, you wish you had savings. When young, healthcare is a nuisance, but when you're old, you actually use quite a bit of it.

    I would need to be compensated for risk as most startups fail. Part of that compensation would be freedom and gained experience (or my target would be $500K). Opportunity cost financially for me was probably $250K (including benefits) when I started the Indie journey.

    Some build a startup that chugs along at personal profit of $200K+ for 20 years, but that is a total unicorn. More likely you fail, earn far less, make it big or die off after 5 years or so. Also, my passions change and can't imagine a company I'd run for 20 years.

    The good news is building a company that spits out $5K a month part-time has proven far easier and totally doable. In fact, why not build several as it reduces risk, makes you more marketable and opens opportunities for recurring revenue as well as profitable exits. This route is not quite as much freedom as being totally tether-free, but $5K/mo. adds significant freedom and reduction of risk. It also means the day job need not be so demanding and you have %@#$^&-you money if the employer isn't to your liking.

    If I were untethered (relationship-wise) and 20-30, I'd try the globetrotter route mainly for the experience. But, I wouldn't expect it to be a lifetime thing and my Ramen goal would just be survival and adventure. As long as you create value in your 20-30s, you'll be able to create more value and get paid for it beyond that.

    Just a different perspective for consideration.

  32. 3

    This comment was deleted a year ago.

    1. 1

      I feel your pain being from the UK (although taxes are perhaps not quite as high here). How far along are you?

      1. 2

        This comment was deleted a year ago.

        1. 1

          Awesome. I'm a UX Researcher by day, if you're after feedback very happy to try and help!

  33. 2

    This comment was deleted a year ago.

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      So my maths may be shaky, but this is how I work it out, starting with £2,042:

      • In this tax year, £823 can be withdrawn as a salary (which also counts as a cost).
      • That means there is £1,219 remaining for corporation tax and dividends.
      • £1,219 * 19% corporation tax is £231.61. So we're left with £987.39.
      • £987.39 * 7.5% personal tax is £74.05. So we're left with £913.34.
      • £913.34 dividends, plus £823 salary adds up to £1,736 after tax.
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        This is based on conversations i've had with my accountant. I've been wrong in the past about my after tax commitments - hopefully not here.

        I'm actually thinking of making a ramen profitable calculator to make this a little easier!

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          This comment was deleted a year ago.

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            The tax bands you mention are not for withdrawing dividends via a limited company. The rates are on here: https://www.freeagent.com/rates/dividend-tax

            EDIT: I go by what I've been recommended in the past by accountants. Take a salary up to the tax free limit, and the rest in dividends underneath the higher threshold. This is meant to be the most tax efficient (and legal) way to do this in the UK - but I'm very much open to better suggestions. I do admit the 7.5% is outdated - it was very recently changed to 8.75%.

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        This comment was deleted a year ago.

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          You can withdraw more dividends than £2k per year - you just get taxed more as you withdraw more: https://www.freeagent.com/rates/dividend-tax

          It looks like the rates were just updated - so my maths was 1.25% out on dividends tax above.

          In the UK it's now, in the 2022-2023 tax year, 8.75% on dividends withdrawn up to £37,700, after which the rate goes up to 33.75%.

          (For context - my calculation is paying myself through a UK limited company. It might be different as a sole trader for example.)

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            This comment was deleted a year ago.

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              I went round in circles with this for a longtime and think I've finally got a grasp of it. I'm aiming to make some content and / or a tool that makes it easier for other indie hackers to figure out.

            2. 1

              All good! I actually like having this stuff stress tested somewhat haha

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