Your Money: Tips for millennials who dream of being their own boss

LOS ANGELES (Reuters) - Bobby Hoyt, 27, is living the millennial dream of being his own boss.

Millennials are ditching the office life for an entrepreneurial experience on their own. REUTERS/Jonathan Ernst

Less than a year ago, Hoyt ditched his day job and launched Millennial Money Man (, a blog that is already paying more than he earned as a high-school band instructor. His wife plans to strike out on her own in a few years, too.

“We saw our parents work hard all of their lives and still not be able to retire,” says Hoyt. “For us, work-life balance is more than a hot button. The freedom of being able to make your own way outweighs the safety of a paycheck.”

When it comes to career aspirations, millennials may well defy the norms set by previous generations by being happy to take a pay cut for better work-life balance.

Even when content in their current jobs, nearly half are actively looking for new opportunities, according to a recent survey by Fidelity Investments. Previous research also found that a whopping 66 percent ultimately want to work for themselves.

Millennials are uniquely well-equipped to do that, too, experts say.

“They are technologically savvy, and the technology that is available to them has brought (business) start-up costs down dramatically,” says Duncan Rolph, managing partner at the financial management firm Miracle Mile Advisors in Los Angeles.

Working for yourself involves plenty of risks. Here are some tips on how to survive and thrive when striking out of your own:

1. Start with a side-hustle

The low-risk way to determine whether your idea could make a good business - and whether you like it enough to do it every day for years on end - is simply to launch it while you still have a day job.

“See if it is something you can be passionate about - it needs to be about more than just money,” says Hoyt.

2. Build a financial cushion

Few businesses are profitable from the start. Even if you are lucky or talented enough to build sales right away, customers do not always pay promptly - and some never pay at all.

In the meantime, you need to eat. To keep food on the table and a roof over your head, build up a financial cushion to cover several months - ideally a year - of living expenses before you launch, suggests Rolph.

3. Take turns

A supportive, working spouse can take a lot of risks out of entrepreneurship. If your significant other has a job with benefits, you may be able to buy health insurance through his or her company plan, and the cost is often subsidized.

If you can live on one income, you can get away with having less savings to handle those slow-and-no-pay accounts.

For two partners with the entrepreneurial bug, launch one enterprise at a time.

Hoyt and his wife made a deal - he would work like crazy to make his business earn enough to support them both. Once there, and they are already getting close, it would be her turn to quit her day job and launch a website.

4. Hire a tax expert

The U. S. tax code can be befuddling for anyone, but there are few areas quite as murky as deductions for small business owners.

For example, there is no way to write off the cost of your summer vacation as an employee. But if you are a business owner tacking a few days onto the important business conference you attended in Jamaica, the answer is drastically different.

And each dollar you deduct reduces both your taxable income and the amount you have to pay in Social Security and Medicare taxes.

“If you have a good CPA, they’ll save you a lot more in tax than you pay them in fees,” says Hoyt.

(The writer is a Reuters columnist. The opinions expressed are her own.)

Editing by Beth Pinsker; Editing by Diane Craft