Hat, haircut, or tattoo?

I’ve been thinking about becoming a full-time entrepreneur for a few months now…" said my buddy Samuel.

He set up a small business alongside his full-time job.

The desire is there.

The means too, as the current income from his business combined with his rental investments could replace his salary.

But he has this even bigger goal of becoming financially independent by the time he’s 40.

He tells himself that if he takes the plunge, there’s no turning back. And if that doesn’t work out, he’ll have to look for a new job (not sure he wants to do that at this point in his life), and it’ll push back his early retirement by several years.

On the other hand, it’s possible that being a full-time entrepreneur could increase his income tenfold, and help him reach FIRE before he’s 40…

As you can see, Samuel’s questionings are not lacking (he reminds me of someone else, by the way ^^).

In the midst of our exchanges, I came across a handy mental model for making such decisions: hat, haircut, or tattoo? ¹

Is this decision to become a full-time entrepreneur:

A hat, with a low error cost, as you can rectify the situation in a few seconds/minutes
A haircut, with a cost of a mistake that you can feel passing by, as you have to wait for the hair to grow back for a few months while you regret that horrible haircut — but everyone will eventually forget this episode in your life, including you
A tattoo, with the cost of the mistake that is paid for life, like a removed tattoo scar that you see every time you look at your arm — with this type of irreversible choice, you have to act slowly and think carefully

So I asked Samuel the question.

At first, he replied: It’s clearly a tattoo, considering the influence it would have on my life!

And he asked me: What kind of tattoo decision have you made in the past?

No matter how hard I thought about it, I could only come up with one tattoo. Well, two… the birth of each of my children. Quite an irreversible decision ;)

We waffled on about marriage, coming to the conclusion that it was technically more of a haircut (with paperwork, lawyers, etc.), while emotionally it could be akin to a tattoo. Mrs MP is also aligned with this reasoning, but I digress ^^

I then challenged my buddy on the tattoo rather than haircut side of his decision to quit his job and become a fulltime entrepreneur…

Even though his career is at its peak with many advantages, he realized via this decision-making system that it was more of a haircut…

Hat, haircut or tattoo?

Let’s say he quits his job today. He goes ahead with his business and does real estate for 1.5 years. Then everything goes wrong financially, or he doesn’t like it at all. In such a situation, he’d go back to looking for a job in Switzerland, and I imagine that with his career and entrepreneurial experience (and at worst with a helping hand from unemployment services), he’d bounce back in less than a year. Technically, it would be a haircut. Emotionally, I think it would be close to a tattoo for his specific case, with his FIRE objective (and ego!) taking a hit.

Will he be taking a bigger risk than he thought he could just a few weeks ago, by becoming a full-time entrepreneur before becoming FI?

Or will he play it safe by keeping the combination of salaried employment and part-time entrepreneurship (perhaps with a gradual increase of the second part)?

To date, he has not made up his mind.

But from what he told me, this decision-making system enabled him to crack a certain glass ceiling he had concerning his job…

And you, what “tattoo” decision have you made in your past?

Header photo credits: pexels.com