Life After Negotiating A Severance: The Quest To Work 20 Hours A Week And Make $200,000 A Year

Having A Beer At The Top Of SantoriniMy ideal amount of working hours a day is four. A good four hour workday for me is probably working from 7:30am to 10:30am and then again for an hour during the evening to interact with international clients. I'll fill the time in between with exercise, eating, entertainment, and family.

The ideal amount of income is $200,000 a year, where you don't get raped too hard by the government and only pay about $40,000 a year in Federal taxes, assuming you have zero deductions. $200,000 or less is my idea of Going Galt. If you individually consume less than $20,000 a year of government resources, you are going to be hard-pressed to feel good spending double that amount year in and year out.

I told everybody that I've “reset to zero” and plan on achieving my 20/200 goal in three years from the ground up. My initial question to you is:

Should I disavow all the savings and investing I did for the past 13 years that currently funds 100% of my retirement? 


I've decided to lay things out in two charts.  The first chart incorporates my existing passive income stream along with realistic “New Journey Income” goals that total no more than 20 hours a week of work.

PASSIVE INCOME Amount A Month Amount A Year Time Spent A Week Time Spent A Year
CD Interest $3,000 $36,000 0
Public Equity Dividends $1,500 $ 18,000 0
Private Equity Dividends $500 $ 6,000 0
Rental Income $2,200 $ 26,400 0.1 hours 5.2 hours
Sub Total $7,200 $86,400 0.1 hours 5.2 hours
Income Gap (Goal) $9,466 $113,600 19.9 hours left 1,034.8 hours left
Advertisement Income $5,200 $62,400 5 260
Book Writing Income $1,300 $15,600 4 208
FS Online Services Income $2,000 $24,000 2 104
Freelance Income $1,000 $12,000 2 104
Content Generation $0 $0 5 312
Sub Total $9,500 $114,000 19 hours 988
GRAND TOTAL $16,700 $200,400 19.1 hours 993.2
Income Differential ($34) ($400) 1 hour left 46.8 hour left

Some notes to review:

* Rental income: Hardly takes any time because my main rental is in great shape and I spend about three hours vetting my tenants like the CIA. The average turnover for my city rental is once every 2.5 years for the past 10 years.  I have another vacation rental which takes no time because it is professionally managed. I can increase my rental income if I start actively renting out the property and avoiding the rental program commission, but I'm focused on other businesses at the moment.

* Passive income: The overall passive income is what it is. The income can be used to fund my retirement forever, and not touch the principal if I'm comfortable with $7,200 a month gross. Or, it can be used in calculating the 20/200K goal as we are now.

* Advertisement income: With my site's existing metrics, $5,200 a month in advertisement revenue through banners, clicks, and affiliates should be doabl now or within the next 3 years. I've just got to focus more on the monetization aspect of blogging. I want to be careful not to flood the content with just affiliates and only highlight products I support and use. Everybody should start their own blog today. Here's my step-by-step tutorial on how to start a blog.

* Book writing income: After releasing my 2nd edition in 2016, “How To Engineer Your Layoff: Make A Small Fortune By Saying Goodbye” now generates about $2,500 a month, or $30,000 a year in passive income! There is no other book on the market, yet there are millions of people who want to change jobs, quit their jobs, go back to school, retire early or change lifestyles.  The key is to continue writing high quality, relevant content that relates to my book.  After about six months, organic traffic will really start pouring in.  I plan on writing one more book in the next three years.

* FS Consulting: I now take on 3 clients a month. This is not passive income at all, but it is very rewarding. Here is my Money Consulting Page for those interested, but there's a large backlog as of 2019.

* Freelance income: This income is pretty random and can come at any time. Freelancing could consist of organizing a marketing campaign, speaking, writing posts, and so forth. This is the biggest X factor in terms of income I did not anticipate 4 years later after I first wrote the post. I've consistently made over $100,000 a year freelancing since 2013 with various financial technology companies here in the Bay Area. Namely, I consulted with Personal Capital for two years, Motif Investing for 1.5 years, and a Y Combinator seed startup for 6 months.


In the chart below, I've excluded all passive income towards the $200,000 a year goal. The passive income will now be used for savings instead. Without my ~$86,400 in annual passive income, clearly I've got to work harder and smarter to achieve $200,000 within three years.

PASSIVE INCOME Amount A Month Amount A Year Time Spent A Week Time Spent A Year
CD Interest $3,000 $36,000 0 0
Public Equity Dividends $1,500 $ 18,000 0 0
Private Equity Dividends $500 $ 6,000 0 0
Rental Income $2,200 $ 26,400 0.1 hours 5.2 hours
SAVINGS $7,200 $86,400
Advertisement Income $11,000 $132,000 5 260
Book Writing Income $1,500 $18,000 4 208
FS Online Services Income $3,200 $38,400 2 104
Freelance Income $1,000 $12,000 2 104
Content Generation $0 $0 7 364
GRAND TOTAL $16,700 $200,400 20 hours 1040

Some notes to review:

* Content Generation: I've upped the hours spent generating content by 40% from 5 hours a week to 7 hours a week. Content is key to generating traffic, and traffic is key to generating advertisement income.

* Advertisement Income: Income increases by roughly 100% with a 40% increase in content generation.  Leverage and the perpetuation of existing content are the key reasons for this 2:1 increase. Each article that is generated online stays online and generates its own traffic. The higher the quality the articles, the more traffic.

* FS Online Services Income: Here's a tough one because I've essentially kept my hours of work the same. The reason why I'm estimating a 55% increase in income is due to the increase in my hour rate.  $3,200 / 8 hours = $400 an hour from currently $200-$300/hour, depending on project. Sounds aggressive, but that's the three year goal.

* Freelance Income: I've kept this income the same because I'd like to focus more of my time on FSOS. The great thing is, the longer one sticks around, the more freelance income arises. You've got to be in the game to win it, so don't give up too soon!

* Online Traffic: If it's taken three years to generate ~250,000 pageviews a month in traffic, it should be feasible to generate 500,000 pageviews a month by 2016.  Then again, anything can happen thanks to the whims of the web. I'm hoping 500,000 will be a conservative figure. Writing How To Engineer Your Layoff really super charged my visitors by 30-40% a day.

* X Factor: There is always an X Factor in life that correlates highly with effort. If you're in a good situation already, there is generally not a detrimental X Factor. If you do no work, you'll just stay in your good situation. If you increase your effort while you are in a good situation, there could be a huge positive X Factor on the horizon which you cannot foresee.


It's quite liberating to write and chart everything out. Goals always seem to be a stretch when they are just said with no clear plan.  Working 20 hours a week generating $200,000 a year won't be easy. However, the journey itself will be the biggest reward, whether I make that type of money or not.

Even if I don't achieve $200,000 a year, I know I will achieve at least one half of the goal by working 20 hours a week or less. Thanks to my passive income stream, the ability to kick back and drink mai tais on the beach is 100% in my control!

The 20H/200K goal is really a sub goal. The real goal is to comfortably take care of my immediate family and spend as much quality time living life on our own terms. By only spending 20 hours a week working and making $200,000 a year, I think we'll be able to have the best life possible.


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The best feature is their 401K Fee Analyzer which is saving me over $1,000+ a year in portfolio fees I didn’t know I was paying. The future is never going to be certain. But at the very least, we can stay on top of our money so we’re prepared for whatever comes at us. Personal Capital only takes a minute to sign up and it’s free. No other tool has helped me reach financial independence more than Personal Capital

Negotiate A Severance Package: Never quit your job, get laid off instead if you want to move on. Negotiating a severance package provided me with six years worth of living expenses to help me focus on my online media business. Check out my book, How To Engineer Your Layoff: Make A Small Fortune By Saying Good-bye. The book provides solid strategies for how you too, can escape a job you hate with money in your pocket.


It’s been over six years since I started Financial Samurai and I’m actually earning a good passive and active income stream online now. I never thought I’d be able to quit my job in 2012 just three years after starting Financial Samurai. But by starting one financial crisis day in 2009, Financial Samurai now makes more than $200,000 a year.

If you enjoy writing, creating, connecting with people online, and enjoying more freedom, see how you can set up a WordPress blog in 15 minutes.

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You can start your site for next to nothing and potentially make a lot of extra income. This is a real example.

Updated for 2019 and beyond.

45 thoughts on “Life After Negotiating A Severance: The Quest To Work 20 Hours A Week And Make $200,000 A Year”

  1. Hello. I just came across your blog because of startup digest. Congrats on going solo.

    I like others would challenge you to not include your passive income. I think you can and will get to your goals starting from 0. Here’s my 2 cence, both general and specific:

    – Read “Getting Everything You Can Out of All You’ve Got” to better leverage yourself.
    – Your hours on Advertising are a waste. You aren’t an advertising expert. Or a blog monetization expert. And nor do you ever need to be. Outsource this to a person or service whose expertise and job is to maximize your advertising revenue on your website. That will likely increase your total revenue by at least 20=30% (because they will do it better than you and that will pay for the service), and shave your hours down to at most 1 per week to discuss strategy and review results with them.
    – Your’re a finance expert. Leverage your audience and get our there. You have not mentioned this in your plans. Webinars, training, and speaking engagements can be high revenue, low hours. And passively build your base, readership and book sales even further.

  2. The Financial Blogger

    Hey Sam!

    sounds like a nice plan! In order to start increasing your monthly income, consulting is definitely interesting at the rate you charge but it’s hard to scale. The most you can do is 20 hours x $250 = $5,000… wait, you could only do that and make your 200K per year! that sounds like a plan :-).

    I agree with most other readers to include your passive income. after all, money is money, no matter where it comes from!

    I’d like to know what happen in the past 4 months between numbers showed here:

    and the current numbers posted in this article.

    #1 it seems that you have increased your dividend income by 67% in 4 months, can you tell me your trick?

    #2 what happened to your rental income? why did it dropped by $300/month?

    #3 How were you able to increase your interest income generated by CD’s? did you invest another 80K (at 3% it makes the difference) in that?

    also, regarding rental income, is the 2,2K/month is net or gross?

    good luck with your goal!

    1. The answer is: More money after engineering my layoff! That was a huge windfall after a month of negotiations. I’ve been slowly trying to explain the importance of never quitting and always knowing your rights.

      I also invested $180,000 in the stock market via structured products (see the structured products post of investing up to 250k) when the Dow was at 12,400 or so.

      Rental income is net after all taxes and fees. Will go much higher if I decide to pay off the retal mortgage but it is a complete tax shield.


  3. The sad part of this is that you have to limit your income goal to only $200k when you are clearly capable of more. Thanks U.S. tax code for punishing the high achievers.

    1. Don’t worry, I won’t be too sad if I achieve my goals.

      As I’m currently in St Petersburg, Russia, I am beig convinced that towing the party line is good for all comrades!

  4. Kim@Eyesonthedollar

    I’m pretty new, but you seem like someone who enjoys a good challenge. I would not include the passive income and start from true zero. I bet you can do it.

  5. You have worked hard to build the current passive income stream, so there is nothing wrong in including that. But I know that you will hit your goal without the current stream included. It’s great that we all can get inspired by FS.

  6. Is it easier to go from 250k page views to 500k than 0 – 250k? Is there some sort of “wall” sites hit when they’re single author sites? I don’t know, just asking questions.

    I think KC is on to something. What will make you happiest? If you don’t include the passive income, you’ll have to stretch. For me, that’d be the fun route. However, if you’re enjoying NOT stretching in those areas, then pad it. Knowing that you’re not going to be counting on all of your passive assets for income today may allow you to revisit your asset allocation and capture higher gains, too, right?

    1. Good question. I would think with increased Internet penetration and more FS articles populating and becoming anchor posts, getting the next 250k will be easier than the first just like making the second million is easier than the first bc of the foundation.

      The point of my 20/200 goal is so that I don’t goof off TOO much. This is clearly not a life or death goal, but something fun to shoot for. Who knows, might change in a year or three.

  7. Honestly based on the title of this post I thought it was going to be another post promoting your book. I was ready to hate it. Then you slapped me in the face with the kind of transparency that I love to read. This type of post, and other posts that detail your multiple income streams are the reason I really like your website.

  8. Darwin's Money

    Have you thought about just putting more of your money toward rental real estate and going more in that direction? Seems like since you’re already free of the day job, you’d have ample time to dedicate to dealing with tenants and other RE issues that many full-timers struggle with.

    1. Only if he wants to… I know a real estate guy that owns dozens of properties, has dozens of custom suits, and also multiple ulcers at age 39. Is it worth it?

    2. Maybe.

      My primary rental mortgage is at 3.375%, hence once my 4% CDs roll off in 3-4 years, if I can’t find somethig similar, I will probably just pay down the rental mortgage.

      I’m considering buying a 4 unit building for rent, but I need 35% down and don’t want to buy in the boondocks or Vegas where the real value is. I’m going to try and focus on online income the most until it is no longer feasible bc it’s more scaleable and fun!

      1. If you need someone to scout out properties with you in Vegas please do not hesitate to throw me an email!

  9. Including (almost) real numbers like this will definitely draw more to your conuslting services! Since I love playing with my budget like monopoly and challenging myself, if I were you, I would reset to $0 and not include your current passive income. You’ll be more motivated and end up making more money than if you inclue the $86k you already make a year.

    1. I’m not sure if I really want to spend more time on consulting services yet. I’m still searching for the balance. Btw, look out for a post this week on FS highlighting one of yours!

  10. I love the approach, but I think you need to stretch just a little bit. Which part do you think you are being a little too conservative and add 10 or 20% to the total. What outcome do you want in 3 years? Is it $200K or sufficient income as a published author? In other words which piece would make you happiest or is it just income? A couple months ago, you mentioned getting a PhD for example. Financial freedom is all about choices!

      1. Not necessarily! What is the most important goal to you? Is the goal too easy or conservative? If the total money earned is the most important, are the components too conservative? It is similar to doing a set of exercises that are so routine and easy they no l onger are doing anything for you. A little stretching (10-20%) makes it more of a challenge!

  11. You have tons of wiggle room, so in my opinion, it doesn’t matter how you calculate it. If you can teach others to do what you have done, your consulting should go through the roof. Keep us posted.

  12. RichUncle EL

    I would include the CD and the rental income as part of the 200K, It’s already there and you can later remove it if you hit all the start from scratch goals. You can also lower the income to 175K for the time being and make the goals less stressful on you short term.

  13. In due time indeed!

    You’ll surprise yourself with home much you can make after 3 years.

    I might update once a quarter or 6 months perhaps. Not sure yet. Once a year most likely for sure.

  14. Marriage Galt-ness is $250,000 or less because the government attacks couples who make more than that.

    I think a couple with two kids can live pretty well on $250,00/year even in SF and NYC provided they have a good sized Nut!

  15. Thomas, the thing is I don’t feel any stress either way, at least at the current time. Instead, I’m trying to create a little bit of fun and stress so I don’t end up being a bum!

    If I fail at the 200k goal, at least I will succeed at the 20 hours a week or less of working goal! Optimist!

  16. Even if you are earning 200k a year with our without the passive, my bet is you will still save at least half either way haha. You seem to be a saver and not a spender.

    1. Ryan, I have a feeling you are probably right!

      Everything is a game after clearing the subsistence level. I enjoy the challenges of both increasing earnings
      and saving consistently at various income levels.

      Living in a developed country really is a blessing bc life is easy compared to so many other places.

  17. I guess if you really live on $200,000/year then you should exclude your passive income. You already have extra saving even if you include passive income in the whole calculation right? The stretch goal will make you work harder though. Great job. :)

    1. I’m going to have a hard time actually spending 200k. Maybe if the kids start coming then it’s easy. But by myself, I don’t think I will ever spend that much.

      Yes, can’t touch the 401k for another 24.5 years so I’m not including it! Hope the government doesn’t steal it before then!

  18. I really do fear getting lazy and doing nothing in retirement, which is why I’m hesitant to include the passive income.

    The lure of being unproductive is very strong now that I’ve experienced it!

  19. I would include it. At the very least you have 86k to live on without doing anything. That’s like competing for a gold medal while you already have a silver medal locked as back up.

    1. Man, getting a silver kinda sucks, but just being an Olympian is awesome! Funny how that is right? Think about all the agony Lolo Jones is going through getting 4th, and she’s still making 5 mil+ a year from sponsors!

  20. I think it is okay to include your passive income. When you asked the readers “what is your ideal work load and salary”, I included my passive income (and my husband’s income) in my answer. You have worked hard to get that passive income so you might as well include it. Of course, if you do better than your original goal, it wouldn’t hurt.

    1. I guess as a married woman, including the husband’s income makes sense. I think it’s best to me tally not co-mingle though so as to keep one’s own financial drives on its toes. That’s just me though.

  21. I think which path you take is up to you and what you feel comfortable with. That said, it would be more interesting to see you make 200,000 from internet and blog related ventures! The hourly rate on your consulting services is amazing but I am sure you provide a ton of value.

    1. Yeah, I think it could be fun. I just don’t want to turn into a blog or blogger who blogs about how to make money online. Maybe a once a quarter update could be a nice balance.

  22. I think it’s okay to include your passive income that you’ve already worked for. The only challenge that I see in that is whether you will be able to get as high of interest rates in CD’s as you did a few years ago. What happens when your CD’s expire? Are you going to invest it elsewhere if rates haven’t gone up?

    1. The CD income is definitely going to be a proble in 3-4 years when it’s time to renew if rates stay the same. I’m assuming a 50% cut.

      What I do suspect is a continued rise in rental income to offset. For example, the rent I charge now is 20% higher from 3 years ago.

      Who knows exactly what the investment environment will be in 3-5 years. Will make a decision closer to the date. Could be like the structured product money I dumped into the market at Dow 12,500.

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