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.
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.
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.
X Factor – Starting Your Own Site
It’s been around six years since I started Financial Samurai and three years since I left my corporate job in 2012 to focus on Financial Samurai full-time. I’m actually earning a good passive income stream online nowadays. The top 1% of all posts on Financial Samurai generates 31% of all traffic. The average age of the top 1% posts is 2.3 years old. In other words, after putting in the hours to write some very meaty content over two years ago, 10 posts consistently generate a monthly recurring income stream that’s completely passive.
If you enjoy writing, connecting with people online, and enjoying more freedom, see how you can set up a WordPress blog in 15 minutes with Bluehost. It’s cheap and easy to start.