In the spring of 2012, I took a leap of faith and retired from investment banking for good. Here is my story about retiring early to focus on travel, writing, and eventually becoming a full-time dad. It’s fun to look back on this post nine years later and update it with some new thoughts.
There is not a day that goes by where I’m not thankful for taking a leap of faith at 34. In fact, the older I got, the more I wish I had the courage to take more risks while I was young. It’s never too late to start! If there’s one thing the global pandemic has taught us, it’s that tomorrow is not guaranteed.
Taking A Leap Of Faith At 34
Tonight I do not have to set the alarm because tomorrow I do not have to go to work. After 13 years of climbing the corporate ladder, I finally reached the roof and discovered everything was as imagined. A lot of sun with the occasional pigeon cooing out yonder. I can now see through the entire valley, down towards the ocean. I am officially retired!
Ever since my first job in 1999 I’ve been saving like a juggernaut so that one day I might retire early. I’ve definitely had my ups and downs with the internet bubble, housing bubble, financial sector meltdown, and now the European debt crisis. T
here were several times I wanted to quit due to the immense pressure. But despite all of this, I stuck through it and “The Nut” continued to grow to the level of self-sustainability.
A Fork In The Road
When I first graduated from college, I was presented with two choices. Choice number one was to go to Shenzhen, China and eventually become the head of operations for a family friend’s new eyeglass factory after two years of training.
It wasn’t a sexy job, but I would be able to fulfill my goal of working abroad, becoming fluent in a second language, and riding the China boom. The idea was to get some work experience and then do something on my own in the wild, wild East. Just two years prior, I got a chance to experience China for the first time as an exchange student and loved it.
The second option was equally exciting, working for a powerhouse firm in New York City to get rich the old fashion way. I was told around 8,000 people globally applied for 60 spots and for some reason, I got one of them. Although I had nothing to lose by going to China, I decided to play it safe and stay in the United States.
Despite appreciating the past 13 years, I’ve always wondered what it would be like if I took the other route. Perhaps it’s the reason why I’ve traveled internationally every year since graduation. Too bad we can’t live two concurrent lives!
I’m an adventure seeker who moved around as a kid every two to four years thanks to my parents’ work. Staying in one place longer than five years was absolutely foreign to me.
After playing things conservatively for so long, I finally feel like now is the time to shake things up!
Taking A Leap Of Faith By Having Something To Look Forward To
When you have something to retire to, taking a leap of faith is much easier.
About two years ago (2010), I decided that perhaps maybe, just maybe there might be a sustainable entrepreneurial business for me online. The markets were rebounding from its slaughtering a year prior and traffic on this site continued to grow.
Yakezie.com launched and a group of some of the most talented personal finance bloggers on the web banded together to share ideas, contacts, and leads.
Shortly thereafter, I had friends and other bloggers sending notes of thanks for giving them the motivation to quit their jobs. It was surreal because many of us started with nothing the prior year. Furthermore, I still had a day job!
There is a curse of making too much money because it prohibits you from pursuing other things. If I was making under $100,000 a year from my day job, I’d probably have quit with no parachute two years ago.
The more money you make, the greater the opportunity cost for doing something else. I was beginning to feel stuck making a decent income at a job that was beginning to dull after so many consecutive years of doing the same thing. I knew I had to create a plan!
My Thing To Do Post Retirement
With Financial Samurai, tracked my spending habits, learned about new investments, tested the housing market, and discovered new avenues after the private sector. My site helps me learn and keeps me accountable, which is why I encourage all of you to start your own.
Given I’ve been saving about 70% of my after tax income for the past five years, I decided if I could create enough passive income to equal 30% of my after tax income, I would retire. When I did that in 2011, I couldn’t pull the trigger because earning 30% of my day job income meant I wouldn’t save a single penny.
For someone who has saved for so long, and so regularly, not saving was out of the question. As a result, I set a target to earn 50% of my average day job income.
In early 2012 I achieved my 50% goal, but again, felt like leaving my job cold turkey was not the right decision. Instead, I needed one last push. A push that would make me shout for joy!
Further, Financial Samurai itself was growing. With traffic growth also came supplemental income growth to help fund my early retirement. My leap of faith was really a leap of excitement.
The Catalyst To Leave For Good: A Severance Package
Over the past two years, I’ve helped a number of people engineer their layoffs and receive healthy severance packages in the process. With each assist, I felt a greater urge to follow suit.
Each person’s reason for leaving their job was different. One was burnt out, another had just given birth and wanted to be a SAHM, while another wanted to follow her dreams as a full-time artist.
It was now my turn to put my advice to good use. I told myself that if I could negotiate a severance package after 11 years of work, I would sign the dotted line and commit to being a full-time entrepreneur.
I was well aware of what a potential severance package could be for someone with my experience, and I was very excited to see if I could make it happen. After about a month of negotiations, I sealed the deal!
During the entire process, I took meticulous notes on the steps it took to get laid off. I wrote down the key players involved and did endless hours of research to understand my rights as an employee.
Created A Book To Help Others
I interviewed five friends from various industry backgrounds whom I helped layoff to recap their experiences. With all this information in hand, I began to write and write my first book until 42,000 words were formed. My team and I then edited the book down to 37,000 of the most impactful words in 16 chapters.
Writing the book was an incredibly rewarding experience. It has brought me closer with loved ones as we shared more of our life stories. The book also forced me to open up a personal side I’ve never written before in a couple important chapters.
When we take a step back to reflect, everything becomes clearer. We remind ourselves that time is fleeting and we learn about who we really are and what we truly want to do. I’m very excited to interact with all of you after you’ve read the book and follow your journey as well!
Never Quit, Get Laid Off Instead
Although I am happy for every person who tells me they quit their jobs, a part of me also cringes inside. My friends were leaving real money on the table to their employer’s delight.
One buddy told me that the very next week after he quit his job of 10 years, his entire department got laid off with two weeks severance per year worked plus free health insurance for a year! What a painful mistake.
I am also afraid of what happens to my friends after they quit their jobs. Will they run out of money in six months? What if they can’t find another job in the industry they want? There’s a chance nobody believes in their entrepreneurial idea? What if they turn around and start blaming me for quitting their jobs and failing! I had to write something that could provide concrete advice to reduce these probabilities.
Other people told me they didn’t want to get laid off because it might burn bridges and look bad if they apply for another job. That might be true if you do it wrong, but it is certainly NOT the case if you do it right!
I was a manager and I cannot tell you how many times I wished an underperforming subordinate would come to me and ask to get laid off. I would even take a high performing subordinate if they approached me the right way because letting people go is difficult.
Get Ahead Of The Layoff Curve
Cyclical industries are notorious for going through boom and bust cycles. There are also surveys after surveys that show how unsatisfied workers are in their jobs.
If you spend your time off building a business, writing a book, or doing anything productive, nobody is going to look down on you if you decide to re-enter the work force.
Instead, they will be inspired and wish they could do the same! The problem is, I don’t hear many stories of people taking matters into their own hands and doing something about their situation! As a result, I know there are thousands of people out there who will find the book beneficial.
There are so many books about how to get a killer job, but there are no books about how to graciously leave your job and make a tidy sum in the process. People don’t realize their employees rights are incredibly powerful! For anybody who has ever felt trapped in their jobs, know that there is now a resource for you!
My ebook, How To Engineer Your Layoff was recently updated with new strategies, more case studies, and wonderful feedback from readers. For those who want to take a leap of faith too, this book is a must read.
So What’s Next Post Work?
I will launch my book in the next week and share with you more details for those interested in doing something else with their lives. The book has been a two year process and has gone through over 30 revisions to make it as high quality as possible.
I strongly believe the book will help everybody who is disgruntled with their jobs or simply looking to do something else. Unless you plan to work till death, there will be a backstop! I plan to write a series of books in different styles that promise to be edgy, helpful, and entertaining.
Update 2021: With tens of millions of people unemployed due to the coronavirus pandemic, I’ve updated my severance negotiation book for a fifth time to help people get a good severance and collect enhanced unemployment benefits.
I’ve also signed on with Portfolio, a Penguin Random House imprint to traditionally publish a book. It should be out in 2H2022. Publishing this book will be a nice bucket list item to cross off.
Due to my increased time I will increase the posting frequency by 30%-50%. I plan to simply write more and explore new topics. Perhaps I’ll finally redesign the site after so many years.
I will look into some commercial aspects of blogging as well given this will be my main source of income. I’m looking forward to steering this ship in a slightly new direction by providing insights into entrepreneurship, financial self-sustainability, early retirement, and travel.
Update 2017: Site was redesigned in January 2016, the site has grown to about one million pageviews a month, and content product has increased by 30-50% a week as of 1Q2018. The leap of faith is quite focused now.
Update 2020: I probably need to redesign my site further, but don’t have time now that I’m a father of two young children. At the end of the day, content is the most important part of a website. The site is doing great after more than 11 years of regularly publishing 3X a week. I’ve plowed 70% of this site’s income into building more passive income so we can stay away from corporate America.
Update 2021: I was able to publish 3X a week and write a free newsletter once a week during the entire lockdown period. The site continues to do well, generating a good amount of online income. But most importantly, Financial Samurai has been a great creative outlet.
Two weeks off at a time is the longest duration I’ve ever spent since 1999. I’m looking forward to taking three to four weeks off at a time in Hawaii, Lake Tahoe, and abroad with San Francisco as my home base.
After taking six weeks off total a year for my last two years, I’ve discovered that my ideal amount of time off is somewhere around eight to ten weeks. It’s going to be a challenge hitting that mark! I say “challenge” because I really enjoy working and probably won’t be able to stay away too long.
Update 2017: I took 10 weeks off in 2012 and another 10 weeks off in 2013 to see roughly 14 new countries in Europe. My favorite is Santorini, Greece and all over Mallorca. 10 weeks feels just right. In 2015 I went to S. Korea, Taiwan, Malaysia, and Cambodia. In 2016 I went to Prague, Budapest, Vienna, and Paris. In 2017 we had our first baby boy!
Update 2H2020: With the global pandemic raging on, we won’t be traveling until there is a vaccine. But all the same, since we had a baby girl in December 2019! We didn’t plan to get on an airplane until our son was 5 anyways. This way, he can remember his travels.
Update 2021: I finally plan to see my parents in Honolulu after 1 year and 4 months. We are all now fully vaccinated. Unfortunately, with the Delta variant, it’s looking more dicey.
Discover New Occupations:
I’m going to look at retirement as an extended sabbatical. I’ll use the time to see if there are any good fits in other industries. Anything internet related seems like a natural extension.
The problem I foresee is that although I’ve got my graduate degree and experience, I will probably have to start at a lower relative level if I want to get in. This is something I accept as part of my desire to do something new.
There are so many opportunities out there for all of us! We just have to look. My main issue is that after working for myself, I will never want to go back to working for someone else again!
Update 2021: I pivoted into consulting at several marketing departments of different financial technology companies since 11/2013. I ended up consulting for Personal Capital (11/2013 – 6/2015, and was a content consultant for Motif Investing (12/2014 – 12/2016). It’s been awesome learning all about fintech and the startup industry in Silicon Valley. In 2017, I’ve been focusing most of my time being a stay at home dad. I stopped consulting altogether.
Go At My Own Pace:
Part of being retired is finding a pace that feels most comfortable. It’s kind of like finding your steady body weight. You feel good, look good, but still get to stuff your face with hot fudge sundaes on occasion.
I think my ideal routine is four hours of work. Then exercise for one and a half hours. For the remaining time, I’ll spend with family and friends. If not, I’ll adjust accordingly.
Update 2021: I’ve found myself ranging between 3 hours to 6 hours of working on Financial Samurai every day. I enjoy writing. However, I need to try and average hours back down to 2-4 hours a day to be happiest. As a father of two young children now, I’m just more motivated than ever to provide.
Reset To Zero:
I’d like to completely rely on my entrepreneurial income to survive. In the process, I will ignore all the capital that has been accumulated since college. If ramen is all I can afford, ramen is all I will eat!
I don’t want to get comfortable living off my passive income streams (~$80,000 passive income in 2012). I fear laziness will eventually take hold. Instead, it’s more fun to be a bootstrapping entrepreneur who doesn’t know whether he’ll be able to pay all his monthly bills. That way, I hope to keep the hunger going for as long as possible!
Update 2021: My passive income has grown thanks to reinvesting 80%+ of my online income into various passive income investments. In 2021, my passive income goal is roughly $300,000.
Take A Leap Of Faith And Define Your Own Retirement
Retirement has always been about doing whatever I want, whenever I want without having much financial worry. I imagine retirement means the same for many of you as well. Don’t let the Internet Retirement Police try and dictate how to live your early retirement lifestyle.
I was so tempted to pull the trigger these past several years (2009 – 2011). I’m glad I waited until now.
Please believe me when I say the sacrifice is worth it. Things like studying like crazy, or getting into work before the sun rises is no big deal. Leaving work after the sun sets and starting a venture in your spare time are great! So is going to school part-time and always trying again after failure is well worth it!
Do it while you still have the energy! Once the foundation is set, you will have the optionality to do whatever you please.
Always remember that hard work requires no skill. Thanks for all your support so far!
X FACTOR: Starting Your Own Site
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 actually makes more than my entire passive income total that took 19 years to build.
If you enjoy writing, connecting with people online, and enjoying more freedom, see how you can set up a WordPress blog like mine in under 30 minutes. It’s cheap and easy to start today compared to when I started in 2009. You never know where the adventure will take you!
Update 2019: It’s been seven years since I took a leap of faith and I can’t believe how wonderful it’s been. My wife left her day job in 2015 as well, and we’ve traveled to 20+ new countries. We also had a baby boy in 2017 whom we get to take care of full-time until he goes to kindergarten. We feel tremendously blessed and are doing more to donate our money and time to others.
Update 2021: We feel very blessed. Cultivating an X-Factor turned out to be the best thing ever. Thanks to Financial Samurai, we’ve been able to remain stay at home parents to our two children. We’ve also been able to continue generating online income.
With Joe Biden as President, my plan is to retire again by 2022. I retired in 2012 under President Obama. I will retire again 10 years later under a democratic President. I spent between 15-20 hours more a week working online during the lockdowns. As a result, I’m tired as hell.
Originally published on 7/8/2012, I’d love to know if you took a leap of faith, and how your leap of faith has turned out in the comments section.