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Don’t Quit Your Job To Follow Your Dream

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Don't Quit Your Job to Follow Your DreamDo you love your job? Have you ever thought about quitting your job and following your dream? Don’t do it unless you think it through first! We are all in unique situations and there are many variables to complicate the equation. If you are in your 20s, single, and in good health, then you can take much more risks than someone like me. I am getting close to 40, married with one kid, and have a mortgage. At least I don’t have any credit card debt, car loans, or student loans. There are many 40-year-old men with all of the above who is stuck in a job he doesn’t like. When you are older and have more financial obligations, it will take much more planning to quit your job and follow your dreams. Here are some of the things that you need to plan for.

Health Care


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Health care is a huge problem in the US. When your employer offers health insurance coverage, you don’t think about it much, but when you don’t have a job, it can be a huge problem. As we get older, we will need more health care and it will get more expensive and difficult to obtain. I found out how difficult it can be when I tried to obtain health insurance for my mom. As for me, Mrs. RB40 has a good plan from her job so I’m planning to jump on that. See JD’s struggle to get health insurance at Get Rich Slowly.

Cash Flow

Can you make the finances work and for how long? Most financial experts recommend 3-6 months of emergency saving. If you are planning to quit your job, this is not enough. Can you start making money right away after you quit your day job? If not, then you will need some kind of supplemental income while working on your dream. I kept track of my cash flow for about a year now and most of the time, we had a surplus. Last month, we had a negative month for the first time in 2012, but I’m not panicking because we have enough liquidity to cover the $29 short fall in April. Even if we average $1,000/month shortfall, we can last 50 months before having to go back to work because we are maintaining a $50,000 emergency fund at the moment.

Time Frame

It is important to figure out the time frame for your dream. Suba at Wealth Informatics is giving herself 2 years to make self employment works after she quits her job. She plans to go back to the corporate job if it doesn’t work out in that time frame. I think it’s a great idea to give yourself a time frame to pursue your dream. It will help with the financial planning as well. I’m planning to be a stay at home dad/online entrepreneur after I leave my cubicle job and I’ll have about 3 years to see if it will work out. Once the RB40 kid goes off to school, I can work on other self employment ideas or go back to a corporate job as a last resort.

Future Financial Needs

Retirement and saving for a college education are the two big items for us. You can put off these for a few years, but you can’t ignore them forever. Mrs. RB40 will continue to max out her 401(k). I’ll put retirement saving on pause for a few years. Once we are comfortable with our monthly cash flow, I’ll start back again. We will also continue to save for college as much as we can. We can always sell the rental home to pay for college if we really need to.

An Action Plan

What will you do after you quit your day job? It is best to have a plan of action before you burn your bridges. Kevin at Invest It Wisely is working on his websites, a book, and an app. He didn’t start these entrepreneurial ventures after he quit his job. You can bet he was already working on them before he handed in his 2-week notice.

All Aboard

Is your partner on board with this? This is extremely important. This kind of career transition is challenging and you need your partner’s support for any chance to make it work. If you are thinking about self employment at all, then you should start working on your partner too. The family may need to downsize or make other changes to make it work. Here are some tips from Mr. Money Mustache on selling the dream of financial independence.

As you can see, it is much easier to go it alone if you are young and have less financial responsibilities. My friend Alison quit her office job, started her own yoga business and became a full time yoga teacher with very little savings when was in her 20s. It will only get more difficult as you get older to quit your job and pursue your passion. I’m not saying it’s impossible, but it will take a lot of planning and saving up to do so. Do you ever think about leaving your day job to pursue your passion? What is stopping you? 

Update: Don’t Quit Your Job Until You Read This Book. If you can stick it out a little longer, read this book and it could help you get a severance package.

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{ 57 comments… add one }

  • Financial Samurai May 7, 2012, 2:04 am

    Man Joe, I’m really bummed you’re not taking the leap anymore 🙁

    What is the factor, or the several factors that really changed your decision?

    • retirebyforty May 7, 2012, 9:02 am

      Can’t I be a contrarian once in a while? 😉
      The biggest factor for the delay is money. It is so hard to cut off the big monthly paycheck. If the company makes it a bit easier by offering severance, I would be gone by now. It’s just dragging on and on at the moment.

      • Financial Samurai May 7, 2012, 10:02 am

        I’m launching a new FS Online Service product soon that might help you. Stay tuned 🙂

        And no, you can’t be contrarian, because you aren’t writing it like a contrarian! I am a poker player and can see straight to the sole of your writing! Fight back, and do not delay! Otherwise, you will have to change your blog’s URL!

      • Jim May 7, 2012, 12:48 pm

        “If the company makes it a bit easier by offering severance, I would be gone by now”

        Ah, I think you must be working too hard!! 😉 THe only people who get severance offers seem to be the ones who have a poor performance record. Whatever you do, don’t let them know you want / plan to leave or then you’ll never get a fat severance offer cause they figure you’ll just quit for free.

        I saw this all happen to a coworker. He hated work and wanted to leave. But his work ethic was too good and he worked hard even though he hated it. So he was too valuable for them to want to get rid of.

        So.. the best way to do it is to stop working hard and get yourself a bad performance review or two then youll be asked to leave with a fat severance offer. Stupid, but thats kinda how it works as far as I’ve seen.

        I’m being a bit cynical here and of course YMMV and every employer is different.

        • Invest It Wisely May 11, 2012, 7:03 pm

          It’s cynical but it’s also reality at many places. This is how it was at my place. The company got sold again just very recently, and while most people survived, the lower performers or those on lower-performing projects got sweet 6 month severance packages. Everyone else got told “be happy you still have a job.” No layoffs in my old team! 😉

        • retirebyforty May 11, 2012, 8:30 pm

          HR said they only offer severance to people with repeated bad performance reviews. So if you are a good performer, you have no easy out. It’s sad, but true. You’re 100% correct.

        • Tim May 30, 2012, 5:39 pm

          What? Really? I sometimes feel guilty when I slack off at work, and I never thought of doing this. I’ve had satisfactory to just below excellent review in the past, so a bad review is kind of foreign to me, and I’d probably be demoralized by that.

          How do I get a bad review without getting fired?

          • retirebyforty May 31, 2012, 8:57 pm

            Do you work for a big company? If you just do the minimum, you will rarely get a bad review.
            I think most companies won’t fire you with the first bad review unless they are already planning a layoff.

  • Awesome, awesome, awesome advice.

    Before I quit my job, I calculated exactly how much COBRA would cost (including the 2% administrative fee). I also created “After I quit my job” budget. I’d been supplementing my income with a passive activity about 9 months before my last day. About a year and a half before I made the decision to leave my job, I spent about 2 hours writing a still unpublished blog post called “Countdown to Homelessness” that detailed everything I would do if I quit my job and everything went wrong. I also know that now is the right time in my life to accept the risk of quitting my job. If I were a parent, I don’t think I would’ve made the same decision. I’m also not accountable to anyone but me.

    • retirebyforty May 7, 2012, 9:00 am

      I read your Countdown post. I think it’s a great time to take some risk when you are younger. It so much more difficult when you have more obligations. You can always go back to work if it doesn’t work out right? That’s also much harder when you get older.

      • That wasn’t the Countdown post. It’s still unpublished. The future Countdown to Homelessness post ends with “Spend my last few bucks on a Greyhound bus ticket back to Jacksonville, Florida to live with my mama.” Well, that would happen before I became homeless. Of course, looking for a job would happen well before I moved back home.

        • retirebyforty May 8, 2012, 5:21 pm

          Got it. 🙂

  • When I decided to pursue my passion in writing and photography, I did not have any second thought. Yes, I did not leave my full-time job until I was ready. But when I felt it was the right time, I immediately acted on it and did not entertain any negative thought. I left my day job and nobody was able to stop me… not even my boss who offered me a better package nor my husband who was totally against the idea.

    • retirebyforty May 7, 2012, 9:04 am

      I love it. Conviction is the key to success. Did your husband came around? Please expand more on how to deal with the spouse’s dissenting opinion. Luckily, Mrs. RB40 supports my goal, but I can see that it is adding stress to her day.

  • SB @ One Cent at a Time May 7, 2012, 6:52 am

    Very practical thinking. I have been telling about it ever since.

  • John @ Married (with Debt) May 7, 2012, 7:18 am

    Health care is the biggest concern for me, especially with kids. It’s kinda tough to take two kids around the world on an extended vacation. Thanks for the sobering reminders.

    • retirebyforty May 7, 2012, 9:07 am

      Health care is a huge concern for us as well. If I can’t get on my wife’s plan, I would really hesitate to leave my job. I wish we have more affordable health care options here in the US.

  • Lea May 7, 2012, 9:00 am

    Great article, but a lot of typos. If I were closer to FI, I’d offer myself up as a part time editor and quit my day job. 🙂

    • retirebyforty May 7, 2012, 5:28 pm

      My editor is fixing the problems now. 😉
      Last night was a little rough for everyone since the little guy was sick.

    • Mrs. RB40 May 7, 2012, 5:30 pm

      Sorry, I’m his editor. I was asleep after putting our fussy child to bed when Joe decided to post this…Most folks who follow retireby40 know that I will edit when I get to it…

      • Lea May 8, 2012, 12:02 pm

        Damn, I do have a secret desire to be an editor at some point. I get to do a bit of editing at my job, and it’s one of my favorite parts!

        • retirebyforty May 8, 2012, 5:26 pm

          Keep your eyes open for opportunities. You never know when it might come knocking. Good luck!

  • Michelle May 7, 2012, 9:34 am

    I have thought about it. But the fact that what I truly what to do involves nearly no income (Peace Corps) and I would have to get rid of my house.

    • retirebyforty May 7, 2012, 5:29 pm

      You should get your name on the list if you want to go to a specific country/region. The waiting list can be years long and you can always change your mind. Maybe?

  • 20's Finances May 7, 2012, 9:35 am

    Does this mean you’re not going to reach your goal of retiring by age 40? Are you updating your exit strategy? I want to know the good stuff. 😉

    • retirebyforty May 7, 2012, 5:29 pm

      I still have until 2013 before I’m 40. You’ll have to wait and see.

  • Frugal Portland May 7, 2012, 12:50 pm

    I totally understand the trap. Of course you will be able to earn money, you know this. But it will take you a long time (if you can get there at all) to earn an engineer’s wage.

    • retirebyforty May 7, 2012, 5:31 pm

      That’s why it is so hard to just quit. I should have left when I was in my 20s and didn’t make as much money.

  • Jim May 7, 2012, 12:56 pm

    You’ve made a lot of great points here. I for one think people really need to sort out their health insurance before they make any major career changes like starting a business or early retirement. Its more expensive than most people realize as a lot of us usually only see the portion we pay and don’t realize our employers usually foot 80% of the cost. I also think having a timeline planned for following a dream is a very good idea. If you don’t become a success at your dream after a couple years or whatever then its time to call it a hobby and get a real job.

    • retirebyforty May 7, 2012, 5:33 pm

      If you have any kind of pre-existing condition, insurance will be very expensive and difficult to find. I’ll check my wife’s plan to see how much it cost, but that’s a life saver. If I don’t have that, I probably would have to move to a country with more affordable healthcare like our neighbor up north.

      • Invest It Wisely May 11, 2012, 7:36 pm

        If you can take the cold, why not? Don’t forget that we do pay for it, with our taxes. However, I think with all that heavy US spending there’s probably not such a big difference these days.

  • From Shopping to Saving May 7, 2012, 2:50 pm

    My dream is to go to law school and I’ve been trying to achieve this since I was young. I finally am able to do it now but will have to quit my job. It’s not ideal, and I’ll miss the paycheck but I’m 24 and I’m ready to go back to school. Luckily I have some very supportive people in my life – my family and boyfriend, and they are all willing to help me out.

    • retirebyforty May 7, 2012, 5:33 pm

      Congratulation! I’m sure you can do it. 24 is a great age to go back to school. You are much more mature and I’m sure you will succeed. Good luck!

  • krantcents May 7, 2012, 4:19 pm

    Any major decision needs (requires) a plan! This is a life changing decision and requires a plan and sufficient thought that examines all the consequences. You cannot take this lightly.
    You need more income property to take the leap. 🙂 The other choice is move into the duplex. Seriously, this is notan easy decision.

  • MoneySmartGuides May 7, 2012, 6:02 pm

    I feel that the thing that stops me is the ‘comfortable’ state that I am in. If I didn’t have a job that paid my bills and allowed me to save, I think I would be more aggressive at starting my own business.

    • retirebyforty May 8, 2012, 5:15 pm

      I know what you mean. I was in a comfortable spot for a long time too and it’s hard to move from that situation.

  • Marissa @ Thirtysixmonths May 7, 2012, 6:30 pm

    I quit a month ago. I gave my notice that had been typed up since December. The funny thing that I didn’t plan on quitting, but it truly felt like it the right moment to take that leap.

    I wish you all the best with this decision, as I know its difficult esp with a family to worry about.

    • retirebyforty May 8, 2012, 5:16 pm

      I have to drop by and catch up at your site. 🙂
      Hope it is working out!

  • Squirrelers May 7, 2012, 6:37 pm

    It’s wise to think before taking the leap, and cover all angles. If one has kids, it’s incredibly important, as their well being is most important. If one is younger, the downside is certainly less for most.

    Risk taking is often a big part of achieving big success, but foolish risks can quickly ruin a person’s financial situation. There has been much chatter in recent years about college being overrated, how easy it is to live via online income, etc. Best to use common sense and critical thinking, instead of leaping into something that you want to believe is true.

    • retirebyforty May 8, 2012, 5:21 pm

      Thanks goodness Mrs. RB40 likes her job. I don’t think I can make any kind of move if she wants to be a stay at home mom. It’s good to plan for the worse and be ready for surprises.

  • PK May 7, 2012, 10:20 pm

    I haven’t, but I guess I just like my job too much, haha. The important part is you’re doing the math and adding up all the things which are harder to value – but I would add some of the intangibles like responsibility and easy access to work friends. They’re worth something, heh.

    • retirebyforty May 8, 2012, 5:22 pm

      Enjoy your job while you can. 😉

  • Roshawn @ Watson Inc May 8, 2012, 9:42 am

    Great post from the other perspective. It’s one of the things needful in so much of the entrepreneurial literature: a balanced perspective.

    • retirebyforty May 8, 2012, 5:23 pm

      We have to see it from both sides so we can be ready for any surprises. Preparedness is key to success, right?

  • Shawn May 8, 2012, 10:29 am

    I was lucky in that my job (teaching) allows me time to follow my dreams and still work. I get the summers, spring break, Christmas break and other various holidays off to do things that I couldn’t do with other jobs. I didn’t choose to go into my profession for this benefit but I take advantage of it.

    I have also started a few businesses as well. I think it is important to point out, although well worth it, the first several years of running your own business is usually much more work than being employed by someone else.

    Shawn @ Managing The Money Wars

    • retirebyforty May 8, 2012, 5:24 pm

      That’s great to hear. I would love a bit more time off annually. My parents were always self employed and you’re right, it’s much more work than just collecting a paycheck.

  • I’m glad you wrote about this because so many other bloggers write to follow your dreams but don’t show you all the hardships you will run into and that you may end up back where you started but a few years behind. Thanks for the thought provoking post!

    • retirebyforty May 8, 2012, 5:33 pm

      Lately, I’ve seen people going back to full time jobs after a stint at blogging so I thought it’s time to write about the difficulties. It’s not easy to be self employed.

  • CultOfMoney May 8, 2012, 10:02 pm

    Personally I think it requires a pretty big nest egg before you follow your dreams after your 20’s. Once you have a kid, a mortgage, and the other trappings of responsibility, everything becomes much more difficult. I think it is very wise of you to realize this and hold off on the “announcement” until you’re sure you’re ready. You know what’s best for you.

    • retirebyforty May 9, 2012, 3:37 pm

      How do you decide what’s big enough? It’s almost impossible to a regular Joe replace his income with earning from the nest egg. The only way to do it is to cut expense and maybe work part time. It’s not easy.

  • Shilpan May 11, 2012, 10:21 am

    Key is to first build a business on the side Joe. I work in IT but — since 1998 — I have invested in hotels. So, in 2006, I quit my consulting gig with Acccenture when I was told to work overseas. I didn’t work for 3 years. In that time frame, I acquired additional hotel. But, in late 2008, when hotel business was slowing, I decided to get back into the corporate world as opportunity was great. The best thing happens with this approach is that you make decisions without being pressured by circumstances. I love my work, but I can walk away any day since I have six figure residual income on the side.

  • Invest It Wisely May 11, 2012, 7:10 pm

    A lot of great tips, Joe, and in one sense it gets harder as you get older as you have kids, more duties, etc… but at the other hand it gets easier because you have more fixed assets and more passive income.

    Where I am in life right now, I don’t have assets to generate passive income (I have a bit of retirement savings and stuff like that, but that’s not a passive income generator), but at the same time, I don’t yet have kids. So, now’s a good time as any. Even though I took a big pay cut and haven’t regained my income yet, I still don’t regret it one bit. I think one year to regain most of your job income and a second year to surpass it is a reasonable plan.

    The girlfriend makes fun of me though! So, partners on board is good but be prepared to get poked a little. 😉

    • retirebyforty May 11, 2012, 8:34 pm

      Most people are living paycheck to paycheck and haven’t been able to build up a good passive income stream. That’s why it gets harder for most people as they get older.
      I think it’s the perfect time for you to take the risk. I’m sure you can regain your income at some point. Hope you can do it in one year, that’s ambitious!
      OK, thanks for the warning about the Mrs. 🙂

  • 30sAndRetired May 27, 2012, 4:45 am

    Great post and it covers all the basic steps.

    I am in my mid-30s. I am an American-Turk. I am an engineer with a Master’s degree from New York. I am happily married and I am the father of a wonderful 7-year-old son (as of 2012, do the math if you are reading this later). After working 10+ years for others including as a hands-on engineer and later as a supervisor, I resigned to join forces with my wife to run our IT/Web consulting company full time where I was working part-time since 2003. We work from home, and plan to travel overseas since our business does not require being psychically anywhere as long as there is an Internet connection.

    Healthcare was a big concern before I resigned and COBRA is our healthcare choice for now.

    • retirebyforty May 31, 2012, 8:54 pm

      That’s great! What’s the long term plan for healthcare?

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