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A 29-year-old explains why he chose to take a $100,000 pay cut to start his own business
(Michael Tunney) Michael Tunney.
In 2012, Michael Tunney was living in Chicago, earning about $140,000 a year as a robotics engineer for a car company.
He was living the life he says people expect you to live when you're earning six figures, in a nice apartment with top-of-the-line appliances and comforts.
But something didn't feel right. "I was making great money, but I realized I was spending way too much on stuff that wasn't improving the quality of my life," he says.
"There was one moment where I was late for an outing because I was cleaning my stainless steel paper towel holder and I remember being like, 'What an obnoxious waste of time. I'm literally not socializing because I'm cleaning a paper towel holder,'" the now 29-year-old remembers.
A few weeks later, Tunney quit his job, moved out of his apartment, and sold most of his belongings, keeping only two suitcases' worth of clothes. He spent a year traveling around North America, couch surfing and staying in hostels to skydive and base jump around the US while running a business based on the key-organizing tool he invented, KeySmart, for which he raised nearly $330,000 on Kickstarter.
That first six months, he remembers, he didn't earn any money and was "running on fumes," but "my quality of life just skyrocketed." He started paying himself $40,000 a year in 2013, a figure he's stuck with even though his business has taken off. He works 80-90 hours a week, and says that his hourly pay works out to about minimum wage.
(Michael Tunney) Tunney, shown here, enjoys base jumping.
Tunney still lives out of his two suitcases.
"I love business and entrepreneurship and traveling. Why reverse old habits when I've had probably the best year of my life living off the least amount of money I've ever made?"
"Usually what people assume you do is you make good money and get a nice apartment, a nicer car, but you're still kind of poor," he continues. He now approaches his personal life and his business with the same mindset: "With a business, you try to increase revenue and decrease cost," he explains. "Most people assume [that with your personal finances] you increase revenue and increase cost, but that's counterproductive because that margin gives you freedom. If you're shrinking that margin, you're decreasing the quality of life. I did a lot of introspection and flip-flopped that. I tried to increase earnings as a whole, but decrease my income, because that margin gives you freedom to do whatever you want and that's what I focused on."
He's currently back in Chicago, setting up the KeySmart offices and planning to start working from Europe.
"It forces you to be creative and resourceful," Tunney says of decreasing his income. "That's the drive most entrepreneurs have in that first year of business — they do whatever it takes. I love staying hungry, basically, and it makes me happy. I think it's just a great way to live, it keeps you very motivated. I do a lot of consulting on the side and tell people, 'Go to any city in the world and stay at the nicest hotel for one night, and a hostel the next. Tell me where you wake up more inspired and more life-changed.'"
Have you walked away from a steady, high-paying job to create your own path? Email yourmoney[at]businessinsider[dot]com.
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