Six months ago, I left my corporate job [1]. My goals to spend more time with my kids, teach others about personal finance, and pursue a life with more freedom are more fulfilling than I even imagined.
Over the last six months, I’ve had time to reflect on my decision to follow my heart. Stepping off the climb up the corporate ladder was no doubt the best decision that I ever made. My only regret? I should have done it sooner!
Six Month Update
- Stock Market. Obviously, the stock market decline had an impact on our portfolio. It hasn’t affected my decision much, but that’s because I had some plans in place in case this happened. For example, my planned withdrawals were moved to CD ladders [2] before the market decline. In addition, I was planning to withdraw significantly less than I could safely. Of course, the timing of the market wasn’t the greatest, but I still have a long term perspective.
- Retirement Withdrawals. The FIRECalc [3] models show that a significant decline in your portfolio in the first year of withdrawals can have a detrimental long term affect on outlasting your portfolio, so I actually chose to hold off making early Roth IRA withdrawals [4] for awhile. I had a lot of cash on hand to cover a worst case scenario; I’m glad I did! Once the market is more stable, I’ll resume my withdrawals.
- Retirement Contributions. In fact, because of the market decline, I’ve actually decided to contribute more to our retirement accounts, via our Solo 401k [5], instead of making my planned withdrawals. I couldn’t resist being able to add to our portfolio while stocks were on sale!
- Asset Allocation. I still maintain a total market asset allocation [6] with low-cost index funds, with an overall 0.148% expense ratio. However, I will need to rebalance soon, as the cash and bond portions have grown while the stock portions have obviously declined.
- Cash Flow. Ironically, even though I held off on making my planned withdrawals, our monthly cash flow is actually more than it was when I was working! It’s a combination of significantly less in child care costs, less in taxes, and more in business income than I predicted when I was planning for my new lifestyle cash flow [7].
- Severance. Many of you may remember that I mentioned my company went through a major realignment just after I left. I did find out that I missed out on an optional severance package by just three months. At first I was disappointed that I potentially walked away from a healthy sum of money; however, if I had it to do over again, I think I would still make the same decision. Getting to spend that time with my kids was worth every penny.
- Changes in Spending. I accurately predicted that our gas costs would go down without a commute. In addition, I save a lot of money because I don’t eat out for lunch, like I used to. However, we still like to eat out for dinner, and we actually probably do more so, because it’s fun now. Overall, the biggest categories of savings are gas, clothes, child care, and taxes.
- Making New Friends. One of the scary parts about leaving my job was that I would miss many of my friends that I saw on a daily basis at the office. I made an effort to get to know more people in my community, especially stay-at-home-moms, to build a new network of support. In addition, I still keep in touch with some of my old co-workers.
- Time with my Kids. One of my main reasons for leaving was to spend more time with my kids. The last six months have been amazing, and I know I made the right decision. I can’t imagine having spent that time at work and missing some of the most magical moments I’ve had with my children.
- Less Stress. No more Sunday night blues. No more working late to finish a project. No more stressing about work. I’m sure I’m healthier now, because my life is much less stressful.
- Life Mix. I always tried to maintain a healthy life mix pie chart [8]. However, now I don’t need to draw a pie chart to determine if I spend my time on the right things…. does that tell you something?
- Education is Never Wasted. I worked hard to get a marketable well paying degree [9] and took some heat for wasting it by leaving the corporate world. Although, I still think that a solid education is worth the investment, no matter where life takes you. None of my education was wasted and I will encourage my children to take advantage of every educational opportunity available to them.
- My New Goals Are Undefined. I have yet to restructure my old dollar plan [10] and determine what my next step is [11]. However, the freedom to not actually care, has been very rewarding.
- Net Worth. You may have noticed that I stopped doing monthly net worth updates. The best part about not working a corporate job, is that I haven’t felt the need to be completely obsessed with knowing how much money we have every day and how many more days I need to work. While I need to update it soon, just so I know our complete financial picture, it’s been very rewarding to finally be able to step back and enjoy life! I’ll probably update it on a yearly basis going forward.
- Less Materialistic. I’m sure it has to do with my new lifestyle, but I seem to be less materialistic. My designer purse sits in the closet, my fancy car is long gone, and we’ve even considered downsizing the house [12]. While I never considered myself one to keep up with any of the Joneses, just by not working in the corporate world, I seem to do what I enjoy 100% of the time.
- Less Connected. As I mentioned in What Worries You Most About the Economy? [13], I am somewhat less connected with the outside world on a daily basis. I spend much less time on the computer reading the news and scouring financial publications. However, doing research to answer some of your questions does keep me somewhat in tune with the current economic environment.
- I Have to Say No. Some amazing things happened with the writing opportunities. I was given various chances to expand, write more, and take on some new projects. I’ve even had the want and desire to spend more time on My Dollar Plan. However, all of those opportunities would involve spending more time than I currently do, and they would all take away some of my time from doing other things. So I’ve had to turn down a lot of great opportunities.
- My Husband’s Plans. My husband stayed at work because he wanted to, and because he carries our health insurance, which is really important considering the upcoming birth of our next child. However, due to some changes at his work, we have been talking about his plans for the near and long term. He hasn’t made any decisions yet, but I’ll keep you posted on what he decides to do.
- I Still Suck at Cooking. One of the things I wanted to work on was my ability to cook. While I’ve been working at it [14], I just don’t have the passion for it that I do for personal finance.
- Pursuing New Interests. With my new found free time, I have some time to dive into some projects that I’ve always wanted to do. I finally have time to pursue my new plans to get started in real estate investing [15] and play with the investments at Lending Club [16].
- Keeping Old Hobbies Going. Even though Rate Chasing with High Yield Savings Accounts [17] isn’t as lucrative as it used to be, I’m still running a substantial credit card arbitrage [18]. However, many of the deals I take advantage of now, come in the mail from previous accounts. The game has changed, but it is definitely still going strong.
- Risks. Our biggest risks haven’t changed. They continue to revolve around kids (how many we’ll have and how much we’ll spend on them), the length of time in the market, changes in our wants and desires, and health care.
What’s Next?
It’s been a fantastic six months, and I’m really grateful that I decided to take the leap. I’m looking forward to the nice weather to finally get to enjoy my time outside.
In addition, with the new baby on the way [19], I’m excited that I don’t have to worry about a limited amount of time to spend with my newborn before having to head back to work.
I can’t say enough about following your dreams and finding happiness in your life. For me, it was aggressive savings from an early age, I opened my first IRA at age 16 [20], that enabled me to take advantage of this opportunity.
If you are planning to do something similar, don’t let what others say sidetrack you from your goals. Just keep on saving!