Recently I had the opportunity to sit in on a group of people who have left positions in corporate America and are launching new businesses. They were discussing the challenges of what some people call leaping off a cliff, as in, you give up the comfort of solid ground under you and cast yourself to forces you can’t control. Well, it isn’t that bad — you do have some control over the forces around you, but the problem is, you probably don’t know what they are — at least at first. But as Barry Moltz says in You Need to Be a Little Crazy, “Somewhere along the line, you simply close your eyes and leap.”
The group I mentioned above came up with this advice: Get a home equity line of credit before you dive. That may not sound like a good idea in the current economy, with home equity shrinking, but if it’s an option for you, look into it. You’ll get a better interest rate while you’re still employed, and you only pay it on amounts you actually take out of line of credit.
In general, unless you have no financial responsibilities to speak of and nothing to lose, it’s best to line up a safety net somewhere down in that chasm, so if the forces aren’t with you, it won’t be disastrous.