6 Things to Know Before Quitting Your Day Job

899This is a guest post by David Stein.  He teaches how to invest, live and thrive in an unpredictable world at www.jdavidstein.com.

I am thrilled for Tony that he is quitting his day job and will take a “mini retirement”.

I made the same decision just over a year ago for many of the same reasons. Like Tony, I enjoyed my job but had the nagging feeling I was settling. Nor could I imagine doing the same thing for 10 more years.

I also saw an underserved market that I would not have been able to reach with my existing employer. Namely, individuals who practice good financial discipline (little debt, emergency fund, budget, etc.) who want specifics on how to invest but don’t want to pay a financial planner a $2,000 upfront fee or a 1% ongoing management fee.

Here’s what I learned over the past year flying solo:

1. Don’t Launch Too Soon

I launched an investment newsletter and blog the Monday after I quit. I told all my friends and family, and then wished I hadn’t as two weeks in I discovered I hated it. I was selling performance and after 16 years of managing money, I realized I had stepped right back into my day job. Only now I wasn’t getting paid.

I spoke with a friend who 8 years ago quit her job at a large London-based advertising agency in order to work for herself. She told me to slow down. That quitting your job is like getting a divorce. You are too emotionally raw to make major decisions. Give it time and your path will slowly reveal itself.

So I shut down my site and told myself I was retired.

2. Find New Friends

I hadn’t realized how awkward it would be to interact with my friends that were still employed at my old company. Much of our conversation had been about work and now there was a giant void. I also sensed a bit of jealousy.

This was especially surprising to me as I have telecommuted for over a decade so it was not as if I was no longer seeing my friends at work.  I hadn’t worked in an office with co-workers in years.

Without the ability to confide in my work friends, I interacted more with friends who were also self-employed. I also took up fly fishing and made new friends on the river.

3. Having A Much Lower Income is A Real Shocker

I was mentally prepared for a significant reduction in my earnings and the need to depend on my investments for most of my living expenses.

What surprised me was how difficult that transition was emotionally. For so many years, my economic pie had increased, and now I could see it shrinking.

A budget helps but not having a steady income is a real adjustment. I am still trying to adapt.

4. Prepare to Change Your Mind

Six months after quitting, I decided I disliked not having an income so much that I was ready to work again. I hired someone to help me craft my resume and seriously considered moving to New York City, a place I have always wanted to live.

This lasted for about a month until I came to my senses and realized I was so accustomed to setting my own schedule and not having to attend meetings in person that getting a job would be worse than not having a steady income.

5. Learn Something New

Another self-employed friend suggested I learn to do my own web development. My earlier site used WordPress, and I found it frustrating that I had to depend on an outside developer to tweak my site.

I spent many hours digging into HTML and CSS. I drove to Las Vegas to attend a tech conference for Amazon Web Services. I experimented with new sites and new hosting environments.

As I spent more and more time on these outside endeavors, a new way to provide investment advice slowly began to reveal itself. This is the principle of Obliquity that John Kay writes about in his book by the same name. Complex goals are often achieved indirectly rather than trying to attack them head on.

6. Keep Experimenting

No one has the self-employment / making money online gig completely figured out. Things change too quickly. I am a firm believer in trying many different things and observing the results. When something seems to work, do more of it. The one constant is always strive to be helpful to others.

One year after quitting my day job, I relaunched my website. It remains a work in progress as I figure out my new business model.

Still, I am committed to self-employment for the long haul. I value my freedom too much to ever consider working for someone else again.



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