You’ve probably done it before, doing a Google search for, “how to quit my day job.” You are utterly disgusted with every part of your job that you want to give your 2 weeks because of the gossiping colleagues, the evil boss, the numbers, the bureaucracy, being underpaid (or feeling like you are), or any other reason.
I know exactly how you feel. I’ve been there and have actually quit a decently paying job only to regret it later. So let me go through a few reasons why I think you should keep your job. Freedom Nova is about reaching financial freedom and I want to take the monetary perspective as well as some other factors like keeping our sanity before jumping the gun and quitting a stable job.
Keeping your day job, the key to earlier financial freedom
Since this is what I want to talk about most, I’ll talk about it first. By keeping your day job you’ll be able to maintain your current lifestyle. If you aren’t able to maintain your lifestyle, it isn’t because you have a bad job, it’s because you’re doing a horrible job managing your finances and you have some work to do cutting expenses. If this isn’t the case and you really are struggling financially then you shouldn’t be quitting your job at all. You either have to look for better work or find side income.
Let’s face it, replacing your day job income isn’t easy. Since we’re devoting so much time to work and have accumulated skills over the years your pay isn’t as bad as you might think. I know it’s not fun to work a 9-5 job with overtime, and having experienced this myself and wanting to quit on a regular occasion, it makes so much more financial sense to stick through the tough times and get that paycheck coming in regularly.
By keeping your day job and increasing your income potential, you’ll reach financial freedom quicker. The key is to increase your income, increase your savings, hopefully increase your investment return by having a balanced portfolio. This combination is what I like to call the “magic formula to financial freedom.”
Let’s use some numbers to better illustrate what I’m talking about. If you are able to keep your day job and you’ve determined that your magic number is $800,000 (if you don’t know what your magic number is, read this article now!), are putting away $1,000 a month and you can stash away an extra $200 a month because of the additional side income, with a 5% annual return, you’ll be able to reach financial freedom x years earlier.
(PMT = -$1,000, FV=$800,000, PV=$0, i=5%/12 months = 0.4167% t=?)
t = 353 months or 29 years 5 months (rounded up)
(PMT = -$1,200, FV=$800,000, PV=$0, i=5%/12 months = 0.4167% t=?)
320 months or 26 years 9 months (rounded up)
This means that with the extra $200 a month in this example, you’re able to save 32 months or 2 years and 8 months of your life not having to work. So instead of quitting your day job, stick to it so that you can eventually quit your job earlier and not have to worry about money ever again. The great thing about most jobs is that you’ll get pay raises over time and if you can have this mindset, you’ll be able to reach financial freedom even quicker! This reason alone should be enough to not quit your job.
Focusing on efficient and fun ways to earn additional income
Here’s another beauty of keeping your job, you can choose a side income source that you have a passion for. It’s very difficult to quit your job and make a living following your passion.
But if you’re able to keep your day job, then you can choose to make money with something you have a huge passion for because you aren’t as dependent on the money compared to when you quit your day job altogether. You can even make your hobby a source of side income, if you call sell it on sites like Etsy. It’ll also help keep you sane in case your day job is driving you insane.
The Grass isn’t greener on the other side
When you compare your current job to another job, or quitting altogether to start a new company the alternative option always seems much better. And as much as this might be the case, it often isn’t and after you make the move and realize that the grass is a lot browner than you were expecting, and you might not be able to go back.
Don’t jump the gun, if you’re starting a new company to replace your current income realize that a huge number of startups fail and the percentage of failures increases as time passes. Some number says that up to 90% of startup companies fail (just as this Forbes article suggests). The number increases as time passes since companies run out of money or the owner runs out of gas.
If you’re starting something new, you have to realize how difficult it will be. You might be great at what you’re doing in your current job and think that when you go off on your own, you have the expertise that clients will naturally follow, but this often isn’t the case.
If starting your own company is what you want to do, then maybe start small and see if the new venture has the potential. But even then, unless your new venture is going to easily replace your current employment income and some, I would try and keep your day job anyway to help you fund your new venture, pay for your bills, and accelerate the pace of reaching financial freedom.
Starting a new company takes a lot of work
As much at it sounds great to “be your own boss.” The reality is you’ll be putting on multiple hats on such as the owner, bookkeeper, marketer, blogger, salesperson, etc. Yes you can create your schedule but if you aren’t making any money you’ll have to work extremely hard to get your business off the ground, which could mean much more work than simply working a 9-5 day job. In other words, working overtime during the weekdays and weekends.
Sure there are many business owners that hire managers or have businesses that act as passive income sources, but these owners have paid their dues either in terms of time or have the upfront investment to have bought a company that was already self-sufficient. If you quit your day job for your own company, you should not only be prepared to do a ton of work but expect to have a very steep learning curve.
Have multiple income streams
Creating extra income streams isn’t easy. It takes a lot of testing, tweaking and plenty of hard work. It could take months or years to start making a real income. That’s why you might want to diversify your income streams, much like diversifying your investments, and look to make money in more than one-way on the side. For example, you could blog, craft items to sell and buy and sell items on eBay on the side simultaneously.
Having said that, having multiple income streams can take a lot of time and energy to maintain. Trying to maintain and build 5 different income streams that produce $100 is often much more work than maintaining and building one $500 income stream. There is no secret formula that works for everyone. You have to get your hands dirty and try different things to see what works for you. That’s why I think it makes sense to try a few different income streams and see what fits your personality and interests and build on that. And besides, if one of two of your income stream fails or dies out, you still others as backup. Read the monster list of income sources to see some ways to make money both online and offline.
Get rid of all debt and have ample savings
If you want to quit your day job and you don’t where to start, the first thing you need to look at is your finances. How much debt do you have? What is your monthly budget and expense situation? How much in savings or cash flow access do you have?
Having debt and quitting your job is not financially intelligent. It’s like adding oil to fire and accelerating your rate to financial doom. It’s hard enough to pay the bill every month but if you have a large amount of debt, it’ll make it extremely difficult to stay sane while trying to take your business off the ground. And if your business fails, what happens then? Always have a backup plan.
Having worked a full time job for nearly 7 years, I can tell you that there were countless times when I wanted to quit. There were a variety of reasons, an unfulfilling job, the pay, the boss, crazy or lazy colleagues, high maintenance clients, etc. But now that I’m doing my MBA and have been away from work for over a year, I must admit I miss working. I definitely miss the paycheck but I also miss having targets and fellow colleagues and friends that I could bounce ideas off that were in the same industry and line of work. As much as we hate work, once we quit you’ll feel empty unless you know exactly what you’re doing. We need goals in life and something to keep us fulfilled.
With Freedom Nova, it’s almost like starting my own company. My primary goal isn’t to make money with this website but to see how many people I can reach and help in terms of simplifying their finances and investing to reach financial freedom. But even then, it takes discipline for me to come back here and write, create videos and think of new ideas whether if it’s a new book, app, or something else to accomplish my goal on a regular basis. What I can say is that this is something I have a passion for, and that’s what keeps me coming back. I’m overjoyed when I get an e-mail or comment telling me that something I wrote helped someone. It makes every minute that I spend on Freedom Nova, worth it.
Let me know what you think! If you have any questions, please feel free to pop me an e-mail or write a comment. Please share this article with anyone you care for, and like, follow, or subscribe to any of Freedom Nova’s social media accounts!