A rendition of a song by Johnny Paycheck – see a video of his song at the end of this article.
Sustainability
By ARTS & FOOD® staff, information source: Dr. Brenda Uekert’s Early Exit Academy
An Actual “Numbers-on-Paper” Plan for How To Leave Your Job and Create a New More Comfortable and Balanced Life/Work Situation!
People always think if only they could win the lottery, or marry well, or have some stranger come up and hand them a million dollars, it would solve all of their problems. WAKE-UP! you are living in a fantasy! You have a slot machine mentality where somehow, someway “lady luck” is going to save you! “Double or Nothing” is not a plan! Look in the mirror, are you downright crazy? Instead of this fantasy, slowly start digging yourself out of your hole and begin focused work at creating a better version of yourself and your work life. I am sorry to inform you, this will take some sacrifice, some discipline and some time!
Many people who make plans and leave their jobs, don’t leave in traditional ways anymore. Some travel the world for a while, then return to the workplace and get another job, or they use the “new business model” by offering their services as an online contributor or employee. These customers or employers don’t care about the location where you are working, as long as you show up when needed, have a good internet connection and are excellent at your job. Go ahead, plan your exit, then craft the lifestyle you want… today your world truly is yours to design!
FIRST FIND YOUR MOTIVATION – ASK YOURSELF THE HARD QUESTIONS:
- Does the thought of starting work each week currently make you feel stressed-out, depressed, and unhappy? If so what is the problem needing to be addressed?
- Do you want to transport yourself into a new lifestyle, changing from your paycheck to paycheck insanity lifestyle, into a fulfilling work/life balance that includes financial freedom?
The large majority of us, 99%, work because we must. We have no choice, there are bills to pay and mouths to feed. At some point, we ask ourselves, “Is this all there is?”
Here’s the good news: “You can create a better life and have a better future with financial freedom including an exit from that job you are barely tolerating, aka it’s driving you crazy! ONLY IF you plan your departure.”
Actually, everyone should have a plan for their leaving their 9 to 5 job, because of the nasty realities in today’s workplace. Consider the following:
If you are older… your employer may push you to retire, so they may hire a younger, less expensive and more energetic worker to replace you.
(OR)
You may get a new boss where the chemistry can go wrong, very quickly. He or she can make your life miserable, ultimately forcing you to resign.
(OR)
If your company loses a contract, is acquired, downsizes or is reorganized… the bottom line, people lose their jobs.
(OR)
If you have given everything to your company, but they keep eliminating positions and piling more and more of those jobs onto you, for the sake of your health and your sanity, you may have no choice but to leave.
PLAN FOR AN EARLY EXIT!
When the time is right, simply pull the trigger and be on your way to start living the life you have been dreaming about.
HOW EXACTLY DO I DO THIS, you may ask?
- First, you must know what motivates you, what is your purpose? Use that motivation to make the needed and difficult changes to your lifestyle and spending habits.
- You must make these changes to save the money needed to protect you from financial distress.
- You must learn the basics of operating a business, so if you leave your job, you can start being your own boss. Imagine tap-dancing out of bed at 5 am in the morning, ready to take on the tasks of the day!
- You must learn the habits it will take to thrive at being your own boss, or to manage employees!
- You must have a crystal clear definition of the business you want to start, knowing exactly what the problem is you are solving, who is your customer and the cause you are championing!
- MOST IMPORTANT OF ALL – Find a successful person (or business) in the field you want to enter and learn everything you can about them, from how they operate, to what is their shoe size? (Metaphor for learn everything.) Model their success!
These skills will allow you to start a business when you leave the employee rat race!
Your first priority is to rid yourself of unnecessary, miscellaneous debt.
Keep expenses low, save and invest your money and get your net worth up as high as possible, before you make your move. It’s important that leaving your situation will never create a panic over money. THINK three times before you borrow money to start a business. Repaying business debt, tied to the prime rate, can really do a number on your stomach lining. Start small and build your business up slowly without debt if possible. Every day in your current job, convince yourself you are working toward your own independence day. Get your net worth up. (All of your assets, home’s value, car, all property, stock, all things with a resale market value plus your cash / minus all of your debt = your net worth.) The larger the dollar amount of your net worth, the more freedom you will have when you leave your current job.
We all face the same disadvantages when it comes to planning for our financial future. There is plenty of uncertainty and always has been! None of us knows how long we will live. There is uncertainty in the stock market and uncertainty in the economy. What about inflation, will it stay low or go sky high? And health care expenses, how can they be covered. Finally, will Social Security and Medicare even exist when I need it?
PLEASE, these are limiting worries. Too much data will always lead to confusion. If you think like 90% of the workforce, you will be frozen by indecision and stuck in your dead-end, thankless job forever, you may never pull the trigger! You must have optimism, a plan, and the mindset to believe you will always be able to solve all of your problems, even as the problems change quickly, before your eyes.
LET’S START!
YOUR PLAN: You want to have $1,000,000 in cash, in your bank’s savings account as your cushion. Your will grow this money at 4% interest and withdraw it at that same rate. In other words, you want to earn $40,000 in interest each year and live on that $40,000 each year, keeping the principal of $1m untouched and in your bank account. If you have your home paid off, have no current dependents and have no debt, with discipline you can you live off of your $40,000 interest payment!
For ease of math, let’s assume you currently have an after-tax income of $100,000 a year. What do you need to do in order to accomplish your goal of having a saving account of $1,000,000? It sounds like a dream, but the math is quite simple.
NOTE: You are not most people!
For most people – the more they earn, the more they spend! People who have the vision of leaving their job early, learn quickly, to cut expenses and live off of 50 % of their current income.
So cut your expenses by 50%. Replace the car, downsize your housing costs, be creative, as if your life and your health depend upon it because they do! Just make it work! You will be surprised how wonderful life can be when you are not trying to keep up with or impress the Jones! Now save that 50% of your income and work at reducing your expenses 10% further. DONE! You are now living on your projected $40,000 a year and saving $60,000 a year. In the bank, your money will be earning between 2.5% and 7.5% interest, if rates go up, compounded daily. In 15 years you will have saved (in round numbers) between $1,090,000 and $1,650,000 by depositing $5000. a month into a savings account with compound interest.*
Assuming you start at age 35, after fifteen years (you are now 50) you will be in great financial shape!
*(Note: These numbers are generalizations, and were created using the calculator at investor.gov – ARTS&FOOD® is only using this as a scenario and takes no responsibility for errors in their calculations or for any mistakes or ommissions we may have made – you must consult with a certified public accountant or trusted banker for your actual numbers! This is an online calculator, part of an American government-owned site. Also please notice that this chart calls the first year “0”, year 15 is actually the 16th year of making deposites.)
If the economy tanks you simply deposit less money and do-without more stuff, just like everyone has done forever during lean times.
We are all flexible with our expenses, we can choose to live in a different city with lower costs of living, and we can eat ramen noodles at home, always a decent meal. You must develop the correct mindset if you want to buy your freedom!
KNOWLEDGE IS THE KEY. Know your numbers! Having no debt, putting away a majority of your salary every paycheck, knowing your annual expenses, and if you do have debt, knowing your debt-load and the interest rate. Plan for your cost of health insurance and have an idea the amount you can earn with a new gig after you leave your job. Is it possible to make side-hustle income. All of the above are important numbers to know. Then your actions become logical, instead of a gut feeling about when to leave your job.
LOOK AT THE CHART (above) – If you really hate your job, at what point on that chart can you pull the trigger and leave your job, but still have a decent financial base to protect you from financial misery? Is it two years, five years, eight years, ten or more?
Your current income has nothing to do with what you can actually live on. Always work on growing your savings gap, by creating more surplus, and cutting more expenses as often as possible. Think about it, this savings account determines when and with how much comfort, you can to leave your current job. With proper motivation, make these plans to leave, then turn the plans into reality.
SUMMARY: Use your after-exit expected expenses as the basis for your current expenses and your mantra now is:”the more you make, the less you spend!” Set your “Take This Job and Shove It” date, then work your plan. It’s simple, but it’s not easy! – Your mindset is the key. HOW MUCH DO YOU VALUE YOUR FREEDOM?
Dr. Uekert offers an “EARLY EXIT ACADEMY” a step by step help in leaving your job and or retiring early. Here is the link www.earlyexitacademy.com for guidance and help in making this transition.
