[OldSchool]

A few ideas since nobody's responded yet...

7 years isn't very long as an adult. It's going to pass in exactly seven years. If it were me, I'd consider it just another cost like rent. Live with roommates longer I guess.

Work a year or two in a big megacorp where you have to have a badge to get in. Save some money and gain infinite motivation to succeed on your own. Take mental pictures of where you'll never go back. I don't think I'd use the extra money to pay down the loans faster - you need liquidity if you're going to go out on your own. Get some credit cards during this time too. Also, then you're no longer fresh out of school, you're from megacorp!

Don't worry as much about investors. This whole thing has been hyped into some kind of audition process. If you get investors they will be your boss. Bootstrap while you're working at megacorp and by contracting later.

Don't try to create a new market. You (and I) can't afford to do that.

Finally, you must have a trustworthy non-technical partner in the mix. A biz-dev/sales person. Coders and designers are not people people.

[fmd]

Thanks for the response. I definitely could take some measures, including cheaper rent, to decrease expenses. I've thought about moving back in with the parents, as well, to be rent-free.

I've been out of school since May 2010 and I have been employed for the majority of that time since then.

The problem that I noted in the post with stockpiling cash is that I can quantify exactly how much I am losing by saving up rather than spending the money on loans. Furthermore, I made the decision to contribute to retirement first because 8% (average stock market annual returns) in the long run (30+ years) is better than 7.4% (fixed loan-rate returns) in 7 years. So, I have this battle between long term net worth optimization and my yearning to start a business.

I haven't thought about contracting. How does one break into being a contractor? I've searched before and it amounted to competing with others on elance.com or doing work for free until someone can recommend your work to get paid for it.

[OldSchool]

Yeah, elance.com would be tough. You're competing against people in other countries who will work for almost nothing. The best opportunities would be likely to come through people you know.

My opinion on 401K's is that if your employer does matching, contribute enough to get the full match. That's instant profit. Always contributing something is also a good habit to have.

One thing's for sure, you'll probably never have more time, lower overhead, or more drive to start a business than now. I don't understand the whole hard-driving 40-something starting entrepreneur stereotype. If you have a family then, there aren't enough hours in the day to be great at both.

For business, all I can suggest is find something that's already making people money, that's not dominated by big players and do it. Doing what you agreed to do and just generally showing up will put you ahead of many of your otherwise peers.

I'd worry less about the student loan thing - if you own a successful, yet still completely non-famous business you can bank that number in a month or even a week. Not all businesses succeed of course, but I always say "be dumb enough to try and smart enough to make it happen."

I anguished over my negative net worth in my twenties. Don't read the Yahoo or other finance page articles, they'll make you feel like crap. Net Worth != Self Worth. If you eliminate risk too early in life you'll never get a chance to take advantage of opportunities that will inevitably present themselves. Give it time.

Thanks for listening. You'll do well for yourself.