If you’re new to this series, make sure you read Part 1. In particular, I recommend the comments section, where I invited readers to leave questions they wanted me to answer.
Last week I promised to explain why making the switch to a more flexible career really isn’t as scary as it sounds. From the reader comments, it appears there are three main fears: financial concerns, the need for stability, and personal network compromise.
I promise to tackle each one of these and show you how to diminish them. But this week I’m going to focus strictly on the financials, because this was the catalyst insight for me and the biggest fear that seems to inhibit career design in others.
Just look at what Peter had to say in last week’s comment section:
I’m actually in a similar boat. I have a comfortable government job but have really been thinking about leaving to pursue my own business. Problem is, I don’t think I have the same opportunity as you. I’ve started doing some web development on the side and I have had some steady projects but I’m not sure if it is enough to sustain a complete jump… –Peter Yaworski
The most important thing you have to remember about my story is that I primarily embraced career design to give me more flexibility to write. And for the foreseeable future, writing doesn’t pay. So if your passion pays any amount of your monthly bills, or has good potential for doing so, you’re already ahead of me. Peter, you absolutely have the same opportunities I do. And that goes for all of you.
There are two big things you need to keep in mind: 1) you don’t need as much money as you think, and 2) you can still make more time for your passion without forcing it to pay all the bills. Let’s consider each of those statements.
How Much Do You Really Need?
The first thing you should know about me is that I’m a saver. So is my husband. We’re not cheap by any means, but we are effective skimmers. By that I mean we take a large chunk of our income, stash it away at the beginning of every month, and proceed to pretend it no longer exists.
You probably think this is a huge enabler for someone making a career leap, but in fact, it can be just the opposite. The problem? Eventually you have to be willing to spend what you saved. Easier said than done. I’ll come back to that.
- Determine where your money is going. This was a chore for a skimmer like me, because once I’d socked away my savings, I really didn’t care where my money went as long as all the bills got paid. Upon inspection, there were a number of areas where we could save money without really sacrificing what’s important to us. For example, we used to eat out a lot, even with a toddler in our midst. I now cook more meals at home, and actually eat the leftovers. It not only saves money, it’s healthier too! What’s even better is that once I started working from home, my meal expenses decreased by about 90%.
- Understand your true financial commitments. What would be a visible signal everything was okay with your finances? Picking something visible is important, because it’s so easy to get caught up in the “more is better” philosophy. I’m not saying you should avoid opportunities to earn more money, only that right now, you’re trying to figure out the minimum salary you need to still live comfortably. For me, this meant I wanted to be able to go grocery shopping without worrying about prices, and I wanted to be able to afford at least one Lindblad vacation a year. As Chris Guillebeau says in his new book, The Art of Non-Conformity, “frugality is not about pinching pennies, but making conscious choices to spend on the things I value–and avoid spending on other things.”
- It’s okay to take a pay cut. Once you’ve done the first two steps, you have to tell yourself it’s okay if your salary actually decreases with your career change. Most people focus so much on money, they won’t make a change unless the new gig offers an equivalent salary or a plus-up. Adopt the Tim Ferriss definition of rich: it’s not how much you have in your bank account, but how you spend your time.
Here’s where my huge a-ha moment happened. Once I accepted the idea of a pay cut, I realized I only needed to bring in a few thousand bucks a month. And that reality is amazingly possible in almost every career field.
Creative Money-Making Strategies
My big realization is that while I needed more time to write, I didn’t necessarily need all my time to write. I felt if I could spend about a third of my time writing, then the other two-thirds could be utilized for more profitable ventures. Thus, less pressure on the passion, which keeps it enjoyable.
Many brave souls go cold turkey and quit their jobs for something more satisfying with no promise of immediate income. I admire that, but it just wasn’t going to work for me. I needed weaning.
Part-time work, full-time pay
What if I told you it was possible to make more time for your passion while still earning roughly the same amount of money you do now? The key to making this strategy work is to be essential in whatever job you are in before you decide to leave. I can’t tell you how many times a boss or higher-up has said of some effort I started, “What’s going to happen to this when you go?”
The problem is, no one ever tells you how to generate that kind of response. The secret? You either need to be a “big idea” person or an amazing executioner.
I’ve always had the ability to see what things could be. Fortunately, I also had the communication skills to motivate those around me to get things done. In my experience, big idea people are fairly rare (which is probably a good thing). If you aren’t one naturally, you can still stand out from the crowd by learning how to be a synthesizer.
But your best bet is probably to follow the route of executioner. I had the good fortune to work with one of these individuals for an extended period of time. Mike had laser focus, was ruthless about prioritization, and used his connections to overcome just about any obstacle. Frankly, if I were a boss and I had to choose between myself and Mike, I’d pick Mike every time.
The good news is, depending on your industry, impressing the pants off the people around you may not be that hard. Take a look at John Grisham’s hilarious account of his experiences in retail. Every time he tried to quit, he got a raise! If you’re essential to your workplace, your boss will find a way to keep you, either with more flexibility or more pay, or ideally, both. Tim Ferriss has wonderful suggestions in his book The 4-Hour Workweek about how to successfully broach this idea with your boss. If it works in government and it works in retail, this strategy can probably be successful anywhere.
One caution: if you hate your current job, be careful about pursuing this option. You may suffer feelings of loyalty in return for the added flexibility, making it harder to ultimately leave.
Stop saving, start spending
This is counter-intuitive advice, and as I said, if you’re a saver or skimmer like me, it will be incredibly hard to implement. Ask yourself this: what are you saving for?
Most of you will answer “retirement,” but is this an outdated idea? Tim Ferriss and others argue it is, advocating you work your entire life with “mini-retirements” throughout. This makes enormous sense to me. I’m friends with a number of people working in their late 70’s and 80’s. Without exception they are sharp, vivacious, and generally fascinating people. I see myself joining them, especially if I am successful in continuing to procure work that matters–to me.
So let me say this: putting the maximum amount you can in an IRA is probably a good idea. Saving for your kid’s college fund is also a fine idea. Make sure you can take care of your health. Beyond that, I say spend it.
Use the money you earn to make your life better right now by buying yourself career flexibility. This means drawing money out of that savings account and using it as income to support yourself and your family until your passion either pays the bills or you decide to go back to higher wage jobs. Keep in mind that if you only need, say, an extra $1000 a month (now that you’re working part-time), even a modest savings of $10,000 can provide 10 luxurious months of increased free time (or, in my case, time spent working on my passion).
This is not easy. After saving money all these years, it is actually psychically painful to now spend it. All the more reason to do it. Because if you can’t spend it now, what makes you think you’ll be any better about spending it later? This is the lesson we learned from those in the Greatest Generation who endured the Depression, and are now sitting on million dollar savings while still using a paring knife to peel potatoes, because regular vegetable peelers waste too much. As much as I love my daughter, I saved that money for me, not for an inheritance.
Diversify your income
The other reason for having three part-time jobs is that I can adjust the hours I spend on each. I sincerely hope to make some income as a writer in the future. Until then, I appreciate the lower risk of having two other income sources. If my work as a consultant suddenly comes to an end, I still have my job as a Reservist, and I know how to ramp that work up should it become necessary. If my writing ever takes off, I can easily cut back on my other jobs as desired.
This is probably the most creative part of my financing: figuring out what my options are. For example, I learned about positions for Reservists that allow you to work full-time for a specified period of time while also upping your eventual retirement pay. That specific bit of information will be of little use to most of you. The point is: there were revenue sources I’d never considered until I got serious about career design. Planning and networking with other resourceful people is key to making this step worthwhile.
Accounting for a family
Sadya had this question about embracing career design with a family as one of the variables
How do you deal with the income loss? If there are two earning people in the household , then one always has the option of choosing a path such as yours. How should someone solely supporting themselves or maybe a single parent pull off something like this?
Contemplating career design with a family is complicated. On the one hand, having a partner or family make career design more difficult–you have someone to support beyond just yourself. On the other hand, you may have another source of income that lowers the bar on your own financial stress. Thus, it seems to me that career design is no easier or harder being single. I’m not even going to speculate on how a single parent does career design, because frankly, I don’t fully comprehend how they do what they do with a more traditional career path. Nothing is easy as a single parent.
In my case, my husband earns enough right now that we could meet our needs without me making a dime. But my current structure also means I could fully support the family if I needed to, and I’m already a lot more flexible than I was before. The downside is that both of my jobs involve a lot of travel, which is difficult for my husband. I think my travel demands will decrease after the first year (I’m in the ramp-up phase), but if not, then I’m more than willing to make changes to better accommodate our family needs.
In four years (or less), my husband plans to retire and follow in my footsteps by pursuing a second career that also will likely make no money. At first, this really stressed me out. While we would have his Air Force retirement, going from two fairly generous salaries to roughly $40,000 a year is a big change. But…the guiding principle of our marriage is that if there’s something the other person really wants, we do everything we can to help them achieve it. No matter what. It’s worked well for us for ten years, so I’m now guiding him through the career design process. What that means for us is that while I don’t technically need to earn money right now, ideally I’ll become even more creative in my income generation, so we can both fulfill our dreams when the time comes.
Stay tuned for the next installment of the Career Design series, where I’ll discuss how to make the career leap–and land on your feet. As always, if you have further questions you want me to answer just leave them in the comments section. The series will continue until I’ve answered them all. And please, take the time to share this post with your network–tweet, stumble, share, etc. You never know who you might help design a truly fufilling career.