I've always been extremely cautious with my spending and even though I was making a full time salary online in 2004, I didn't quit my 9 to 5 until 2006. I wanted to make sure I was comfortable with what I was earning. Some people quit when they're making just enough to get by and I think that's dangerous. I like to have a padding.
You need backup revenue, multiple sites, etc. for the down periods. My income fluctuates from month to month and I wanted to make sure that my low months were still comfortable for me before I quit. That's how I decided when it was time.
And I still remind myself all the time that this is the internet and things can change so I am always trying to find ways to create new income streams for backup. I've heard too many nightmare stories of people going out and blowing their money and then when Google drops their site their screwed and had to go out and find another job. You definitely need to plan ahead and never assume it will always last.
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