Below is an extract from Chapter 4 (The Money Question) in our new book - The Escape Manifesto (a revolutionary handbook for the frustrated professionals of the world).
The book is being published by Wiley shortly after Easter – watch this space for your chance to buy it in bookstores and Amazons near you…).
So… The Money Question…
The main reason people stay in jobs they don’t enjoy is money. This is a pretty good reason. When you have debts to pay, mortgages to service and a whole variety of other monthly outgoings it is hard to consider taking any form of career risk at all.
When you are planning an escape or career transition, you will think about the money question A LOT. It will be one of your main decision criteria. If you’re determined to make an escape then it is important that you don’t let it become one of your mental blockers.
Crunch the numbers behind your escape plan
Getting your head around The Money Question is a process of clarifying your goals, your levels of risk tolerance and four key numbers:
A – The minimum you can live on per month (during your escape).
B – How many months you think you’ll need to live on it for (the Hit).
C – Your ideal recurring income after the transition (post-escape).
D – Your total escape fund (your pre-escape savings).
The magic number is D – your target saving amount – and the minimum acceptable amount to resign on is A x B (i.e. the amount you need per month multiplied by the number of months you think your transition will take). Then you tell yourself that after “B” months you need to be at “C” otherwise you’ll rethink your plans or go back to your old job. NB: You may have a part-time work plan for the transition. This can further extend the period you have to make your escape work.
You may be in a fortunate situation whereby you can forecast every number without doubt. However, if your escape involves the prospect of an as-yet-unknown income stream (a new salary or a sustainable business venture) then the anticipated date of that money (C) hitting your bank account is the big risk in the calculation and it is probably worth inflating (B) by at least 25% as insurance.
If you are serious about escaping then the easiest deadline to set yourself for resignation is the day that you hit your magic number – D – the number that you need to cover you through the Hit. This gives you something to aim at and helps with the discipline of saving. It also takes away the fear of wondering when the right time is to quit (hint: there is no right time, so you might as well make it the day you hit your magic number!).
What do you think?
Rob Symington (@escroberto) is Escape the City’s co-founder. He lives on a boat, owns a double decker bus called Esmerelda and a motorbike that breaks down a lot. He passionately believes that ‘just because’ things are the way they are is no justification for accepting them. The Escape team are hard at work over on the main site building Escape Profiles that help people make big career changes.
If you want to receive Escape the City blog posts directly into your inbox just click here. We write about leaving big corporates, pursuing alternative careers, building businesses, and going on big adventures. Because life is too short to do work that doesn’t matter to you.