Mistakes I Made When Quitting My Job

BMX Biker

A potentially nut crushing mistake

After spending two years writing a 100-page book on how to profitably quit your job, you’d think I’d have executed everything to perfection. The negotiated severance package could literally pay for 72 months of around the world travel. By the time I returned all grizzled and gray, I’d have an increase in savings to boot thanks to passive income from real estate, CDs, dividends, and private equity.

The fact of the matter is I made some mistakes which I’m now kicking myself for missing. One could blame my naivity for not further maximizing my severance package. But, ignorance is no excuse for anything. Ignorance is an excuse for the weak and unprepared.

When it comes to engineering your layoff, you must meticulously plan. Every single mistake you make is a learning experience. It doesn’t matter whether the mistakes are made in contract negotiations, investing in the stock market, or buying real estate. We are all bound to make mistakes. It’s what we do after the mistakes that counts.

FOUR MISTAKES I MADE WHEN LEAVING MY JOB

1) Not using sick days as vacation days. I find sick days to be for wussies who drink too much the night before and are too lazy to come in the next day before everybody else. It was so annoying to see staff call in sick on a Friday or right before/after a holiday. Managers know when you’re lying about your illness. For those of you who like to call in sick, you’re putting your career at risk. Ironically, this may be ultimately what you want to do!

Unless you are deathly ill, you have the ability to come to work. Lucky for you times have changed. We’ve become a softer society that coddles our youth and holds each other’s hands while competitors eat our breakfast, lunch, and dinner. Just like a convenience store employee doesn’t get paid enough to stand up against a robber, your colleagues don’t make enough to accept catching your cold. They will be pissed if they start hacking up a lung the next week. Read “Never Call In Sick On A Friday, Slacker!

The great thing about leaving your job is you get all your vacation days paid. The value of each vacation day is worth the value of each salary day. In other words, if you make $10,000 a month and have 30 days of vacation carryover days, you will get a $10,000 gross check! On the other hand, sick days have no value. They are a non-transferrable benefit.

I was one of those workaholics who was too proud to use “not feeling well” as an excuse to not come to work. I loved my job for the first 10 years and wanted to get in on the action every single day. If I didn’t go to work, I felt like I was falling behind. Besides, I never got that sick either. I would at least come in for three hours and then go home. Over the last 10 years at my previous employer, I probably took a total of eight sick days, half of which was because I woke up late and was too embarrassed to come into work.

Two months before I decided to engineer my layoff, I decided to take a five day vacation to Hawaii. With flights only costing $315 round-trip, I just had to go. If I was smart, I would have just swallowed my honor and called in sick if I knew I was leaving the firm. My integrity cost me thousands of dollars less in severance. Do you think I did the right thing about being honest? I had 132 sick days to use over the course of 11 years and only used eight of them. Perhaps if I didn’t manage an employee who took 10-12 sick days a year for five years in a row, this point would have never crossed my mind!

2) Not using my corporate credit card rewards points. Only until the fourth month after I engineered my layoff did I remember my 105,000 American Express rewards points I left behind! I never bothered to use my corporate credit card rewards points consistently because I thought I would just hoard my points to one day buy something sweet like a set of new golf clubs for my father. Besides, I was happy using my Citibank ThankYou® rewards card for things such as a home movie theatre system.

105,000 rewards points equals about $800-$1,000 dollars of credit depending on what one buys. Whether you have a corporate card or a personal rewards card, never forget to actually use your rewards points for something. Credit card companies count on you to forget or never use your points to save them money. For your reference, the AMEX Rewards telephone number is: 1(800)297-3276. Funny enough, I just called them to see if they could claw back my points despite having closed my corporate card eight months ago. Thankfully, they said YES! I decided to use my points to get seven $100 gas cards, one $50 gas card, and one $50 Williams Sonoma gift card delivered to my door.

3) Not planning for even more opportunity. The main reason why I wanted to leave my job was so that I could dedicate all my time building an online business. I wanted to give entrepreneurship a good 12 months and didn’t want to have any regrets when I looked back on life. Since leaving my job, I’ve written a book, which has been a life goal of mine. I went to Denver to meet up with hundreds of bloggers at a conference. I’ve written two hundred more articles on Financial Samurai. My tennis team won the San Francisco tennis championships. Finally, I lost some stubborn weight. So far so good right? Well, it could have been even better.

The first several months after retirement were as busy as ever. I was anxious to do so much of what I couldn’t do while I was working that I probably worked even more. I was so caught up in my own business and travels that I failed to branch out to see what else was out there. Sure, I talked about getting a PhD and enlisting in the foreign service. However, what I didn’t realize was that there are plenty of programs that fit my interests in business and communications perfectly.

For example, Stanford University has a fellowship for mid-career journalists who want to spend 10 months working on a personal project that will help the rapidly changing media industry. Here are their words, “Our fellows are in the vanguard of 21st Century journalism: men and women who will be forces for innovation, entrepreneurship and leadership. Fellows spend their year experimenting, testing and creating ideas and prototypes that enable them to be effective innovators immediately and for years to come.” I’m not the typical candidate given I don’t have a journalism background. However, given my years in finance, my thirst for entrepreneurship, and the desire to evolve the Yakezie Network into something greater, such a fellowship might be a great fit. Here’s my proposal on how bloggers and journalists can help each other thrive through the Yakezie.com platform.

If I timed my exit better, I would have applied for a fellowship in the fall of 2011 for the entering class of 2012. Instead, I didn’t find out about such fellowships until the summer of 2012, making me only eligible only for the class of 2013, a full 1.5 years after I negotiated my severance. Although the acceptance rates for such fellowships are only around 6%, we all know we miss 100% of the shots we don’t take. It’s best to put in the effort now for the chance for opportunity in the future.

4) Not getting life insurance. I received 5X my base salary in life insurance through my employer for the past decade. I continued to receive employer provided life insurance for the three months WARN period. However, I completely forgot to get an equal amount of term life insurance once my life insurance ran out for the subsequent five months! In other words, between the time my WARN period finished and now, my loved ones would not have received any significant life insurance money. I do have a small term policy I took out a while ago for $50,000, but $50,000 won’t last someone very long in San Francisco.

It’s actually kind of scary to think I totally forgot about getting new term life insurance that matched my old employer policy. But, perhaps it’s logical since I do not have any children yet. Furthermore, my liquid to semi-liquid assets are more than my debt obligations (positive net worth), so in the case of my death, my beneficiary can simply sell all my assets. However, if I die I don’t want my beneficiary to have to turn her life upside down because she will already have to deal with a difficult loss.

I now have a new term life policy that is equal to my old employer provided life insurance policy. The right amount of life insurance depends on each individual. I recommend everybody also look to get an umbrella policy if you have significant assets worth protecting.

Recommendation: AIG is one of the leading life insurers in the world with the most competitive rates. Click here if you are looking for Term Life Insurance for as low as $15/month. Term life insurance is the cheapest and best way to keep your family protected. Term provides your family a way to help pay off debt, fund your child’s education, or make up for your lost income.

LEARN FROM MY MISTAKES SO YOU DON’T MAKE THE SAME

Some of you might say these aren’t all mistakes because the first one is a moral issue which I chose not to cross while the second one turned out to be fine since I was able to redeem all my points. I really do think the third point is an error on my part for not planning enough. A fellowship sounds perfect for my interests but it’s a long ways away. So much can happen from now until then. The point is that we need to constantly be on the look out for new opportunities and plan!

The only thing I can do now is continue thinking about my future and make sure I am doing what I really want to do. I told myself in “A Day Job Is So Much Easier Than Entrepreneurship” that I would give myself until June, 2013 to make a decision on whether I want to continue focusing only on my entrepreneurial endeavors or do something else. Right now I’m considering a fellowship, joining the foreign service, or returning to the financial world as a backup. Let’s see what the future holds.

The one message I cannot stress enough is to never quit your job without negotiating a severance and thoroughly exploring all options beforehand. Plan and plan some more so that you have as long a runway as possible to pursue your dreams.

Regards,

Sam

How To Make Money Quitting Your Job

Sam started Financial Samurai in 2009 during the depths of the financial crisis as a way to make sense of chaos. After 13 years working on Wall Street, Sam decided to retire in 2012 to utilize everything he learned in business school to focus on online entrepreneurship.

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Comments

  1. says

    I had never really thought about the corporate credit card issue until a few months ago when a friend was leaving his job and was telling me how he was debating on how to use his AE points. I think he had roughly the same amount as you.

  2. says

    “The great thing about leaving your job is you get all your vacation days paid.”

    This varies by company. My current company has two different pools of vacation time. One bucket fills up at the beginning of the year and you draw throughout the calendar year. Anything left at December 31st is surrendered, and it’s also not payable upon leaving the company. The other bucket adds 4 hours of time per pay period. It caps out at 96 hours but it rolls continuously, and the time left upon leaving the company is paid out.

    Unless there are laws in California that mandate that vacation is paid, I think you have to look at each company and each HR policy for that company to understand this.

    • says

      MB, yes there is a law in California mandating vacation to be paid when an employee departs. The number of days one can accumulate probably vary from state to state. Easy for each person to look up.

  3. CDP45 says

    Those aren’t huge mistakes, but I agree with your feelings about sick days and I think that the concept of a sick day was created when women started entering the workforce.. Luckily we just get FTO where I slave at.

  4. says

    I’m actually really impressed that Amex let you cash in the rewards points on a card that had been canceled for 8 months. Good job by them, I guess it goes to show it can never hurt to try!

    I’m with you on sick days, I think I’ve used maybe 2 or 3 in the past 6 years. I don’t know that I should use them more liberally, but if I knew I was leaving the company in a few months time I would probably start to do so.

    • says

      I was pretty shocked myself. Remembering my AMEX points just hit me one day and I figured why not try and ask. I was a member for 10+ years, so I’m glad they didn’t pork me, even if I did shut the card down months ago.

  5. says

    Thanks for the tip about AMEX rewards. I just called them up to get some details. So far, it doesn’t look like I spend enough corporate money to justify the $90 annual fee. But as I move up in the company they may want me to travel more and the fee might be worth it.

  6. says

    Interesting. I had assumed AMEX credit cards points just belonged to the company. I’ll need to check my status as I’m sure I’ve racked up a ton on these points with extensive travel. Thanks for the tip.

    • says

      It depends if you pay your expenses and get reimbursed, or if the company pays the bill and you file an expense report. If it’s the former, than you own the card as it goes under your credit file. You also have to pay the annual fee.

  7. JayCeezy says

    Great pic! Thanks for the laugh.

    Your book is great, and I am currently attempting to implement several of the strategies with the ends in mind.

    The “sick days” is something you may be being a little rough on yourself. First, everybody has a price, but a few thousand dollars is not your price. Second, the idea of “sick days” is intended for just that purpose; your employer is attempting to provide a benefit for that purpose. You are right not to take advantage; your employer was pretty good to you on the way out, and you were pretty good to your employer during your service. No need to gild the lily, you did the right thing.

    • says

      It’s interesting though… for if I add 11 years work of sick days, that’s 132 days of which only 8 I used. Hence, theoretically, that’s like “losing” 1/3 of my annual base salary if I could carry over all those days as vacation days. Fun theoretical thought process.

      • says

        I love this idea, and I wish I had leveraged it during my corporate days! Another thought is to make sure you use up all your insurance benefits before moving on to a new plan, new employer, or new entrepreneurship venture. For example, when I quit my job at a big company, I got $300 orthotics made, a new pair of prescription sunglasses, and a 90 min therapeutic massage – all for $0 out of pocket. :)

  8. says

    Don’t beat yourself up too much! There is no perfect negotiation and hopefully the money left on the table is very small. I have the same philosophy regarding sick time! I am fortunate that I can save it for retirement. Over 11 years, I accumulated 125 days. By the time I retire, I will be able to add a year to my retirement years.

    • says

      Accumulating 125 days, or 365 days of sick days…. now THAT is a benefit teachers and many public workers should cherish! The private sector can’t hold a candle to those type of benefits + a pension!

  9. says

    Sam,

    It never fails…hindsight is…you know the rest. That’s the beauty of life though, my man.

    So I will be quitting my job REALLY soon. Funny enough, I have 30 sick days. I am the same as you…I feel like a tool using them. But I will think about this for sure.

    That said, you have a done a ton for ALL of us over this time. And we thank you!

  10. Mike Hunt says

    Hi Sam,

    Great points in this post. Mistakes are great things to reflect on as lessons learned.

    I am curious about your life insurance point. Are you married?

    -Mike

  11. says

    Mistakes are just a part of life. It’s what you do with those mistakes. If you fix the mistakes that you have made, then you are good. If you don’t, then it becomes an issue. You have to be willing to focus on the solutions to the issues that arise. But good for you for admitting faults-something I admire in people. I’ve noted your solutions for my own use.

  12. says

    I can see why you would consider those mistakes – there are definitely opportunity costs associated with each of those points. I don’t think you should be too hard on yourself though because the “mistakes” you made were really life things that you were figuring out along the way. I have to imagine that when you made the transition initially there were lots of other life issues you didn’t miss that made quitting your job the success it has been, right? I think that this is a great cautionary tale, insisting that people not just plan for the transition but really try to weed down how it’s going to affect the day by day changes in your life :)

    • says

      Nunzio, you win some, you lose some. Hopefully this post helps others win some more. The transition out is really complicated, hence my book and my series of posts.

      Overall, I feel fine. But, I want to present the losses as well so readers know that I make plenty of mistakes as well.

  13. says

    That’s good you didn’t lose those corporate card point! I just got a notice that I have 18k miles that are going to expire soon. It’s easy to lose track of those things so best to use them while we can. And as for sick days I find it so obvious when people are faking!

    • says

      Depending on the plan, you can sometimes prevent the miles from expiring by doing a small ‘activity’ like redeeming some points, buying some points, or using one of their partners. For example, I have 30,000+ Air Canada Aeroplan miles, but don’t often fly. To keep my miles valid, I simply ‘redeem’ a tiny amount (500 miles) and donate it to a charity. Win win! :)

      • says

        I think there may be an option to make a small purchase from an affiliate vendor to extend the miles too. I feel like I did that a year ago. I really should try to fly with them next time I travel and try to get up to 25k. Or figure out if it makes sense to purchase the missing miles I’d need to get a flight out of them. That just feels weird though.

        • says

          I feel the same way about buying miles. The whole flight reward system could be much simpler, don’t you think? Networked airlines, expirations, promotions, ineligible dates, non-transferability… it seems more overhead that it sometimes might be worth.

  14. says

    You don’t have any dependent so I don’t think the lapse is that bad.
    My mistake was quitting a bit early. I guess I could have stuck it out for 6 more months and negotiate more. I couldn’t take it anymore though. It wasn’t all bad though because I sold all my options and a bunch of stocks before I quit. If I waited until 2013, I wouldn’t have made as much because the stock dropped like 25%.

    • says

      In your case, it just sounded like you had to live for your health and sanity’s sake.

      In my case, I could have just cruised on for at least another year, but I didn’t feel it was fair to myself, to the company, and to potential colleagues who all worked very hard.

  15. says

    Thanks for sharing your insight Sam! Great point on the life insurance, a point I think we all too often overlook. We actually just got my wife another $50k in term through USAA. She called for a completely different matter and they offered it to her with no questions asked for $5/month.

    I also left my job nearly a year ago now to help run my wife’s business and I could not agree more on the planning and then planning some more. Everyone is going to make mistakes, we’re all human after all, but the planning can help you go much farther.

  16. says

    My employer has relabelled our 7 sick days as personal days. You can use them if you are sick or as floater holidays as long as you book them in advance. It means that people can be honest with their boss and take a day when they need it. No sneaking around or feeling guilty. These personal days recognize that we have lives that we can’t always fit around our work schedule.

    A woman in my department just took a day because her son was having his wisdom teeth out. She booked the day off several weeks in advance and was not penalized.

    At the end of the year we get paid out for any unused days. Life is short and I plan to use mine for extra long weekends -with advance notice of course.

  17. says

    I never knew that sick time was not paid out along with vacation time. At my job, we aren’t part of California’s disability insurance system, so I actually used most mine up during Family Medical Leave when my daughter was born. I’ll plan on using the rest for the same before I leave.

    As far as life insurance, I know that employer provided life insurance is age banded and increases in cost as you get older. Do you think it’s more cost effective to insure through the employer (if you plan on staying for the long term) or just get your own term policy and pay a level premium for the life of the policy?

    • says

      I guess it all depends on the costs as it’s different for everybody.

      My base was rather large after the 2008-2009 crisis (gov’t wanted finance sector people to earn less bonuses, so our bases just went up by 60-100%). Put a 5X multiplier on that, and my insurance was good enough, and was very inexpensive to boot. My employer had very generous insurance programs.

      For health insurance, I’d check with eHealthInsurance online. They are based here in the Bay Area and have the largest network of health insurance partners to offer the lowest quotes.

  18. Ron Anthony says

    Hi Sam,

    What are your thoughts about a voluntary buyout?? Is it better to stay in the safety of a corporate job or should the cash incentive (one year salary plus health care coverage for 3 years) be enough to jump ship and explore other options – even if you’re unsure what you will be doing post buyout??? BTW, In this case my company has promised no to lay off people if they don’t take the buyout. It’s purely voluntary!!

  19. Tim says

    I just quit my 6yrs long job and I’d wish I had found your Book and Blog a lot sooner. I also am living in San Francisco, so the cost of living is up there. Now, I’m traveling and figuring out my next step without severance.

      • Tim says

        Thanks and I was one of those that jumped straight into the workforce 9 years ago.

        And I love reading your blog because being a native San Franciscan, I can sort of relate with your stories.

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