After I quit my job earlier this year, I lost all my income. Having zero income for an extended period was something I had not experienced.
The TLDR is I learned to spend money more aggressively. That is contrary to what most people would expect to hear from someone who lost all income. Let me explain.
During this period of having no income, I did what most people do. Conserve and conserve. Lawn mowing on my own instead of hiring a landscaping company. Driving my nanny for 3–4 hour round trip on the weekends she goes back home. Doing all DIY repairs at home instead of hiring a handyman.
Then I came across self-development videos online that says that is not what you should do if you want to be rich. Bob Proctor, who shares a lot of self-help messages and published many books, says lowering your standard of living should not be your next step when your income goes down (quote). He says you need to focus instead on increasing income to match your standard of living.
While I tried to reduce expenses and therefore spent my hours doing chores, there was one thing I and my wife did not reduce — the expense for our full-time nanny. We knew that, without our nanny, I was not going to be able to explore new interests and build momentum in anything to generate income in the future. In that regards, I inadvertently followed Bob and other self-help gurus’ advice and invested in myself to start generating income.
After experiencing first hand how the continued spending for nanny was instrumental to my journey of finding the next path, I started gaining more courage to spend more for my self development. I started giving myself permissions to invest in myself at a level I did not dare even when I was making a six-figure salary.
No I didn’t stop mowing my lawn or driving nanny around. I wanted to save some expenses where I can. But I went onto spend money for the following items.
- Tools for starting my YouTube channels (no I didn’t buy expensive camera gears or anything like that. I bought some background props and accessories)
- Online courses for filmmaking, growing YouTube channels
- Supplies and inventory for furniture refinishing experiments (will post a separate article on this)
- Equipment, online courses, in-person training for woodworking
Having zero income changes your perspective on ROI of your spending. When I was earning a good salary from my previous job, I would question whether spending $2,000 for woodworking equipment is worth it. It is just for hobby, I would say. I don’t have enough time to get really good at it to sell my work. Even if I do get good enough to sell, I wouldn’t want the hassle of dealing with clients. Plus any marginal income on top of $100k salary would be insignificant. So I would keep questioning and perhaps decide to defer trying until some unknown future date. I would say to myself, “it’s better to save and save”.
To be clear, I don’t look at ROI as the only determining factor when considering a new hobby. Hobby is, after all, something you do for fun. Looking back, I realize I did not want to get into an expensive hobby (woodworking can be expensive when you keep collecting tools over time) while my day job makes me feel so miserable. It felt as if I reward myself with fun and at the same time further increase my dependency on the income from my job. (Side note: I went on many expensive trips to remote parts of the world for my vacations and that was the best thing I did. I saw these trips as one time things and part of investing in myself as much as rewarding myself and having fun.)
The marginal return from any new endeavors gets worse the higher your current income is. It always seems like money and time is better spent doing something related to your job so you can get a promotion or jump to a different company where you are going to get a substantial increase in your income. Of course, this assumes you love your profession but if you don’t, you are stuck. You don’t want to invest in going further in your career but it is hard to see how any new endeavors with a small marginal income is going to change your trajectory.
But if you quit and have no income, the ROI on these “trying new things” becomes attractive all of a sudden. Not only does any financial upside sound attractive when your income is at zero, but also you know you are making a progress towards finding something you love to do.
In addition to the above realization, I had to remind myself that I did not give up all that income from my job and jumped into the unknown only to shy away from $XYZ I need to spend to try new areas of interest. By quitting, I put myself in a position where I have to give myself permission again and again to invest in myself like I never did during my days as a full-time employee.
I hope I eventually start my own business and get to a point where more hours are linked to more reward. When that happens, based on the lessons I learned lately, I am definitely going to be aggressively outsource chores such as cooking, driving, landscaping and house repairs.
When I was in the job I am not happy with, I could not justify spending money on outsourcing all such tasks. There was no reason other than convenience. The convenience I tell myself I deserve because I worked hard doing things I did not enjoy to make money. But I did not want to get trapped in the cycle of having to rely on my job and its income more and spending more for more convenience.
My mental process back then was to reduce my reliance on the job I did not like, save and save to maximize my chance of escaping one day. What I did not know is money, however much is saved (i.e. so you have $$$ and you can quit, then there is still the question of “now what?”), was not going to fix the problem of feeling unfulfilled. I had to take a massive action now to rediscover myself and correct my course.
Anyway, the overall lesson here is this: saving money and preparing for the future is good and everyone should save to some extent, but do give yourself permissions here and there to spend some money for things you have always wanted to do.
All the money I spent for items above is indeed a tiny fraction of the salary I used to make. You don’t have to quit your job to do what I have done or learn the lessons above. There is a lot of value, even if not measurable, in trying new things to discover your changing interest and feel where you want to head to next in life. Be nice to yourself. Sign up for that class. Start that new hobby. Do what your heart tells you to do.
