When Is The Right Time To Quit My Job And Do Something New?

Are you miserable at work? If so, you're probably wondering when is the right time to quit your job and do something new. The pandemic has encourage more people to quit their jobs and do something they really want to do with their one and only lives.

I always imagine a baby panda dies in a bamboo forest every time someone quits their job. Why? One should never quit their job just like one should never make an investment in something they don't understand.

Always negotiate to get laid off instead of just quitting. You can receive benefits such as free COBRA, WARN Act pay, severance pay, deferred compensation and unemployment insurance.

Figuring out how to get laid off instead of quitting bought me literally six years worth of San Francisco-level living expenses to pursue entrepreneurship.

Without such a long runway of financial support I probably would be more stressed in my pursuit of creating a lifestyle business. There's no way I would have spent $20,000 to take six weeks off this past summer either due to a constant worry my online revenue would fade.

I'd feel guilty experiencing so much freedom only a year post Corporate America. Making money while having fun is an odd feeling that takes time getting used to.

For those of you who are too stubborn to take my advice about never quitting I'd like to give you parameters to think about before throwing away what's likely your largest revenue source.

My Background

By way of background, I've consulted with dozens of individuals who have successfully made a small fortune by leaving their jobs.

I've also consulted with a handful more individuals who just said “Screw it, I'm quitting!” One of them moved back home with his momma. A couple others gave up and went back to work 10 months later. And a couple other quitters are still slogging it out on their own. Here are the main reasons why people want to quit their jobs. You gotta be strong and act smarter.

Don't be a quitter. Be an engineer and think outside the box. A day job is so much easier than entrepreneurship!

The Right Time To Quit Your Job

If you're thinking about quitting your job, please consider these scenarios before you do.

 1) When you'd rather drop a dumbbell on your toes than go in the next day.

If you are being abused or harassed at work, please speak up with Human Resources. Don't badmouth your employer in public. Chances are you'll blow yourself up and regret it.

Although HR's main purpose is to protect the company's interests and then your own, hopefully you will find someone sympathetic to your situation if you cannot speak directly to your manager.

If work is really that agonizing to the point of suicide, then take all your sick leave, then short term disability, then long term disability, then leave. Take care of your mental health. Many health insurance plans come with mental health benefits. Use those benefits while you have them.

It's important you take your leave in the right order. Vacation days have monetary value that must be paid to employees upon departure. The value is usually one sick day = one work day's pay.

2) When you've got another job opportunity lined up. 

This is the easiest reason for quitting a job you no longer enjoy. If another job opportunity provides new challenges, new excitement, a pay raise or promotion and you are no longer growing at your existing job then by all means make the move.

If you still like your existing job, then speak to your manager and see if they can match the suitor's offer. You have nothing to lose unless the suitor pulls their offer so speak quietly.

3) When your side business generates livable income for at least six months in a row.

Business is highly cyclical e.g. down during the summer, up during 4th quarter holiday season. The longer you can generate livable income from your side business, the better since it smooths out cyclicality as well as flukes.

It's up to you to define “livable income.” The monthly income you generate should be able to cover all necessities such as food and shelter. The longer you can juggle a day job and a side business usually the better.

If you haven't built up enough savings to support yourself, and your side business isn't taking off, give yourself more time. Be sure to read What If You Take A Leap Of Faith And Your Dreams Don't Come True.

4) When your side business income shows six consecutive months of increases.

Perhaps your side business isn't generating livable income yet, but is showing tremendous month over month growth. If you can see your side business income successfully grow into and surpass your livable income hurdle then perhaps it's OK to quit.

The likelihood is high your business will continue to grow if you dedicate yourself full-time although nothing is a guarantee. Just make sure you've got at least a year's worth of savings in this scenario. And be sure to read How Many Months Of Severance Would It Take To Quit Your Job?

5) When you have a sugar mamma or sugar daddy.

When is the right time to quit your job? If you have a spouse who will take care of you no matter whether you succeed or fail, then go for it. There are many men in the FIRE community with working spouses.

Practice the art of living off one partner's income for a good year. If you don't have a partner or spouse, there are actually websites out there like Seeking Arrangement which puts sugar parents and sugar babies together.

Some sugar babies are so entrepreneurial they'll have multiple sugar parents of either sex give them over $10,000 a month! What an amazing internet world we live in where being resourceful can go a long way.

6) When you have a trust fund. 

Thank goodness for rich parents or parents who have the foresight to protect their assets and take care of their kids if certain stipulations are met!

Everyone wants a trust fund, but sometimes having one can be very demotivating (future post). I've interviewed several trust fund folks who all seem to not maximize their potential.

Why bother doing something on your own when you've already got a million in a trust by the time you are 21? But if you take the opposite view and get motivated to be somebody because you've got little downside risk, then go for glory!

7) When you have little education and not much in the bank.

Imagine going to college for four years and then spending hundreds of thousands of dollars going to medical school for another four years. Unfortunately, you have no choice but to become a doctor even if you have a change of heart! See The Main Reasons People Quit High-Paying Jobs.

Folks who are thinking of going to law school should be very wary given the three year and often $150,000+ commitment. Surveys after survey say that the majority of law school graduates end up not practicing law and also end up disliking law as a profession.

If you have hardly anything in the bank and just a high school diploma or an inexpensive state school degree like me, then it's much easier to go off on your own. You don't owe anybody much of anything. You only owe it to yourself to pursue your dreams.

8) When you don't have any dependents.

Supporting yourself is much easier than supporting a family of four. How much do any of us really need to survive anyway? We can be on our parents health care program through our 26th birthday.

Health insurance is theoretically much more accessible and affordable to lower income individuals now with Obamacare. We can crash at our parents or on our friend's sofa.

McDonald's continues to have their $1 meals, including salads, 20 years later in spite of inflation. When the only person depending us is ourselves, then going for entrepreneurship isn't that big of a risk.

Quitting your job as a single person is a right of passage. You should continuously be quitting until you find something that provides you meaning and stability.

Now that I have two young children, if I had a job, I think it would be totally responsible to quit it. A parent's #1 goal is to provide for their children a safe environment with as much love and opportunity as possible.

9) When your idea is so great other people are throwing money at you.

Sometimes you know you just have a fantastic idea. And if it's an idea that can help you strike it rich, that can be an indicator it's the right time to quit your job with a severance.

Feedback from users is great. Growth is phenomenal and investors are climbing over each other to buy a piece of your company. Waiting a year to graduate would have been foolish for Mark Zuckerberg of Facebook.

This is the time when you should quit your job to focus on your business full-time. Investors want to invest in companies where the founder believes so much in his business that he's willing to dedicate 100% of his effort to making the business work.

Just remember the Startup Riches Myth where you might sell your company for multi-millions and still not be a millionaire in the end!

10) When you are prepared for a long, spartan road of existence.

Unless you don't make much in the first place, creating a business that matches or surpasses your previous work's gross income is very difficult. It's important to compare a business's operating profits to job's gross income to keep things apples to apples.

I highlight three examples in a post entitled, “Quit Your Job And Die Alone” which hopefully illustrates the point that making money on your own is harder than you think. The less control you have over variables that determine your income, the more you are at risk.

11) When you see the writing on the company's wall.

Companies come and go just like people. If your company  is looking like it's in trouble due to rising competition, slowing sales, unfavorable regulator environment or even a scandal, it's best to get out of there before it's too late.

By the time a company goes under you'll be competition with everyone else at your company for a new job. Have the foresight to leave by paying attention to quarterly town halls and personnel changes in management.

In 2012, I fake retired from the investment banking industry because commissions were getting squeezed. Since 2012, my company’s share price is down over 70%!

12) When you know your end is near.

If you've been diagnosed with a terminal illness then please, by all means quit your job and seek all the things you've always wanted to do before it's too late.

Just make sure you've got your will and insurance in place so that your death does not become a burden on your family. Even if you don't know you'll be dying soon, it helps to truncate your life expectancy to boost your initiatives.

Conduct a regret minimization exercise to help you move forward. The regret of inaction only grows!

13) When you become more credible. 

It takes time to build credibility, status, and authority. If you're recently out of college and want to start an advisory business what do you really know about life, economic cycles, building a business, happiness, or getting wealthy?

Not much, and you will realize how little you really knew when you're older. If you do manage to get clients, you won't be able to charge any meaningful amount due to your lack of experience.

As a result of your inexperience, you'll have to deploy the “fake it until you make” it strategy which is a very difficult uphill climb. It's much better to get at least 10 years of experience under your belt and then anoint yourself as an expert in some field.

If you can't wait 10 years to build your expertise, then at least wait until 30. There is a palpable bias against the way clients treat a 29 year old and a 30 year old. Now if you've invented an incredibly better way of doing something, then you have all the credibility in the world.

The Bottom Line On The Best Time To Quit Your Job

Unless you've got a fantastic job offer, quitting your job to do something new sounds like a bad move. Do you really want to join the ranks of the long-term unemployed if you fail at your entrepreneurial effort? (see chart again)

I know I sound like a Debbie Downer but that's because I strongly believe quitting without a financial safety net of at least a couple years is the wrong decision.

Nobody really tells you about their failures just like how nobody shares their stock market losses, only their wins. I'm telling you straight up as a person who went through the quitting process and is in the middle of building a lifestyle business that it's much harder to achieve success than it seems.

Work a day job and a side hustle concurrently for as long as possible until you think your day job is holding you too far back. Please embrace patience.

Misery And Regret Are Your Two Biggest Enemies

Despite all my warnings of quitting, I've found through my research that misery and regret are the most common attributes experienced by people who want to quit their jobs.

They feel they are wasting their lives working at jobs that provide no purpose. There's also a profound fear of regret being on one's deathbed and never pursuing a dream.

The fear of regret is the biggest reason why I left my job. The second reason was the rational pursuit of doing something more exciting.

Once you quit your job you're not destined for a life of poverty. Like any good poker player, you've carefully weighed the risks and rewards of your decision.

Sometimes you'll triple up and go far beyond your expectations. Sometimes you'll get bad beat on the river and curse the world. There's a good chance you can always return to the work force to rebuild your finances if things don't work out. That said, I've consistently seen managers treat entrepreneurs who want to rejoin the workforce like outcasts.

Set Realistic Goals

For those of you who do end up quitting, set realistic timeline goals for progress. Six months, one year, and two years should do. It's very easy to get distracted by multiple opportunities once you have a tremendous amount of free time.

If you are not close to achieving your goals after six months to two years, it's best to return to the work force at least part-time so that you don't become permanently unemployable. After two years of being out of the work force, your chances of finding a similar job becomes slim-to-none.

If you know of anybody who is considering short circuiting their careers too soon or wants to start a long shot business, please send them this article.

We'll have some great discussions in the comments, and after digesting everything they still want to quit their jobs and try something new, then they'll be in a much better place because their expectations will be much more aligned with reality.

If You Want To Quit Your Job

Unhappy with your job? I recommend negotiating a severance instead of quitting. If you negotiate a severance like I did back in 2012, you can get a severance check, and potentially subsidized healthcare, deferred compensation, and worker training.

When you get laid off, you're also eligible for unemployment benefits. Having a financial runway is huge during your transition period.

Conversely, if you quit your job you get nothing. Check out, How To Engineer Your Layoff: Make A Small Fortune By Saying Goodbye, on how to negotiate a severance.

I first published the book in 2012 and have recently expanded it with new resources, strategies, and additional case studies thanks to tremendous reader feedback.

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33 thoughts on “When Is The Right Time To Quit My Job And Do Something New?”

  1. So I attempted to engineer my layoff, but my boss made it clear the only way to be laid off is if the company downsizes. I feel like I am left with no other option than to quit. I want to use the ace up my sleeve and ask this as a “favor,” but the guy is straight as an arrow and follows the rules; never bends it. Any suggestions? I feel I have run out of option.

  2. FS,

    Man…I remember when you started this blog. I’m really pleased to see how well you’ve grown it.

    I just wanted to pipe up here. Its a lot, lot, lot harder to achieve serious wealth if you’re not self employed. Working for your boss at a nine to five puts a cap on your maximum possible income and you won’t get any real equity at all. Equity, or ownership is what counts for building and selling businesses in the long run.

    1. Funny how quick time flies right? Are you guys happy you sold off DINKS Finance? How’s the current site going?

      The only ways to build serious wealth working for someone is joining a pre-IPO hit like Twitter coming up, or spending a decade or more at a finance company or management consulting company. But a lot of public servants who spend 30+ years also accumulate awesome pensions too, which blows any private sector retirement plan out the water!

  3. Tara @ Streets Ahead Living

    I’m not one who is looking to self-employment but things aren’t ideal at my job. I usually can find a replacement job in my field (non-profit fundraising) as I live in NYC but after jumping my last two jobs after 16 months for each position, I know I need to give 24 months at this place lest I look like the problem employee. I was so eager to leave my last position because my boss was extremely crazy that I jumped at the first opportunity which turned out not the best. This is why leaving your job is good, but taking your time with the next job is always wise so you can be better at researching the place before taking it. There’s often a reason WHY that position is empty in the first place and it’s best to find out all the bad info first (if it’s a bad reason the last person left) before taking a new job if possible!

  4. #8 is so true, easier to take those chances when you don’t have the family in toe. Have a plan never just make a snap decision and leave $ on the table.

  5. Ha… Thankfully, #2 (new opportunity) rolled in before #1 did. Though, I saw it on the horizon. Thankfully, the excitement is back along with a whole new set of responsibilities and interesting challenges. And the fact it doesn’t snow where I just landed certainly doesn’t hurt matters!

  6. I’ve only quite one job in my life and that was a brief stint one summer break as a commissioned salesmen. The job involved going to people’s houses to give demonstrations and you only made an hourly wage if you did X number of demos a week. They never gave you that many so it was basically a pure commission job. I was burning money in gas with nothing to show for it so I opted to be unemployed instead (I wasn’t a fit for high pressure sales tactics).

  7. Sam or other readers, have any of you heard of any type of severance packages or other special compensation for people leaving the military? I am considering getting off active duty when my commitment is up next summer and have just assumed that there wouldn’t be anything out there, but I guess I should be sure of this!

    1. Found this website, appears to have a lot of stuff i knew exists for veterans. A lot depends on how long you served / how you’re leaving.

    2. Depends. If you get RIF’d (Reduction in Forces), there will likely be a severance amount offered, however, if you plan to enter the Guard or Reserves, there could be ramifications to your retirement. If you simply separate, there is usually no severance offered.

      It always depends though. Different ranks and career fields will typically be offered different benefits to separate-this is all based on timing and the current needs of the military/your specific service branch.

      What’s your rank (E vs O) and career field?

      1. Thanks for the insights. I’m an O-3, Veterinary Corps. There’s no Reduction in Forces that I am aware of, and I’m considering a transition into the Reserves so I seriously doubt they’re going to give me anything extra special this time around…

  8. #7 is incredibly true. When I was hating my job, I knew I had 8 years invested plus student loans, so there was no way I could not be an optometrist. I honestly don’t know how to do much else, that makes money anyway. However, I think there is always a way to work smarter instead of harder, so I work less days now, but do more when I am there. It makes me like my job much more at three days a week vs five or more. If you can’t put your job in that box that takes up time, but allows you to achieve your goals, then I’d look for an exit strategy for sure.

      1. I don’t know that it’s necessarily not liking optometry, but after my daughter was born, I have no desire to work 40+ hours a week away from home. I believe this would have happened no matter what I was doing career wise.

  9. “If you are not close to achieving your goals after six months to two years, it’s best to return to the work force at least part-time so that you don’t become permanently unemployable.”

    Well said. This happened to a friend of mine. He quit, didn’t do anything, and went back to work.

  10. I didn’t quit my job, it ‘died’ and so did the industry I worked in for 10 years. In my case the jump to self-employment was ‘forced’, but it did work out GREAT. My only regret is not taking the plunge at least 3-4 years earlier, I’d be better off now, that’s for sure.

  11. Done by Forty

    I might need to just cough up the money and buy your book on engineering a layoff. I’ve spent a lot of time thinking of how to accumulate my early retirement funds, but very little on the exit strategy. Doing it right might generate enough extra income to either provide a bigger cushion (and peace of mind) or possibly allow for an earlier exit.

  12. Great list! I agree with no. 3 When your side business generates livable income for at least six months in a row though one of the things that side business have is risk. It is not as stable as getting a monthly income from your job.

  13. I’ve failed at more things than I would like to count. I’ve failed at content websites, software, service based businesses, etc. I have many many more failures than successes. If I am not constantly failing at something then I feel like I am not making much progress in life. To fail is to have tried. I won’t even get started about stocks. If I am not investing specifically in oil and gas related equities I will almost certainly lose money (especially in tech).

    I’d rather lose my money trying to build something neat on the side than in the stock market. I’d rather try to build something on the side than lose “day job” security and wing it.

    1. It’s interesting how bright eyed and optimistic we are to try something’s new BEFORE all our failures. A job affords us the luxury to experiment until something clicks. For most, nothing will click and that’s just fine because we’ll still have our jobs!

  14. When you’d rather die than go in the next day. I waited too long and that’s what happened. I should have started the layoff process about a year before it became intolerable to go into the office. I wish your book/consultant process came out earlier. Oh well, I’m happy where I am so no complaint.

  15. Most people will always choose the easiest way out of every situation they find themselves in. That’s not always the wisest choice. We always have options, that’s one of the key things to remember. Thinking outside the box can be very fruitful!

  16. That’s interesting what you say about the difference in credibility between 29 yr olds and 30 yr olds. I’m 25 but I am absolutely the expert concerning my field within my company (because no one else does it), but I’m still not always trusted simply because I’m not 30. I feel like that all goes away if you can prove that you have a little grey hair.

    1. I think they’ve got Grey For Men at your local convenience store!

      You’ll notice much more respect at 30. It’s just the way society is right now just like how women have a prejudice against younger guys.

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