How to quit your job : The Transition

financial independenceA reader emailed me this question about the transition to Financial Independence and not working:

I would be interested in what you did – just quit and stop working one day? Go part time first? How easy/hard was it to actually do it when you realised you could?

The short answer is this: When I think about all the shit I put up with over 22 years in the Prison Camp, stopping working was EASY.

But it’s an interesting question that deserves a fuller answer. Lets break down the transition down into phases:

1 : The Oyster and the Pearl

Getting to financial independence is a bit like an oyster growing a pearl.  Firstly its pretty rare. Second, it takes time. Third it requires an element of grit to create the impetus for growth.  The grit can be a mixture of positive factors (talent, creativity, resilience) and negative (e.g. disliking your job / commute / lifestyle).

I’d like to say this phase was all flowers and positive thinking for me but in truth it was negative factors that provided most of my motivation.  This “grit” provides energy that needs to be channelled whilst you earn, save and invest.  This is the hard bit – grinding out a decade or two in the Prison Camp. By comparison the subsequent phases are easy….you just need to open your mind.

2 : The Lightbulb

There comes a point at which you stop blindly groping in the dark dungeon of consumer society and the lightbulb of financial independence comes on.  You then see the world as it is, rather than as adverts portray it.

In October 2013 I discovered the Mr Money Mustache site via Monevator.  This was when I realised that the stuff I had been thinking about for 20 years was not just my random hallucinations, there was an actual thing called financial independence.

The beast had a name…and once it had been named it could be visualised.  Once it could be visualised, it could be re-created.  Other people had made it out of the Camp, some in their thirties, so why couldn’t I?  Like they say on Top Gear, how hard could it be?

From that point on, I judged everything by whether it was consistent with my objective of financial independence. Every action was either taking me closer or it was not.  I focussed on the former and cut out the latter.

I devoured financial independence websites….see “Blogs that helped me”.  But reading alone was not enough.  I immersed myself in the ideas of FI by listening to the Mad Fientist podcasts – interviews with people like Mr Money Mustache, Jim Collins and many others.

I filled my long commute this way and it was therapeutic – like hearing sane voices in bedlam.  I listened with a notebook and wrote down ideas for things to try, books to read and experiments to undertake.  For example, I experimented with cutting out alcohol. I worked out my idea muscle which had atrophied in the Prison Camp.  Just by doing this I reckon I gained about 10 IQ points.  Every little helps.

3: How much is enough?

The short answer to this question is that an investment portfolio of 25x your annual spending is probably enough.

This means that no matter how rich you are if you don’t know what your spending is, then you will never know how much is enough.  You have to follow the money. Think of yourself as a detective tracking a white collar criminal.  You need to track every single pound that goes out of your bank account for a few months.  The process of observation changes the behaviour of the phenomenum being observed.

4: Preparing to quit

By November 2013, I realised that I had probably already had “enough”. This information is hard to process immediately…it seemed too good to be true.  Surely I must have overlooked something? For example, I don’t have a separate investment portfolio to pay for my kids first flat in London, their fees for Harvard Medical School or a new horsebox for their children’s polo ponies.

The phrase “I want the best for my children” sounds laudable if you don’t think about it too hard.  But you risk crippling their independence with economic outpatient care. Your kids are not gonna thank you for killing yourself on their behalf. And you will never be free of the Prison Camp.

Once I realised we had enough, I braced myself to speak to my wife and tell her I intended to quit. Had she signed up for a Walking Wallet? Would she now turn around and tell me, Apprentice style, that I was fired?

The fact that I had stacked shelves in supermarkets and worked in factories as a student was a great source of mental strength for me here.  In a worst case scenario, I’d lived like that before and I could do it again. I realised that in many ways I was happier then than I was after I had supposedly “made it” working in the City. Like Gloria Gaynor, I knew I’d survive.

To my wife’s eternal credit, when I told her that I was quitting and didn’t intend to get another “serious” job, she just calmly said fine.  I showed her the maths.  I had talked about quitting for years and I wouldn’t have blamed her had she assumed I didn’t have the guts to pull the trigger.  Now we’d see if I was all talk or not.

I don’t want to disappoint any readers but I did not walk straight in to my bosses office and tell him where to stuff his lousy job. This was partly because he is a decent guy. More to the point, I needed to wait for my bonus in March.  Not that it was particularly big, but The Escape Artist does not leave free money on the table when offered it by The Man.

I used to have a whiteboard in my office and each day I wrote up on the board the number of days left until bonus day: 7 March 2014.  Rubbing out yesterday’s number n and writing up n-1 was often the highlight of my day.

The act of quitting feels uncomfortable. You are always taking a leap into the unknown – like jumping into water from a high cliff.  You are pretty sure its deep enough and you can swim…but there is only one way to find out for sure.

5. The notice period

After I quit, I  had a notice period of a few months which provided a gentle run in towards the finish line.  In this period, I worked standard office hours but still worked late where needed on client projects….old habits die hard.

Ironically the job became much more bearable in those last months. The relationship evened up so it was no longer like that between Feudal Lord (employer) and Serf (me) but more like an agreement between consenting adults.  I started to relax and to treat the job like it was just a job…rather than a crusade by which I would single-handedly save capitalism.

I started this blog in May 2014….I found the process of writing cathartic.  A bit like therapy, only cheaper and with more humour. The process has encouraged me to be much more open, not only on the blog but also in real life.  I now practice radical honesty which people either find refreshing or a bit unnerving. I’m fine either way.

6:  Total freedom

Having spent 22 years in the Prison Camp building a stash that would mean I would (hopefully) never need to work again, the actual gap between my last pay cheque from my employer and my first income from coaching was 4 days. Can you see how ironic this is?

This is why I don’t participate in competitive pessimism on safe withdrawal rates.  The idea that you, as an intelligent and motivated person who has achieved FI, are never going to be able to earn any money ever again is fucking ridiculous.

I have even done some contracting work for my former employer since I left. At this point, you may be thinking of calling the Internet Retirement Police. But this is not cheating – financial independence is the end of forced servitude – not the end of meaningful work that you chose to do from a position of strength.

I did have the odd moment when I felt slightly disorientated by the prospect of total freedom.  We get so used to having guards and routine in the Prison Camp.  When you are FI you have to be comfortable with spending time with yourself and thinking consciously about your choices.  Some people continue with their job because they are scared of spending this time with themselves, dealing with their emotional shit.  They use work as a distraction from introspection, scared by what they might find.

My sense of humour and creativity had almost disappeared in the Prison Camp, crushed by stress and sleep deprivation.  When creativity re-appears, fun things start to happen.  This weekend I was out walking in a local RSPB nature reserve with my two boys. We passed the time with rap battles.  This would never have happened whilst still in the Prison Camp.

7: New challenges

Its all about the journey and not just the destination. I am planning new challenges that will broaden me out and stop me from becoming a stereotypical retired person playing golf, watching Jeremy Kyle on daytime TV and waiting to die (probably a relief after watching Jeremy Kyle).

For example, I am planning some cycling challenges for spring next year when I plan to cycle up Mont Ventoux in Provence and the Col de Tourmalet in the Pyrenees and maybe do Lands End to John O’ Groats.  I also want to spend more of my time outdoors working for causes I believe in so I’ve volunteered for a nature conservation charity.

My plans are still a bit half baked but, as they rise and firm up in The Escape Artist’s Ideas Oven, I will share them with you on this site…

Stay tuned.

30 comments

  1. The Runner · · Reply

    What a great article. Two points really resonate with me.

    The first point is that you have to know where your money is going. I have been tracking this very closely for the last few months and it is amazing/frightening where money just “leaks” out. Society is brilliantly designed to condition people to allow their money to just “disappear” and not notice it happening. Every weak spot will be exploited, whether it is your kids, weddings, funerals, babies, ego (dangerous one that one!) etc.

    The second point is that the end of forced servitude does not mean the end of meaningful work. I have made my own escape from the prison camp to do something I love and I am “working” harder than I ever have before. I use the inverted commas as it doesn’t feel like work. What I do now is poorly paid but something I am passionate about, something I think about all the time, and is certainly meaningful.

    If only more people adjusted their financial habits to follow their passions and didn’t adjust adjust their passions to accommodate their financial habits, the world would be a much better place.

    Keep it up TEA 🙂

    1. Thanks! – I have great admiration for those that take a pay cut to work their vocation and help others. One thing that worried me about doing that formally as a job was how would it feel to have to do paperwork and take orders from people higher in a chain of command? even if for a noble cause. I feared I wouldn’t have the patience….but I have huge respect for those that do.

  2. hrdavies82 · · Reply

    Hi TEA,

    I thoroughly enjoyed reading that. I feel very inspired and motivated to join you on the other side in the not to distant future (8 years).

    I think when the time comes, I too would be respectful to my employers. My boss is fantastic and I work for a great company. My motivation to work towards FI is driven by the freedom it provides.
    Funny enough, the moment I decided to pursue FI and set up my own Blog, it helped me feel the way you did with your kids. I noticed that I had relaxed and became the person I like being, not the boring jobsworth at work. I must confess to falling into the jobsworth mode now and again but I feel that I have to set an example for my team. I think the closer I get to my FI the more I’ll relax and become the person I want to be. When my team tell me the computer systems are running slow, I want to say “I don’t give a sh#t. Speak to IT or just deal with it. There are more important things to worry about in life” I might not ever speak to people like that at work, but I look forward to being more like that in everyday life.

    Thanks for providing a ‘peep hole’ to life outside the camp.

    Cheers
    Huw

    1. Huw – thanks for the comment….getting there by 40 would be great….3 years quicker than me!

  3. close to FI myself. tbh though, now that the end of forced servitude is within sight it has allowed me to relax at work, no more fear, result is i am now more creative and effective at work than i ever was and enjoying it again, ironic. But goes too show that FI starts to pay dividends even before you get there

    1. Exactly right – when you are FI you tend to be more creative – you can’t be creative when you are really stressed. I also have a theory (though no hard evidence) that financially independent professionals tend to have more integrity and so are less likely to screw clients / colleagues

  4. Did anyone / your boss ever ask you the significance of the number on the white board?

    1. Fortunately not. I used to discourage such questions by cunningly adopting a grumpy and irritable demeanour in my office. This look came quite naturally to me at work.

      I got the idea for the number on the whiteboard watching the film Zero Dark Thirty….where the CIA hero taunts her boss / colleagues in the office by writing up every day the number of days that have elapsed since they discovered the whereabouts of Osama Bin Laden without killing him.

  5. Interesting article! I had a similar lightbulb moment when I stumbled across MMM. For years I’d been saving quite a lot anyway, having a fairly strong natural resistance to lifestyle inflation (aka “being tight” 😉 ) and a desire to save money for “the future”, but it took the clear presentation of the actual idea of FI and early retirement as an achievable goal to make me realise what all that saving could, in hindsight, actually be for. I hadn’t made the connection between “I’m actually saving x% of my salary” and “therefore I only need 100-x% of my salary to retire on”, obvious as it is in hindsight. That and the idea of a safe withdrawal rate were the real eye-openers. I’d think I’d even mooted the possibility of living off something like £10-15k p.a. over lunchtime conversations with colleagues only to be greeted with derisory comments about living off baked beans. (The vast bulk of those conversations was all of us complaining about how much we hated our jobs.)

    With the actual FI goal now clearly defined I’m pruning out some bits of slightly gratuitous spending – when I had no definite goal, a 5-10% change in my savings rate made no real difference, whereas now it does. And the fact that I’ll have lived off my planned retirement income quite happily for a few years before I retire will “prove” it’s not some horribly unsustainable monk-like existence. (Plus, as you say, I fully expect to earn *some* money once I’m retired; I just don’t want to *have* to work at all, if I choose not to.)

    The only downside to all this is that now I can see FI on the horizon, I can’t stop thinking about it. I’ve got 3-5 years to go and the huge psychological barrier of turning 40 is looming before that point. Blogs like this and Monevator provide some kind of FI-pornography to satisfy me until I can have the real thing, though. 🙂

    I love the idea of the number on the whiteboard, I might steal that when I get down to double-digit days remaining.

    1. Steve – you shouldn’t stop thinking about it….just channel the motivation to think about how you can make that 3-5 year period more like 1-2 years. Here is a hint….rather than wait until you hit your “enough” number….start figuring out NOW how you might get paid something for doing stuff you enjoy after you have quit. If you have a side-hustle that you enjoy, you can greatly accelerate the FI moment.

  6. Cheers! While I was a little bit “OMFG this is so cheesy” while reading the article you linked on “idea muscle”, I was also sort of inspired. I think I might give the “10 ideas a day” thing a try, with this as my theme. Fingers crossed!

    1. Ha-ha! Its funny – many people are naturally suspicious of what James Altucher calls the “woo-woo” stuff. They often wonder if that idea muscle stuff is just like crystal healing, palm reading and feng shui. But that idea cheese works, dude.

    2. What I’ve read of Altucher really irks me in a way I can’t really put a finger on, but I can’t argue with a lot of the advice he spouts, to be fair to him…

      I love the sound of “Radical Personal Honesty” and would like to see the follow up article to that as well!

      1. TFS – the follow up article on radical honesty is here

  7. I’m in the biding-my-time phase right now. Won’t be quitting for another few years, but am planning on it very specifically (in 3 yrs at age 33). I think you’re right that it’s not wise to up and quit the moment you have the inkling and ability to do so. I want to ensure we’re in peak financial condition before taking the plunge. Thank you for sharing this–it’s inspiring!

  8. Superb article and some very insightful comments from the readers.

    I can agree about how work changes when you alter the psychology of the relationship (or hand in your notice). I’m at the start of a long goodbye to my job and I already feel a sense of liberation that comes from eliminating the political/toxic/time-sucking elements of corporate life that put such a strain on my day-to-day existence. Living on your own terms…

  9. Excellent article, great inspiration, thanks!

    I only got my ‘lightbulb’ moment earlier this year when I stumbled across MMM, now I’m trying to make up for lost time! I’ve found that I’m a lot happier having freed myself from consumerism (shopping for the sake of shopping) and pretty much know how much is “enough”.

    I’ve set an original target of 15 years to be FI but am looking to whittle that down by some years.

    Work is pretty good for me right now (as far as work goes!) – it just stops me from doing so many other things that I enjoy doing!

  10. Lots of links to your other writings here, and it seems to me that “radical personal honesty” just cries out to be a link to its own article too. At the very high level I can kind of guess what this is about, but I’d be interested in more details…

    1. Steve – yes, thanks….I included the reference to radical personal honesty with a view to a future article and your prompt is a helpful reminder….I will be writing a post on in the next few weeks – watch this space

      1. Excellent, thank you!

  11. I’m grateful for 2 things – firstly that I found your blog and secondly that, like me, you’re in the UK which means I’m not alone in wanting out of the rat race over here before I’m dead.

    Right now, I have just let out my one and only BTL in central London which, if all goes to plan, should cover most of my day to day living expenses. However, not wishing to have all my eggs in one basket so to speak, I’m also intending to now build up a portfolio of equities (a mix of funds and dividend stocks perhaps) with my remaining cash and future income. Yes, I know I should have a whole portfolio of properties and stocks by now, but I’m looking for simplicity and to sleep at night.

    At 44, I feel like I’m on the final lap of a very long and tiring journey and I’m eager to cross the finishing line. Will I make it, am I even on the right track? I don’t know, but the alternative seems incomprehensible and has done for some time now. Am I mad?

    Please keep up the good work!

    1. Paul

      Welcome to the site. You are not mad….just feeling a bit tired or isolated perhaps. But it gets much easier once you have found your tribe and it sounds like you are now on the finishing straight. It should all be much easier from here on in…

      TEA

  12. “I started to relax and to treat the job like it was just a job…rather than a crusade by which I would single-handedly save capitalism.” Super advice on how to survive until the Great Escape.

  13. I hear you Paul. I’m on a short new year break in Cornwall as I write and, after a bout of deep soul searching, I have decided that I should press the button on my 2-year work withdrawal plan now. I don’t have anywhere near enough for true FI as I just calculated that my net worth is 87% composed of SIPPs and home equity. But…I was relatively late to this FI party.

    I plan to work one more year to achieve a modest retention bonus and then go on notice next January or March (as 2015 takes shape I can see if an end of year bonus looks likely and defer handing in my notice until March 2016 if needed). As part of a 2012 acquisition I am on a 12-month notice period so I have plenty of time to plan next steps whilst on full pay. That gives me just over 2 years to the exit, ending a 16-year stint with my current company.

    Without true FI as a realistic goal, my overall theme is to devise a modular approach to work/paying the bills for the next 5-8 years, using my current specialism and applying it via short-term contracts or freelance work. Hardly groundbreaking but if it works it will be the close relation of FI, enabling me to live and work on my own terms and to start to enjoy life again having just turned 40.

    I’ve realised that time is the ultimate currency and I need to make it count.

    The alternative, doing nothing and soldiering on in the prison camp simply for the pay & benefits, is just too depressing to contemplate.

    This blog and others like it have helped me to see that there is another way.

    Happy new year everyone.

    1. Sean – great to hear that the blog helped – all the best & please let us know how you get on…

    2. How did it go?

  14. Sorry for being a little late to the party here, but this article resonates so much with me that I can’t keep my mouth shut right now. It has become harder to drag myself to work these last few years, I discovered MMM and Monevator (and then some) last year, did the math in a spreadsheet, and, although living a life that was not necessarily very frugal at all times, I came to the conclusion that I must have reached FI.

    The difficult part, I think, is behind me. I should be able tot sustain myself as I have guessed that my SWR would be < 4%. The gates are open, but should I leave?

    The scary part, however, is the uncertainty right in front of me. Not only did I have to make an educated guess regarding my expenses (no I never really tracked these), I also have no meaningful income: my equity portfolio is much too small to sustain me (not much experience here either), a few rental properties which are starting to generate some positive cash flow (and lots more when the first will be mortgage free in 2 years), but not yet, and I quit my job and am expecting my last paycheck in July.

    Conclusion: since I realized I am FI, and decided to act upon it by quitting my job and seeing where FI takes me, I have never felt so insecure!

    I hope I will experience a transition as you have experienced; I am looking forward to raising my IQ by a couple of points by living healthier, avoiding boring work, doing some manual labor around my house this summer, and gaining back some of my creativity that I seem to have lost along the way somehow, so I can figure out some meaningful side-hustle that will keep my mind busy, make me feel useful and provide some income just to make me feel more secure.

    Love your articles.

    1. Hi Pete, I wonder about your comment on thinking you are FI.
      If your equity portfolio is small and unable to sustain you and your rentals are not giving you any decent income either – how do you think you are FI? You sound like you are jumping out of a plane without a parachute.

      1. Indeed, I will not be able to sustain myself for the time being, not from income anyway, so will have to resort to (cash) savings.

        I conclude that I must be FI based on net worth calculation. Most of this net worth, however, is unrealized profits from rental properties which have appreciated quite a bit these last (almost) 15 years since I bought them. Combined with 15 year mortgages that are now almost paid for, there is a lot of unrealized profit sitting there.

        However, with 15-year mortgages, mortgage payments consume a lot of the rental income, with the remainder being spent on maintenance and renters not paying. Inflation (and thus, rising rental income) did help, but only to make everything mostly break-even.

        Basically, at this stage, my rentals represent a lot of value but not much yield.

        My plan is to sell one (probably two) of these properties, and re-invest in equity. I should be able to sustain myself with the income this equity generates (according to Mr Bogle, 4%, etc). However, I also plan to not touch this money for the next 10-15 years, in stead living of savings and rental income, and when necessary, topping up my savings by selling more property, making my life easier as I grow older by dumping the rentals along the way.

        Having equities, rentals and cash, today I consider this a diversified investment although I am definitely overweight in rentals, so I will take care of this slowly but steadily in the coming years, starting this year, if I find a buyer for rental #1.

        There are a lot of uncertainties going forward. In addition to market return and property value (I’m not alone here obviously) I need to add personal expenses and changing tax laws to this list. But, I need to press the button some time. There will always be uncertainty; I just need to manage it and not let it paralyze me.

        I feel like I am jumping out of a plane with a special type of parachute; the first chute that will deploy may not be big enough to save me, but should definitely slow me down – then, I have a few other chutes that will deploy in addition to the already deployed chute(s), and all of them combined, should be able to get me to the ground safely.

    2. Thanks for your comments. It is never too late to post your perspective.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Mr. Money Mustache

You can escape to financial freedom...

Altucher Confidential

You can escape to financial freedom...

Monevator

You can escape to financial freedom...

Mad Fientist

Financial Independence

jlcollinsnh

The Simple Path to Wealth

%d bloggers like this: