Last night I spent some time talking about how much money you need to be happy. There were mixed responses to my claim that there is an alternative to the payscale grind. All of the responses were reasonable (and I learned that you guys really, really like to travel) but none were more pointed than this one from Laura Callow of SEM Insights,

Lovely dream/hope but meeting mortgage, kids school fees, food, car payments (trust me, we need a car) makes it a tad tricky.

She’s right. Extraordinarily right, in fact.

Bills add up, especially when you have a family. Worse yet, as families grow, their expenditures grow with them. Sometimes, the grind is the only way to keep up with it all.

The question is, if you don’t want to spend the rest of your days in a hippie commune baking bread and pontificating about the metaphysical implications of global suffering, how do you look all of your responsibilities in the eye and still find a way to spend at least some of your day working on your passions?

To find an answer, let’s stop a second and look at the concept of “runway.”

For businesses “runway” represents how long you can stay in operation based on your revenue, burn rate and savings. If you have $10k in the bank and $5k worth of expenses a month, your “runway” is two months. At that point, you either get a loan, start flipping burgers on the side, or find a benefactor (VC/Angel/Family) to hold your head above water.

The goal of any business is to make its “runway” infinite, which simply means bringing in more revenue than it pushes out in expenses.

For the time being, I don’t care about “runway” as a concept — what I care about is this, beautifully summed up by Paul Graham –

Once you cross the threshold of profitability, however low, your runway becomes infinite. It’s a qualitative change, like the stars turning into lines and disappearing when the Enterprise accelerates to warp speed. Once you’re profitable you don’t need investors’ money. And because Internet startups have become so cheap to run, the threshold of profitability can be trivially low.

That is the key to all of this.

Everyone, whether you run a business, work freelance or have a day job and family, has a “runway.” It’s the exact dollar amount that you need before the bills are paid, the debt is serviced, the college funds are funded and this year’s trip to Disney is paid down. The moment you arrive at that amount, the very second you do, an amazing thing happens — you’re free. Free to spend the remainder of your time doing things other than worrying about where the next dollar will come from.

Going back to my point from yesterday, I want you to take a look at three things –

• How much money do you need in order to make your “runway” infinite.
• What will it take for you to get there?
• If you were to get there tomorrow, what would you do with your time? What would be your goals?

Would you keep pushing for more money? Would you use your time to travel the world? Would you do more with your family? How would you spend time that is truly yours?

Despite my rah rah exclamations about self-determination, that’s what I really want you to stare at for a while. Most of us got into business for ourselves because we wanted to work towards financial freedom. If all you wanted to do is work 20 hours a day to collect paychecks, there are much better gigs.

How far are you away are you from hitting your “runway,” and what are you going to do when you get there? My challenge to you today is to answer that question.

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