A couple of weeks ago, I had coffee with Alice who is thinking about quitting her corporate job. She works more and more with people 10-14 years younger than her and pretty soon, they will have learned everything that she knows. She is stressed out at work and she wants to start her own business. Alice read my story about being a senior engineer and it resonated with her because there are many parallels. At this point in her life, she’d rather find a more flexible job, take a pay cut, and build her own business.
Quitting a stable job is never an easy decision. There are many obstacles to leaving those regular paychecks behind, but the first thing Alice needs to tackle is to convince her husband to get on her side. Her husband thinks she should double her efforts at work and try to turn things around there. Her boss wants her to be more assertive and control her colleagues more. I agree that she should try to improve her performance at her day job, but I sense that she really wants to give her business a go.
When I first told Mrs. RB40 about my plan to retire by 40, I was met with skepticism and incredulity. Her family had low income for many years when she was growing up and she placed a high value on financial security. In addition, she was 5 months pregnant at the time so imagine how she felt when she heard I wanted to quit my job. Anyway, it took time, but I got her on my side and here is how I did it.
I don’t know if it’s like this in your family, but it’s quite difficult for us to talk about serious subjects. Mrs. RB40 knew that I didn’t like my job much, but she thought it was the same general malaise that afflicted all workers. I had to make it clear to her that the job just wasn’t the right fit for me anymore. I shared my annual reviews with her and she saw that I was doing worse and worse every year. My physical and mental health was deteriorating and she could see that the job was taking a big toll on me.
Basically, I had to overcome the mental barrier to “take it like a man” and open up to Mrs. RB40. By communicating clearly and making a case to show her that I’d be much less stressed, she came around and agreed that our family would be better off without my old engineering career. After all, it’s better to have me around for the long term than losing me to a heart attack or something equally dreadful.
So for Alice, she has to convince her husband that life will improve after she quits current job. She has to have a serious discussion with her husband and show why her job is not the right fit for her anymore.
Life goes on without a paycheck
Once Mrs. RB40 got on board with the idea of quitting, then it was time to figure out how to do it financially. We’d lose 2/3 of our income when I quit so that was a big reduction. Luckily, we always lived below our means so our monthly expense was not very high. Our plan was to reduce our expense as much as we could and increase our income through various means. Here are the steps we took.
- Track your expenses – This showed us what we spent our money on and we cut back on things that weren’t important. We got rid of cable TV, switched to prepaid cell phones, cooked at home more, got rid of one car, and generally lived a more frugal lifestyle.
- Increase cash flow – I shifted the stocks in our taxable account to dividend paying stocks. This created extra cash flow. We increased rental income by acquiring an additional property. I also started making online income from blogging.
- Saved 1 year of expense in a saving account – We saved $50,000 in our saving account as a backup. This gave Mrs. RB40 some peace of mind. If things went badly, we could still function for at least a year while I try to find a new job.
- Saved and invest all the income from my paycheck for a year – This year long test run showed that we could function without my paycheck.
- Health insurance – We made sure that Mrs. RB40’s insurance would cover me and junior. Having one spouse working full time is good in this case.
Alice mentioned that she is willing to work a lesser paying job (part time?) to make ends meet while working on her business. That’s good, but I’d like to see her do other things on this list too. It would be nice to have one year of expense in a saving account so they’d have time to find work in case her husband loses his job for some reason.
Set a timeline
Many entrepreneurs give themselves a certain amount of time to work on their business. Alice can devote one or two years to building her business and if things didn’t work out, she could go back to work in her old career. Her husband probably would be more receptive with some kind of timeline. They could see how well the business does in one year and figure out if it’s worth it to continue pursuing her dream. One year really is a very short time.
What’s the worst case scenario?
Lastly, they’ve got to ask themselves – what’s the realistic worst case scenario? What if Alice’s business didn’t work out after 2 years? Could she go back to work in her old career? Would her skills be outdated? Her business will be in the same industry so I’m not sure what the ramification is. I’d imagine that employers would prefer an entrepreneur with some business experience, but I’m not familiar with her industry.
Of course, I’m a little biased because I think everyone should try following their dream. It worked out for my family and I think it can work out for others too. I’m an optimist. The most crucial thing is to work as a team. If Alice’s husband doesn’t support her decision to quit, then there will be a lot of conflicts in her family and it will be even more difficult to succeed in starting a business. Follow some of these steps above and see if he’ll come around.
Do you have any advice for Alice? What else can she do to convince her husband to support her decision to quit?
Photo credit: flickr christie_verbose
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