Guest Post: Breaking Free From the Corporate Grind Just Got Easier
This weekend, I’m happy to share a guest post from a fellow blogger named the Financial Samurai. Although I have previously documented that Sam is actually my Frugality Arch-Rival, he has recently taken the MMM-approved step of quitting his overpaid-and-overworked job in the financial sector, and these days he’s writing about how great it feels to be free from the grind. He’s also promoting an ebook on how he managed to get paid to do it. I find the story quite informative, just because it is so different from my own (I quit my own final job in 2005 with no expectation of severance or unemployment pay). Regardless of your perspective on the matter, knowledge is power!
Update: As you’ll see in the comments below, this article took more flack than any other guest posting in MMM history. So just to be clear, I am NOT endorsing the method or the e-book by publishing this guest post. Just having a little fun with you. Read with a light heart, please!
—
Breaking Free From The Corporate Grind Just Got Easier
How much do you really need to be happy? When I was an exchange student in Beijing, all I had was about $200 dollars a month to spend and I was ecstatic! I slept on a wooden plank for a bed in a dorm room shared with another fella with no AC. Even at night, the temperature sweltered to over 88 degrees and all we had was a rotating fan to provide us relief. We’d cook our own food in the hallways and eat at the street stalls when we felt like splurging. The worst were the squat toilets, but over time, we got used to it. I was pretty much broke as a college student, but I was happy.
When I got my first job in 1999, I was working 14 hour days in New York City at a large firm. Getting in at 5:30am was brutal, but if I could stay until 7:30pm, I’d get a free meal, so that’s what I did most of the time. I finally had enough money to go on a decent vacation and buy a car, but I felt poor because I didn’t have the time to do so! I gained about 20 pounds and dreaded going to work some days. I knew I wouldn’t be able to last in the cut-throat world of finance.
Thankfully, I moved to San Francisco in 2001 where the lifestyle is much more balanced. Most of the people I know who work in finance, consulting, venture capital, and start-ups are here because of the community and the better lifestyle. It’s life first, job second vs. job first and job second in New York City! I was still working hard, but my happiness skyrocketed. I was so relieved to be out West that it took another 11 years before I finally decided to retire on my own terms in 2012!
HERE’S HOW IT WENT DOWN
Some of you might think the shekels I earned online since 2009 was enough to allow me to retire. The fact of the matter is I earned hardly anything in 2009, and only until 2011 did I earn about 30% of my day job income. The reason why I was able to retire by 35 was because I spent 13 years building multiple income streams after saving 50-70% of my after tax income each year.
Every dollar I saved was split relatively evenly between CDs, stocks, and real estate. With an average compounded return of somewhere between 10-15%, by the time I retired, my three main passive income streams were generating roughly $7,000 a month in gross income. Please read, “Achieving Financial Freedom One Income Slice At A Time” if you’re interested in seeing how the income is broken down and the other active income streams.
My original goal was to work another 5 years until age 40 so that I could keep on saving aggressively and allow my passive income to grow to $10,000 a month gross. However, I didn’t anticipate I’d be able to turn a hobby of writing about personal finance into another viable income stream! Perhaps working in finance and getting an MBA were my hints that running a personal finance blog might be a fun and congruent thing to do long-term. At the time, I had no idea!
FEAR AND UNCERTAINTY
It took me two years to figure out how to engineer my layoff because I was afraid of doing the wrong thing. What if I ran out of money? What if my friends laughed at me for taking a risk at starting my own business? What if I had a change of heart six months later and wanted to go back, but couldn’t?
I also didn’t know how to engineer my own layoff in order to get a nice severance package back in 2010. Do I say, “Yo boss, give me a hundred grand and I’ll be outta your hair!“? After building up my various income streams, I needed some sort of kick in the pants to make sure leaving my corporate job was the absolute right thing to do. That’s when I started doing a ton of research on employee rights, understanding the key players in the layoff process, and helping my friends who wanted to quit anyway, consult them on their separation packages.
It is amazing what employees DO NOT know about their rights. I have friends who quit their jobs who still think they are guaranteed to get unemployment benefits afterward. If you quit your job, the state makes the assumption you do not need money, and therefore they will not pay you unemployment benefits! The employment agency must corroborate with your employer what happened, because it is your employer who pays for unemployment insurance!
One friend quit his job a week before his entire department got let go with two weeks per year of service as severance. Not only that, each employee who got let go received a full year of health care benefits and two months of mandatory base pay as mandated by the WARN act of California. Can you imagine being at your firm for 10 years and missing out on over $60,000 in severance? I bit my lip and bought him lots of beers to…. celebrate!
After a couple years of research and engineering my own layoff, I decided to write a book to help others as well and level the playing field. I’ve interviewed numerous people who have quit, and each told me they were too afraid to bring up the topic to their bosses, or didn’t know how. I was afraid too because corporations have HR personnel and lawyers to protect their interests. But what about the people’s interests? We have more rights as employees that we know!
DON’T BE AFRAID TO BREAK FREE FROM THE CORPORATE GRIND
After 13 years of doing the same thing, my interests started to fade. I knew that I could no longer give 100% to my employer if I continued for much longer. It wasn’t fair to them, to hungrier candidates, and ultimately to myself. There is no point saving so aggressively for so long if I wasn’t going to use the funds for something new. When I figured out the steps it took to engineer my layoff, I knew I just had to make a move.
Just 20 years ago, it would be impossible to make a living online because the internet had not fully developed. Now, the internet has made working in an office almost obsolete for many industries. Many of my friends at Google, Facebook, and Yahoo work from home two days a week no problem. Furthermore, long gone are the days where corporations take care of their loyal soldiers for life. It’s a slash and burn economy and you have to take matters into your own hands!
I encourage people never to quit or get fired from their jobs. If you quit or get fired, you are ineligible for unemployment benefits which run $1,800 a month / $21,600 a year maximum for those looking for new in California. You aren’t eligible for employer paid health care as part of a separation package. And you certainly are not eligible for thousands, if not tens of thousands of dollars in severance! If you plan your exit wisely, there is a great chance you can walk away with a small fortune.
Readers, have you ever engineered your layoff? What is keeping you from breaking free of the corporate grind? Do you have a target age or a target number to reach before early retirement?
Article: How To Start a Blog
Where to next? Check out a Random Article
|
Stay in Touch: Subscribe to posts by e-mail, RSS Feed, or follow MMM on Twitter and Facebook.
Join the Conversation: Learn from Like-Minded Mustachians in The Money Mustache Community |
Mr. Money Mustache is a family man living in the United States who retired from work, relatively wealthy, at about age 30. After several years of retirement, he noticed that his still-working peers were envious of his lifestyle. They were making more money than he ever had, yet they were somehow still broke. So he decided to write this blog to educate the world on how it is done.
I just recently started my new job so no need to engineer my own layoff right now. Maybe a few years down the road if my blog ever takes off. That is a long way away right now though.
I find this article to be really out of place. I understand MMM might have a more subtle reason to accepting it, but if you strip away the fact that this is a meta post that is really trying to sell an e-Book that contains the actual content, the content is still about committing fraud.
If you do what is suggested in the article and collect an unemployment check you are committing a crime. This is not an opinion, this is a straight up fact.
Unemployment support is a social contract organized via the government that allows people who are actively looking for work, the means to support themselves during that process, it is not extra “severance” for you to extract from the system when you choose to retire.
I agree with your sentiments on the ebook, but I don’t think he’s advocating unemployment fraud. I believe he’s advocating getting a severance over getting nothing when you leave employment.
In my state, if your employer gives you severance, you aren’t allowed to take unemployment without paying the severance back first.
Severance pay is helping him try something new, Like creating a Business in the future, that could possibly generate job positions.
Thanks! this gives me so much hope that financial freedom is attainable! I want to find work I love and enjoy it but just not have it consume my life.
Chase
Definitely don’t settle if you don’t have to! I loved my work for the first 10 years in a row, but like many things, it started to get dull after a while. Stick w/ an aggressive savings plan, enjoy the journey, and you’ll wake up 10 years later and be AMAZED at how much you’ve saved to do other things!
Because I’m so grateful for the usual content you post here MMM, I want to say that this kind of post is not why I’m subscribed to your blog.
I’m going to disagree and say that this post is not interesting or informative. Sam tells us he enjoyed poverty, then worked a hard job he didn’t enjoy, saved aggressively, and quit. The one generally applicable tool he offers (the idea that when you want to quit you should get your boss to lay you off) is attached to a $38 e-book, sold on the fear of being like this guy Sam knows who lost $60k.
This post doesn’t tell us how, and it barely tells us what.
I really respect that when you create knowledge you give it away for free. That aligns with my own values and actions.
We all know that you make money off this blog, but you don’t especially promote self-promotion itself as a path towards financial independence…you just demonstrate by example that it’s one possible retirement job among many.
If more posts like this show up, you’ll lose me and other similar readers: not to anger, but just to boredom.
Oh, here we go!
I just knew it was coming, because it does with almost every guest post with a less, shall we say Mustachian, perspective.
I love it – thanks for the honest criticism (although I’ll continue to post whatever I feel is appropriate and risk whatever wrath I might incur).
Guest posts are sometimes about reinforcing the core ideas of this blog, and they’re sometimes about different perspectives. Why do I like the Financial Samurai? Because he’s so different from me! He earns and spends much more, and he’s not shy about making loads of money online. (But note that he’s also a massive donor to charities, so even here there is the concept of a greater good).
Even if you’d do things differently yourself, I find it extremely informative to know that there IS so much money to be made online. It would never occur to me to charge more than $2.99 for an E-book, for example. Understanding this trend will help you with your own future businesses, because sales and advertising are increasingly done this way.
You’ll never see another post exactly like this one here on MMM, but you WILL see a variety of posts on other shocking topics that are totally outside my own area of expertise. If you find that boring, then best wishes to you on finding your entertainment elsewhere!
Sounds like I should make allowances for how I’m slightly off your target audience. But I am glad to understand a bit better how you see this post fitting into the MMM master plan.
Thanks Joe – that’s the beauty of it. The mystery of the MMM master plan. What is it? Maybe I’m posting guest articles just to remind you how much you like regular MMM articles? Maybe I’m search engine optimizing? Maybe I’m just trying to learn about the blogosphere, or to teach others about it? Maybe I have no idea what I’m doing at all and have no master plan at all?
Or maybe even this very comment is part of my master plan, designed to plant ideas, confusion and speculation as to what the Master Plan really is? Can you even take the suspense?
Neither can I… I’m going to get up from this damned computer and go play with my son before his bedtime hits. :-)
“Maybe I’m search engine optimizing?” Quote of the week MMM.
That was the best response I have read on your site.
I’m going to defend Sam. I’ll agree that this blog post reads fairly terse, and a bit self-promoting, but that’s not necessarily a bad thing. I read MMM for much of the same reasons you do, I suspect, and I read Financial Samurai for exactly the reasons MMM explains in his reply. Sam has a very different perspective on money from MMM; he spends more, of course, but is more conservative in his investments and money allocation. His blog posts tend to be personable, similar to MMM, although his values vary wildly.
Personally, I do prefer MMM, but I also read FS for a different perspective from another intelligent writer.
Glad to hear you are a reader. I always welcome different perspectives as it helps me adjust my own.
I share your feeling about this article, Joe. Of course it is not that hard to quit if one already has a $7000 monthly income stream, plus “online business” income. And the blatant advertising of the ebook is off putting.
Poja, how come you haven’t bought my book yet?
I didn’t write the intro. All I did was mention in my post that “I wrote a book”. I didn’t say go buy my book or put any sales language in it.
Let me know your feedback after the read! Thx
Joe, thanks for your kind words. Let me know of your posts and I’ll come check them out! Cheers
But I…I don’t have any posts. :.(.
I think you deserve a more serious reply.
If you’ve interpreted my words as kindness, then you’ve misunderstood: they were primarily criticism.
Since you’re a professional in monetized blogging, I don’t have to tell you that this is pretty boiler plate ebook advertisement copy for a blog. If you mix value and topical interest in with the influence, there’s nothing wrong with that. I understand that we consumers are responding less and less to explicit advertisements, and that marketing has to be embedded in the content.
So I can understand why you’re trying to make sales here. And I can understand why MMM would take some quid pro quo and invite you to post here. Fine, I pay nothing for what I get from this site, I don’t mind my page-view being sold like that. And I’m smart enough to know what your e-book is worth to me.
But I will point out your use of fear in your sales pitch in the anonymous friend who missed out on $60k; you introduce a stress to your reader and tell them how it can be resolved via your credit card processor. Stressing the consumer is a technique that’s corrosive to society.
Given the corrosiveness of your marketing techniques and the value I find in this community, I’ve called your post out.
Well said and I agree.
Well said Joe.. but I still wish you didn’t think I sold your page view!
I was using the term loosely. :P
My impression was that you were hoping to reach a broader audience with the MMM message of enlightenment with a guest post swap, and had to publish some blog spam in exchange.
Agree with Joe…and can also see MMM’s decision of including the post. But, I have to say, it did sound like a late night commercial. Someone always seem to have the “secret”, the “key”. I do not go along with that kind of marketing.
Anyways, I barely leave replies, but MMM, I really enjoy your blog!
Very upbeat post, but I’m curious: what exactly does “engineering your own layoff” entail? You said it several times in the post, but were 100% lacking on any details.
Did you just say to your boss “Hey, I really don’t think I should continue to work here anymore, do you think you could lay me off?” I noticed that you said not to get fired, so I’m assuming that means you didn’t do anything drastic/hilarious.
Spill the beans! :-) Or maybe that’s part of your writing income stream? Perhaps the details are reserved for those who have purchased the book? No judgement; I’m just guessing here.
Ah, I see that my concern was already addressed (while I was typing my initial comment, I guess) by Joe, and replied to by MMM himself.
I totally see where MMM is coming from by sharing this guest post (“look, you can make money online like this guy!”) but I definitely agree that there was a gaping hole of practical information in the post. While this won’t drive me away as a reader, it will just be the kind of post I glance over and be like “huh… glad to know someone else made it to FI…moving on.”
Howdy Heath! It means being meticulous and planning for the day to come, b/c it comes for everyone eventually.
All about building relationships with the right people, and undertanding the concerns of your corporation.
The one thing I’m accused of is being a super optimist. If optimism is a crime, damn me all you want! :)
Best, Sam
Super optimism is a trait that you and MMM share for sure. It will serve you well. It’s hard to stand up to the Mustachians!
I do think that without knowing the actual details of what your figured out with your employer, it’s hard to know how “ethical” this engineered layoff really is. Personally, I think it’s great to talk to your employer and see what can happen — start the conversation. But, I take issue with using UI as supplemental income unless you really need it.
As an aside: I deal with UI claims at my part-time job sometimes and it seems that EVERYONE tries to claim UI, regardless of whether they need the money or not and regardless of whether they were fired, laid off, or quit, or are on temporary unpaid leave. In fact, I recently had a back and forth with the UI department for one state about an employer that quit (and only worked for us for about 6-7 weeks) and they still awarded him the UI benefits in the end based on the facts I provided.
Maybe I’m pointing out the obvious, but Sam has not retired. He has just gotten to the point where his formerly part-time side job of blogging & writing is now his business. He’s in much the same position that I am as an independent software engineer, and I sure as heck ain’t retired!
Easy way to tell: how much is the bottom line on your annual Schedule C? If it’s about what you spend to live on (or more), you’re not retired, you’re just in business for yourself.
Uh-oh, is Jamesqf part of the Internet Retirement Police now? ;-)
From what I’ve read, I think FS has more than enough investment+rental income to meet his basic spending, even without his blog/book stuff. It’s just not described in this post.
I’ll also agree with Heath – Samurai is a bit vague and should lean towards giving away most of the general information in the book, instead of hoping that secrecy will increase sales. But that’s just my own style.
Finally, in case there’s any question about it – this is not a paid guest posting and I don’t run those at any price, although I get about 5 annoying emails from web companies each day asking for rates. I did however do a guest posting over on FS a while back, so it’s fair to share the airwaves in return. Just a little Saturday/Sunday controversy and entertainment.
Yes, I guess I am, when you get to the point where any self-employed businessperson fits your definition of retired.
As for doing what I want… Well, if you restrict the wants to what’s possible in the real-word without multiple billions, I was doing that back when I was employed by (a very large computer company which shall remain nameless). I mean, I got a challenging research project out on the bleeding edge of technology, a couple of very large supercomputers to play with, and they paid me money too! What more could a guy reasonably ask for?
We need to write a quiz on whether you are really retired or not.
One question might be: if someone asked you to drop everything and go on a biking trip across Canada, could you just go without a plan of when you might return?
Obviously you’d have to answer to family or any obligations there, but if you have an employer to answer to and would have issues with money, then you’re probably not really retired. :)
Well, I’ve never claimed to be retired. Emphatically the opposite, in fact: barring a disastrous decline in physical or mental health, I never will voluntarily retire.
Now I am self-employed, and financially independent, so that I could manage a minimalist lifestyle on my investment income alone. As for the bike ride across Canada, if I could get someone to take care of the critters while I’m gone, and had a chance of decent internet connections at stops along the route, sure. Bring the laptop and a solar charger, and I can put in several hours of work a day, which should keep the clients happy.
MMM, from the IRP, what are your thoughts on retirement income allowability? Do you think James and others would be more amenable to me being retired if I earned nothing from passive income, or a much smaller amount?
It’s not your passive income that matters to the question of your retirement, it’s the active income you earn from your ongoing work that makes you not retired.
Say for instance you’re a successful author. You may set your own hours, do what you want to do when you want to do it, even have a good bit stashed away from that first best-seller. Does that mean you’re retired? Not unless you’ve quit writing, it doesn’t.
Seems to me the focus on retirement in this blog is a mistake, since it’s much more about how to achieve financial independence and maintain a life through non-traditional kinds of employment.
Cool! My def of retirement is do what I want, when I want, whenever I want. Probably similar for others.
I just retired early and quit my job. The company I worked for was taken over by a larger company and there was decent severance package in place if I was laid off. I waited awhile to see if I would get laid off, but there was too much work to do and it wasn’t going to happen. That was my level of effort at engineering a layoff.
I wasn’t ethically comfortable with taking more drastic measures to get laid off because I worked with a great team and I didn’t want to screw anybody on the team.
rjack, congrats! There’s a lot I dedicate in the book to those who feel it is wrong to engineer their layoff.
It’s actually VERY positive for everybody if you do it the right way. I was a manager for the last five years of my career and welcomed good and poor performers to come to me w/ their plans to work something out.
When we found out we had twins on the way (already had a 2.5yo daughter) we started making plans to move back near family. My wife was on paid maternity leave, and I was planning to take paid parental leave when hers finished. There was a fair chance I wouldn’t return to work, so I looked into redundancy options (global telecommunication equipment manufacturer – there’s always redundancies!)
I managed to secure one, so my payout was 2 or 3 times as much as the paid parental leave would have been. It would not have made any difference to the decisions we made, but the extra money was certainly welcome!
Nice work! “There are always redundancies”… BINGO! You’ve got to just ask in the right way.
Retired vs. Not retired is a silly argument. Suffice to say that Sam has gained enough income to do what he wants…which happens to be his own business right now. Post was interesting, and told me about an aspect of the FI end game (quitting your job) that I hadn’t considered before. Reading things that challenge me is why I love the ‘net!
Great attitude!
Yes, it is my goal to let folks know from a manager’s perspective, and someone who just negotiated a healthy severance package that everybody should try their best NOT to quit their jobs.
Instead, engineer a layoff. When you are laid off, you get unemployment benefits, insurance, WARN act benefits, and potentially a good amount of severance.
This post seems to have value in a limited number of situations, i.e. a potential Mustachian who is close to being able to quit outright to reach FI but who also currently works in a company or industry where layoffs are about to happen. Obviously from reading this Financial Samurai (FS) says it is better to wait it out for the layoff so that you get the benefits package and public assistance to reach FI quicker.
I am glad that FS found new a line of work or new retirement habit that makes him happier. It is really a tale about someone working in a job that did not fit them (in FS’ case being in finance in NY city) and sticking around for way too long.
From this post, $7000 per month passive income sounds excessive to me, let alone $10k per month. One really does not need all that money.
Of course, one could have the debate as to whether it is more beneficial to help the world by bringing in a larger income to give more to charity or whether it is better to bring in a smaller income but give more time to charities or good causes.
Personally, I think it is more rewarding to give your time rather than checks. You do get some satisfaction from writing a large check to a charity, but then what? You get a thank you but never really know what that money went to help exact.
Instead, I have to agreed with the MMM’s style of controlling your spending even if you are not rolling out the huge checks every month to your favorite charity.
Any meaningful change in society always starts at the grass-roots level anyway. Change always happens from the bottom up, not from the top down. Wouldn’t it be much more rewarding and satisfying to personally work with the ones you want to help and to be part of the boots on the ground in making change happen? What we have found in this blog community is that the key to freeing up time is to control spending. Besides time is money. If you can help a non-profit by volunteering your time, that is less money that the non-profit has to spend to hire someone to do the same work.
Thus, I believe it is ok to let the passive income come down to more reasonable levels, i.e. one can live on 20-30k per year if their house is paid off in full; I don’t think it is necessary to sell an eBook to build up your passive income to get it to really high levels, but that is just my own opinion, everyone has their own style. There is no one best style or best way of doing early retirement.
Thanks for your thoughts.
It’s important to remember that passive income is what works for others. Given I lived/live in two of the most expensive cities in America (NYC, SF), my goal was to get to $10,000 a month gross by the age of 40 so I didn’t have to worry any more.
The median priced home in SF is $700,000 and the median 1 bedroom in Manhattan rents for around $3,200 for example.
I agree though, that after a while, you don’t need that much. And after a while, making money just becomes a game and is a byproduct of doing what you love to do.
I could move to my paid off house in Hawaii, but for now, I plan to stick around SF for the next year or five at least b/c I love it here. Hawaii 2-3 months, SF 6 months, and travel 2-3 months a year with Tahoe in beween is the plan.
The energy here in the Bay Area is a blazing!
S
And that sounds like a pretty sweet plan!
Why not right? I’m retired! :)
The best way to never feel homesick while on vacation is to just stay in your vacation homes.
The link he cites is more interesting than this post: There we learn:
“Remember, the thesis of “How To Retire Early And Never Have To Work Again” is that all one has to do is save 55%+ of their after tax income for 18 years from ages 22-40, and s/he will have 20 years of living expenses covered to not have to work until government assistance kicks in.”
And:
“Rich Hot Spouse: One of the secrets to early retirement is having a working spouse. The secret to a happier early retirement is to therefore find a hot and rich spouse! You can do jack doo doo and claim to the world how you retired early, so long as your spouse continues to work and provides you with goodies and healthcare. It’s no joke that many people make it a mission to look for a wealthy spouse. With the Facebook IPO coming out in May, here’s my advice to you on how to snag a Facebook multi-millionaire for your own!”
I find this amusing and quite Tim Ferriss-esque. Most of it just goes to show that there’s more than one way to skin a cat.
And that it’s extremely important to keep and open mind! Which MMM appears to have.
As Bruce Lee is said to have said, “Take what is useful, reject what is useless and add something of your own.”
Dragline, great to see you digging into other posts on FS.
I hope this Facebooker I’m meeting this Wed turns out to be solid!!
Isn’t it a bit disingenuous to accept unemployment when you are not only not looking for work, but financially independent?
Being FI doesn’t matter, it’s insurance taken out of your pay during your employment.
And it’s not disingenuous to take unemployment while not looking for work, it’s outright fraud. You have to attest before collecting every check that you are looking for work. And sometimes have to even offer evidence that you’re looking, such as providing a log or contact information for places you’ve applied for work.
If Sam’s actively looking for work each week,no problem. If he’s kicking back and calling himself retired with zero intention of looking for work while he collects unemployment benefits, he’s committing fraud.
Hi Mike, you seem to be speaking a lot from experience. How long did you collect unemployment for? Did you finally give up looking? What are your plans for income after your layoff?
tx
Hey Sam!
You’ll bounce back from this. Chin up!
I agree with Elias, and I’m surprised that unemployment insurance fraud isn’t a more common theme in these comments. The state systems are being massively subsidized by the feds currently with the timeframe extensions, so a monthly check is not something that FI retirees have earned by paying in. And I don’t feel good that both my federal taxes and my premiums paid into the state systems are funding FS’s jetset lifestyle because he so cleverly gamed the system.
Analyze your company’s business cycle so you can time your retirement to volunteer for a package so some other sap doesn’t loose his job? Sure, but starting retirement by “engineering” a layoff so you can get unemployment insurance is more akin to “engineering” a way for your house to burn down because the insurance valuation is higher than what you could get on the open market. Social security is something you deserve because you’ve paid in, but any kind of insurance is not something you deserve for paying the premiums, it’s only deserved when you suffer unexpected loss.
“I’m surprised that unemployment insurance fraud isn’t a more common theme in these comments.”
Me too. My guess is that it’s a combination of not reading the article, or not bothering to read it for meaning. There are probably also some people who see nothing wrong here, like FS. Or maybe we’re only getting part of the story and jumping to incorrect conclusions because of the lack of detail.
I am having a very hard time not jumping to conclusions, though. I’m sure that FS has lots of great lessons to give on how to run your finances. But as an introduction to his strategies, “step 1: set yourself up for fraud” is pretty vile.
The other thing that makes me angry is how many times I’ve heard the well-to-do express outrage at their tax dollars going to support unemployment benefits or welfare. “It’s a disincentive to work!” They say. Apparently they were right.
“The other thing that makes me angry is how many times I’ve heard the well-to-do express outrage at their tax dollars going to support unemployment benefits or welfare.”
I have quite a few friends who actually have parents who have been receiving government money in the US for some time, and some of my friends receive benefits themselves. When I heard about how many of the people receiving the money only work occasionally because they don’t really need to, the last bit of biased, Liberal sympathies went out of me. There are many that actually could have pulled themselves out of the situation where they take money from others without any sort of gratitude or drive to repay what is not theirs.
Aside from this, they are truly great people. I have only brought up the subject with one who is more open-minded, and they have decided to respectfully disagree. I can deal with that, but claiming that this sort of abuse doesn’t happen is, IMO, rather naive.
I think it’s important to have compassion for those who are unemployed. Until you’ve sat down with several dozen folks, and gone down to the unemployment office, I encourage you not to judge those who are collecting.
It’s interesting how you and so many focus on unemployment benefits, when that’s not the focus at all. The focus is on negotiating a severance package.
Why do you think you and others are focused on unemployment benefits?
This reminds me of the guy talking about getting Free/Reduced Lunch for his kids because he retired early, and his income was only like $25,000 or something. (Massive assets, low steady income.) I don’t know if it’s fraud or not, but it definitely felt wrong to me.
Aren’t unemployment benefits premised on the notion that one is seeking a new job? Unless I’m misunderstanding what’s going on here, this reminds me of Ol’ Dirty Bastard pulling up to the welfare office in a limo. Retiring on your own terms is admirable, but I think gleefully boasting about soaking up money intended to help people in genuine need is repugnant.
Unemployment benefits is premised on those who are unemployed and seeking a new job and who have paid into the system via the employer.
Hence, you are correcto!
Cheers
Except you did not pay into the system. Your employer does. You have not paid one dime into the system unless you were an employer.
I find it hilarious that a self proclaimed anti-consumerist is posting a blatant ad for an e-book. Kind of weak, MMM.
This is how the whole blogging/e-book writing/lifestyle design industry works. Sam writes an e-book on whatever and then guest posts on a bunch of blogs pitching his product.
Is it weak, Alphabet, or have you just made a wrong assumption about why I posted it?
Of COURSE I didn’t run this guest post to try to help sell the $38.00 e-book. I don’t give a shit about the online income of any lifestyle design blogger, including myself!
But I do find this teeny industry interesting, if you expand the context beyond blogging about blogging and think about all forms of online writing. Why? Because it’s replacing paper book publishing, and it’s nice to see the power being returned to individual authors and stripped from traditional publishers.
Let’s ignore the perceived quality of any particular book, and think about the idea that anyone who enjoys writing can now write a book on any topic, and potentially make a decent family living from it. If they understand how to get the word out. Isn’t that interesting? Imagine if they were books on how to make a great canoe, or create your own geothermal heat system and live off the grid, or how to get a university degree at minimal cost?
My anti-consumerist soul is still here, and it grows stronger as I age. I still have a long way to go, as evidenced by the “my deprived life” post, but I think you’ll be convinced if you keep reading here.
If your anti-consumerist soul is still here, why did it just allow a massive chunk of advertising on your website? So you didn’t plan it to try and help sell a $38 e-book – is this because FS wasn’t upfront about his planned content?
It was an article devoid of worthwhile content, a mere sales pitch – which represents a sad decline in standards for this website.
Fuckity Shit.. do I need to spell things out in absolute detail to avoid getting accused of being a sellout for a post like this? All right, here we go:
This post is an example of one end of the spectrum of approaches to financial independence and early retirement. I’m not endorsing or even defending this method.. in fact, if you read through more of this blog (and even my introductory paragraph), you’ll find that my approach is pretty much the opposite.
By showing that this end of the spectrum exists, while silently demonstrating that I didn’t need any of it to retire much earlier myself, I am saying “be true to yourself – you don’t have to prioritize money over your personal values to succeed”.
But part of the subtext is that I respect you, the MMM readers, to not be a bunch of sheep. I’m not afraid that you will get sucked in by any advertising for a product that has no value for you. We’re all big fancy adults here, and we can twist out our zoom lens to think about a guest post in its full context, rather than just running blindly in whatever direction it might tell us to run.
I believe we can study all sorts of things and respect the cleverness behind them, without resorting to criticism that might hurt the feelings of the people that we’re learning from.
Then if we want to make a statement about our values, we can do so by living those values. (You can also start your own blog about them if you want to make an even louder statement ;-))
Preach on!
“But part of the subtext is that I respect you, the MMM readers, to not be a bunch of sheep. I’m not afraid that you will get sucked in by any advertising for a product that has no value for you. We’re all big fancy adults here, and we can twist out our zoom lens to think about a guest post in its full context, rather than just running blindly in whatever direction it might tell us to run.”
This is money! This is why I read the comments! MMM puts so much zing in his language. As a student of rhetoric and writing, this is powerful sauce he’s cooking with.
As part of our cultural moment, I think we’re losing the ability to argue forceful positions respectfully (failing to celebrate original thinking is another way of putting it). So I enjoy this kind of writing because the path to financial independence will be easier to find when I am reasoning for myself.
MMM did you actually read my post?
I didn’t mention the method (planning and actively engineering a lay-off). I have no problems with it as a technique. I would have enjoyed the post if FS had shared some of the knowledge about how to do that. The lack of “how to” content is my issue.
I would be complaining just as loudly if you wrote a post telling us that you made a beatiful bookcase out of pallets – and then dedicated a large proportion of your post and responses to pushing your e-book about how to do it.
I also disliked the post. I don’t particularly like the cut of this guy’s jibe. There’s a nasty “Internet Marketer” and-you-can-too! edge to his tone that I can palpate from here. People who are really good at this make you forget that you’re being sold to. They know how to level out the false optimism with a dose of reality.
HOWEVER, MMM offered this as a different way of doing things. He took an opportunity to create dialogue. He’s not about never spending money; he’s about getting value from every penny. This content, like all his other content, is free. I don’t HAVE to spend $38 to get value from the content which, at minimum, has helped people ascertain what their values are for making the big leap away from official employment. As another example, MMM recommends getting a good deal on credit cards, but I don’t HAVE to get the ones he plugs on his blogs to get value from the content. Likewise, there are people who may not have considered getting laid off on purpose but who like the idea now that it has been presented.
Hopefully, like this guy did, they’ll find out on their own, but if they want to, they can throw $38 at this guy.
It is disningenuous. Those unemployment and severence dollars could go to someone truly in need. I love this blog. Check it every morning. This post I can do without. You can achieve financial independence without screwing your employer or the system. If you couldn’t give 100% to your employer, as you stated, then you should have just quit. Why does your employer, or I, as a consumer of your company’s products, need to pay for your lack of enthusiasm for the job?
One way to engineer your layoff is just to ask, because some HR people usually don’t like firing people almost as much as you don’t like being fired. I heard a story about someone who wanted to retire so they went up to their boss and said he wanted to be laid off because he heard that they had to do layoffs. His boss was happy to lay someone off that wanted it as opposed to someone who needed the job. ( I don’t know where I heard or read this, it could of been one of a dozen blogs I read or it could have even been this one).
Yes! I’ve heard this too. Just ask, be honest, and see if something works that is beneficial for both you and the employer. I don’t think it’s something that needs to be “engineered”, but it’s amazing what can happen when you ask for the things that they want.
I still remember how terrified I was to ask for my first raise, but I got it and I learned that it’s okay to ask your employer for things (within reason of course).
The “honest” part is important. When I read this post I too felt distaste for its content. It seems to go against the premise behind “Get Rich With Good Old Fashioned Honesty” http://www.mrmoneymustache.com/2012/04/11/get-rich-with-good-old-fashioned-honesty/ that I enjoyed so much. I may be wrong in my assumption, because, as others have pointed out, he didn’t give the details of how his severance and benefits were “engineered.” If he did do it honestly, why not release the details, if he’s not using them to sell his e-book? In which case, I would have preferred a guest post on something else with actual information in it.
I agree; there’s nothing wrong with asking.
My sister did this, as she had returned to school, and was earning her degree to embark on a new career. The company was having some problems, she knew layoffs were in the cards, and she figured that the fastest way to finish her degree was to go full-time, and use her severance and savings to tide her over (I don’t know if she applied for Unemployment).
So she let the company know that if more people were to be laid off, she wouldn’t mind being among them. It was a triple win: because she didn’t want/need her job anymore, the company could lay off someone without too much angst, and someone who needed their job got to keep it. Win-win-win.
It took some doing, but it looks like I managed to convince Sam that he doesn’t need his job to live a full life.
Thanks for your inspiration to allow me to kick back! It’s definitely been enjoyable to not have to work anymore and just earn passive income. Just booked my tix to Europe next month and will be there for 3 weeks and am pumped!
That sounds great! Don’t forget to churn out a couple more low-brow e-books while you’re there! I’d hate for your “passive” income to take a dip.
WOW!
First of all, I’d encourage both of you to take a break from ridiculing each other’s arguments, made from diametrically opposed ways of achieving happiness. It’s fun and I can see exactly why each point feels like a satisfying intellectual punch as you deliver it, but we need to respect the time of the other people who are reading all of this.
Second, I looked at the post mikeBOS linked to above and was highly impressed at his presentation of a more Zenlike approach to early retirement satisfaction. Compared to him, Mr. Money Mustache is a caffienated monkey jumping around and screeching unnecessarily about achievement and progress.
So Mike.. any interest in doing a guest post here on some upcoming weekend, to restore balance?
I’m just having fun with Mike, MMM. He has a great story and I like his blog title “lackingambition.com”. Understanding the psychology of wealth is very fascinating. I’d love to read a guest post from Mike!
With all the unfortunate problems that Europe is having, a European vacation is starting to look more affordable for everyone. In 2008, the currency conversion was 1 euro = ~1.5 dollars, last I checked it is now about 1 euro = 1 dollar, it might even be more skewed towards favoring Americans cost wise in the future depending upon how things go.
Of course if Greece gets kicked out the EU and suffers more inflation problems, then every American Mustachian will be able to take a week vacation in Greece cheaper and then it would cost to take a weekend trip to Columbus, OH.
Funny you should mention Europe. Literally just booked my RT tickets to Amsterdam and up the Nordic for next month. Thank goodness the Euro has weakened! Should be a fun 3 week jaunt, but too bad one needs a card to eat pot brownies now.
Travelling to Europe (and taking advantage of a cheap Euro) sounds like fun, but as I write this, the current exchange rate is $1.23/Euro. The dollar hasn’t been at parity with the Euro since 2002 or so, but (for Americans) it is moving in the right direction.
The main thing I find interesting about Financial Samurai’s story is that he seemed decidedly happy with his work (and obviously his pay) and while retirement was a possibility, he didn’t seem interested in actually taking the plunge.
Then, he went on a short leave from work (one month, I think) and realized that there was more to life than work. BINGO! That’s interesting because it’s a huge barrier for lot of people. The post he wrote on his site about what he learned from his leave is probably the most interesting post on his blog (for me anyway). I would encourage everyone to try this if possible…I took a 12-week leave from work once and I was prepared to quit if I didn’t get it, but surprisingly, my employer allowed it (without pay).
So, the next hurdle is that he feels he can’t leave his job without getting something out of it. While, I can’t really relate with this point of view, it is a real problem for a lot of people. It’s hard to leave a job that in some ways may provide easy money.
For me, I just dealt with it, left, and then never thought about it again. The idea of filing for unemployment is something I would have never (and still wouldn’t) consider. I gave a 3-month notice, trained everyone that needed to be trained, and I thought more about how I was leaving things for my employer and the employees left behind. As a result, I ended up having a great departing relationship with my employer and still do many years later.
E-book aside, I do think that FS made a real transformation on his sabbatical that allowed him to take the leap into early retirement. I also think that this is only the start of his journey. In 5 years, he might have a very different perspective on things.
HI, this is a very good point you are rising:
One has to get out of the rat-race to really understand the own situation and truly find out the own preferences and needs.
Currently I am not yet interested in early retirement but I try to find a way to have a break of at least 2-3 months every 2 years, just to regularly get some distance between me and my job.
One break of 4 months is currently ongoing, thanks to German “Elterngeld” (paid parental leave, see my blog-post here: http://gooddaytolive.wordpress.com/2012/05/31/414/ ).
Cheers,
woodpecker
__________________
http://www.gooddaytolive.net
You highlight one of the keys of the book: Having a great departing relationship with your boss, as well as colleagues and HR managers. Once you’ve developed the specific good relationships with the players involved, making things happen becomes much easier. Figure out a way to make them look good, and address their issues, and they will have no problem laying you off with a severance package.
I was willing to accept a 36 month living expense package, but got a little more than double that. Employees don’t realize their right, and the laws of the state and federal gov’t, so they quit. It’s a hard maze to navigate, so I wanted to bring power back to the people.
Thanks for your thoughts Mrs. MMM!
“He went on a short leave from work (one month, I think) and realized that there was more to life than work. BINGO! That’s interesting because it’s a huge barrier for a lot of people. The post he wrote on his site about what he learned from his leave is probably the most interesting post on his blog (for me anyway). I would encourage everyone to try this if possible.”
This is a great point. I actually just wrote about how, properly handled, being away from work can give you time to reflect on what you really value and to seek ways to realize/maximize that value. I had a similar “down time” experience many years ago. Unlike FS, I didn’t receive any severance, but I did receive unemployment benefits. I’m glad I did. It gave me the flexibility to rethink my working career and how I wanted to live my life. There’s certainly no shame in that!
Hard for me to tell what this post is “about”, which is why I think some of our regulars are less than thrilled. I would have enjoyed this more if Sam had riffed on his sunken cost perspective. How much of the attachment to the job came from thinking about the years of sleeping on a plank etc.? This is an issue I’m dealing with myself — my job is usually fun/rewarding and pretty high-paying, but I wonder if I hold onto it in part because it took me 13 years of school and post-docs to get it.
I’m really thrilled you guys have touched upon unemployment benefits. This was a great topic during my research as a lot of folks provided feedback that, “they’d feel ashamed to take unemployment benefits,” or “embarrassed.”
Unemployment benefits are paid by your employer, and ultimately by YOU in the form of a lower wage due to the added cost by the employer. When you leave your job to look for a new career, or a new direction, you are simply collecting back money that you paid into the system. It’s your money.
The cap here in California is $1,800 a month, even though you could have paid more than $1,800 a month in taxes just to California for your entire career. After 26 weeks, the Federal Gov’t kicks in to pay your benefits. And of course, the Federal government taxes you at a much higher rate than state.
Whether you are rich or poor, you have a right to collect unemployment if you paid into the system and you are looking for a new type of unemployment. There is no discrimination among who can collect.
“Engineer” is a positive term which allows for a positive outcome for the employer and employee. You CAN’T get unemployment benefits if your firm does not sign off on the benefits and corroborate the layoff with the state. Engineering your layoff is about planning, being methodical, and having open dialogue that touches on the human spirit through developed relationships.
The more you know, the more you know you are worth.
Best,
Sam
Are you actively looking for new employment?
Do you collect theft insurance from your car after you sell it?
I’m sorry, but you are abusing the system, and probably breaking the law, whether or not everybody does it.
Further, I believe you are obligated to reduce your benefit by your income, of which at least proceeds from your book should count towards this income.
I encourage you to have more empathy for the unemployed. Millions of people are out there looking for more meaningful work.
If we can have more empathy for others and not judge unless we walk in their shoes, I think the world would be a better place.
http://www.financialsamurai.com/2012/07/06/in-search-for-empathy-for-the-unemployed/
WTF? Really?
FS, I’m glad you addressed this directly, its interesting to hear your rationalization. In CA the program is not referred to as “unemployment benefits” but rather “unemployment insurance.” This is the first sentence on their website: “The Unemployment Insurance Program, commonly referred to as UI, provides workers, who lose their jobs through no fault of their own, with weekly unemployment insurance payments.” Here are the eligability requirements: http://www.edd.ca.gov/Unemployment/Eligibility.htm
As a former financial worker I’m sure you can explain the difference between insurance and a trust fund. Yet you talk about this insurance program as if you’re entitled to get a monthly check for the simple reason that you paid in.
The argument isn’t that you haven’t paid into the program, or that you have too much money to receive benefits, or that people who actually qualify for benefits without lying should feel ashamed of themselves. The argument is that you are being dishonest about your qualifications to receive an insurance payout.
If I give away my car to a friend who needed it, and then claimed the money on my car insurance policy saying “well I paid my premiums and a payout is my right because I no longer have their car,” I’d be committing fraud. Unfortunately for the stereotype of your past profession, it appears you are mistaking a lack of scruples for cleverness.
One of the key rules is that employment precludes you from collecting unemployment. I interviewed a couple dozen who are collecting, who aren’t collecting, wanting to travel and take time off and learned about their scenario.
If you are unemployed but are actually looking, applying to jobs, interviewing and so forth, you can collect.
A lot of my readers are looking for encore careers and doing new things with their lives that have more meaning.
You mention one of 8 rules for collecting: you can’t be employed. Another of the rules is that one must: “Be unemployed through no fault of his/her own.” Thus collecting unemployment is wholly fraudulent if you’ve engineered the end to your employment. The two concepts are simply not compatible within one philosophy, unless another tenant is to break whatever rules you want in order to get ahead.
You write to Elias that empathy would make the world a better place. But unfortunately empathy loses it’s effect in a sea of people defrauding (read: lying regarding their eligibility) programs that are designed to help those in need. And that’s the tie-in that’s making me take this personally: In order to get that extra $3k/month of passive income, you are making the world a worse place. But sure, you might be help other people who don’t have integrity at the expense of the rest of us.
What most people don’t realize is that laying employees off is hard. You can’t just fire or lay people off with no reason, even though you want to. This is how the employee can HELP the manager make some tough decisions for them.
Try to focus on the theme of the post, which is engineering a severance package to the benefit of both employer and employee. Unemployment benefits is not the focus, but a side “benefit” of what an employee has paid into.
The California law is clear: if you are voluntarily severed then you are not eligible for disbursements from the unemployment insurance fund except under a small number of conditions.
You are describing voluntary severance, voluntary severance is not eligible for benefits.
While I can see your point that we shouldn’t be ashamed about taking unemployment because we have paid into it, I couldn’t live with myself if I “engineered my own layoff” just to collect unemployment checks that should be going to someone who really needs them. To me the whole idea of government and taxes is that through collective work, the system should aid some individuals until they don’t need the help any more. As a result, if I don’t NEED the assistance and continue to take it, I’m abusing a resource that would be more efficient if society allocates it toward someone who genuinely needs it.
Also, from the numbers you just provided, the statement “it’s your money” doesn’t seem accurate. If the cap on unemployment is $1,800 a month, and you paid about $1,800 a month in state taxes for your career, it’s only “your money” if all the taxes you paid to the state go toward the unemployment system. Those taxes have to pay for a ton of other services as well, so you will only have paid a fraction of $1,800 a month into the unemployment system. Then you take the full $1,800 a month out in unemployment while continuing to benefit from the other services those taxes provide. That means you are not just taking out “your money,” you’re benefiting from more than you put in. And that seems incredibly dishonest and amoral, from my perspective. As a result, “engineer” sounds less like a “positive term” and more like a salve for your conscience.
I agree. If you cant live with yourself for collecting unemployment during your transition period, definitely don’t collect. Our system is strained.
I’m hoping to be a voice to the many who already collect and feel bad not contributing to society as much that it is OK and to keep having faith.
The book’s focus is on getting a severance package. Unemployment benefits is not the focus at all.
Thanks for your interest!
While your book might not be about getting unemployment benefits, the only concrete advice you offer in this particular post is to never quit or you won’t be eligible for unemployment. I’d be amazed if anyone took away from this post that you are encouraging people who are already receiving unemployment to not feel guilty.
My dissatisfaction about this post arises from the fact the only advice you offered was to take unemployment, and then some vague hints about negotiation without offering any more. The tone of this post was like an infomercial: 1) “I used to be poor, just like you!” 2) “But you too can be independently wealthy!” 3) “If you just follow these simple steps, such as how to game the unemployment system!” 4) “For more, buy my book! I’ll show you the secrets of gaming every other work-related system!”
I don’t know you so I won’t accuse you, but you might like to know that your post and your replies in the comments make you seem like a shyster. You’re not responding to the real questions many people have brought up, just talking past them and calling it optimism. No thanks.
FS-
First off, congrats on all your success in life and the financial world and I wish you the best in your ER.
However, I’m a bit disappointed by this post. You barely scratched the surface of your topic and didn’t really provide any in-depth info for folks to take action on. I suspect your main purpose was to bait a hook and toss it out for sales of your E-Book. Also, I found it very hard to find any in-depth information on who you are? I researched you, your e-book and yakezie and could only find vague tidbits of info? Maybe it was user error? Finally, why so secrective on the price of your book? After looking for 5 minutes, I finally found the price, buried in a forum?
One of the reasons I enjoy this website is because it’s about educating people first and then making money. You seem to be more concerned about making money first. Am I wrong?
I’m going to have agree with a number of other commenters and say that this post is a combination of uninformative and ethically questionable.
Start with the title: “Breaking Free from the Corporate Grind Just Got Easier” — wait, how did it “just get easier”? That title makes me think the author is either going to alert me to some new legal/technological/social development or that he is going to propose some new technique to help those seeking FI. I don’t see either in the article.
I do see the suggestion that workers should learn their legal rights, a proposition with which I can’t disagree. But the author seems to veer dangerously close to encouraging people to game the UI system. I’d rather follow MMM’s advice and get rich with good old fashioned honesty. Yes, yes, I know that workers contribute a portion of their wages into the UI system, but that doesn’t mean everyone is entitled to “engineer” a way of getting UI benefits. No one would claim that a homeowner is entitled to “engineer” the payout of fire insurance benefits by strategically burning down his own home just because he paid the premiums for 20 years. We would call that fraud, and rightly so.
Perhaps I’m reading too much into the author’s comments about unemployment insurance, but for that reason I’d encourage the author to write a more thorough, informative piece, rather than dangling some tidbits and links to an e-book.
Thanks Chris!
One of my goals of working so hard for the past 13 years and saving enough so that my passive income is generating roughly $7,000 a month is so that I am not beholden to money.
Like MMM, I began writing Financial Samurai after I became independly wealthy. Indendently wealthy is different for everybody. My definition is having enough non day job income to passively flow through to lead a independent and comfortable life.
Writing has always been a hobby of mine and I was surprised two to three years later companies actually wanted to pay to advertise. I don’t need any of the online income to survive, but I’ll happily accept to donate to charity, fund the Yakezie Writif Contest for education, or reward myself.
Here’s my about page. I don’t expect anybody to get to know me from just one guest post. It takes months, if not years and I understand human nature’s default predisposition of attacking anything we don’t understand.
http://www.financialsamurai.com/about/
Thanks for the tip on the cost of my book. I’ll make the price in BOLD and add it to one more place of the static page here http://www.financialsamurai.com/how-to-make-money-quitting-your-job/
Any more tips I appreciate it!
I’m a big supporter of Sam’s and stand behind his eBook and his writing. I think those who are being so negative missed the point and aren’t familiar with Sam’s journey and his style of writing. He’s incredibly knowledgable and generous, and the network that he created through Yakezie.com is one of the main reasons I became and continue to be a blogger. He’s also one of the most positive people I know.
Life is too short to be bitter and angry. If you’re unhappy with your career and your current job, DO something about it. I found Sam’s book has a lot of helpful tips and insights to help people break free of the unhappiness in their lives that stems from their current jobs. I learned a lot from the book as well as from his blog.
Thanks Sam!!
UI is paid entirely by the employer, the state and the Feds, not the employee http://wiki.answers.com/Q/Do_employees_pay_for_unemployment_insurance
So your premise that you are entitled to this money Sam is bullshit. And you can dance around it all you want but you are committing fraud. For your next EBook, how about “Gaming the welfare system” or “How to rip-off Social Security for more benefits”? I’m sure you’ll be successful.
When you have no intention of looking for work and used this as an RE boost there is no way around it, you are committing fraud. Shame on you when there are struggling families and businesses out there (due in part to the enormous debt in this country) and you use it to supplement your 7K a month in passive income. I don’t expect any shame from you though, it’s clear from your posts that you are completely lacking in a moral compass. And I guess it’s no surprise Calif. has 3 bankrupt cities (for the moment) when people like you are happy to suck off the gov’t teat when it’s completely unnecessary and predatory.
You’re just like the guy in Michigan who won 2 million in the lottery and continued to collect food stamps “because he could.” Your both leeches. And I’m disappointed Mr. MM hasn’t called you out on this more (high five to Mrs. MM who initially did).
And I’m proud to see so many posters on this board that were willing to call out Sam as a fraud. Alot of people are sheep and shy away from confrontation. Props to those who were willing to call out this despicable hack.
I could be misunderstanding this post, and maybe the point is to be confused and therefore buy the e-book.
My thought is that if Sam no longer wants to work for this company, and it seems he liked his work and this company for many years, why not just man up ad quit? Why does the company owe him thousands of dollars in severance? Does “engineering” mean doing his job poorly? Or pointing our his own redundancy? This seem disrespectful to his employer.
I don’t get it.
Hey Samurai, did you study at Bei Da? Your dorm sounds exactly like the one I stayed in in 2008 (did you also wake up with dirt all over your pillow from the sandstorms? And have to shower before midnight because they turned off the hot water after that? And wash your clothes with a washboard? Ah, memories!).
Though I must say, $200 a week must have gone a pretty long way in Beijing in the late nineties, especially if you were cooking your own food!
Hey Xialongbao,
I studied with the Princeton program at Bei Da for part of that summer. Did you ever go to the bar Solutions at the Xi Men?
I loved drinking Qingdao pi jiu and eating yang rou chur! So fun to ride around in the hu tongs and go to the Gu Gong at night.
Maybe it was only 200 renminbi a month I had. Wu lun ru hu, sue ran wo mei you hen duo qian, wo mei ge yue hen kai shin!
S
your guest poster might want to brush up on unemployment regulations for each of the 50 states. Since each state has different rule for filing and receiving unemployment. Some states almost required you to get fired from your employer to receive any type of unemployment.
This whole experience was worthwhile to me.
#1, FS recommended a very good blog.
#2. The readers of this blog call bullshit when they see it.
Hmm, this post is very odd. Very out of character for FS. I’m struggling to believe he wrote it (& especially the comments) actually.
Long time reader, first time poster here. Love the site. I first found out about MMM from Jacob over at ERE.
For those familiar with Jacob’s site, you’ll know one of his reasons for not writing anymore is the flack he got from readers. I hope MMM doesn’t go the same route! The content is pretty darn good for the price I pay.
That being said, I don’t think MMM would ever advocate trying to collect UI when one isn’t eligible. So I’ll trust MMM’s judgement on this Guest Post from FS and assume it’s legit.
Cheers
Thanks Phos4ic.. I enjoy the criticism. If it has a solid basis, I get to learn something. If it’s based on misunderstanding, I get to practice explaining myself better. There’s not enough time in the day to address it all, but the stuff I do get to handle is already pretty useful.
I really enjoy the criticism too so keep up the good work!
A couple points:
-I don’t recall anyone taking MMM to task for posting credit card offers on the site. These websites and post-forums aren’t entirely free, you know. If a purchase of a credit card or a book can be a win – win, what’s the harm?
-I think the focus of FS’s book, presumably, is the severance package, not unemployment payments.
Hi Brian,
The severance package is indeed the focus of the book. I’m not sure why so many people are focusing on unemployment, which is the standard benefit if one is unemployed.
The severance package accounts for 90-99% of the entire compensation if you are successful in engineering your layoff.
The severance package is what is negotiable. The WARN Act and UB is standard.
S
In giving advice to my kids I would highly recommend the path MMM took toward FI. I would not recommend FS’s path. Doesn’t mean I mind seeing it here, maybe it will help highlight the value we regularly see. I guess I wouldn’t mind seeing more of an opinion from MMM regarding the path taken by a guest poster, especially someone who had taken such a dramatic diversion from your own. Doesn’t mean it needs to be in the same post, maybe just point out that you will return to the issue with your thoughts on his methods at a later date. But mostly I just moved on, no big deal.
I have been subscribed to both blogs and FS is just not worth my time anymore. I just unsubscribed after reading this. I should have unsubscribed about reading other articles similar to this one or the one about how traditional IRAs are better than Roth’s. Thanks MMM for the perspective and I am no less a fan of you than I was before reading this, but FS is just not a worthy read.
If you visit Sam’s website, you’ll see he definitely advocates collecting UI after asking to be laid off. He also recommends people wanting to be laid off should :
1) Become annoying by making noises people hate, but stay nice
2) Come in 15 minutes late
3) Fade to mediocrity
To me, it’s a pretty disgusting way to leave a job, but hey everybody has their own morals.
What’s next Sam? Should be all go to the local food bank for our groceries?
I’m pretty surprised about the amount of negativity on this site in general. It seems like it’s either this way of living super frugally, shunning consumerism, etc and no other way at all.
Let me give you some perspective on someone who has actually bought and read the book. I’ve been working for 5 years and want to do something else. Sam’s book has helped me set up a framework in which to strategically get laid off and help my manager’s when they have to make a tough decision.
I respect my manager, and she respects me. The book has very little, if anything to do with collecting unemployment benefits. It’s about empowering employees to find their own destiny and know their own worth.
It seems like some commenters here are really angry that they quit, and didn’t realize that they could have got a severance package and unemployment benefits if they got laid off instead. To them, I say too bad. There’s always the next time around.
I don’t know how Sam does it, but he always seems to be able to get the maximum amount of reaction from his posts. Well done!
Linda
Ah yes, “maximum amount of reaction”. Sorry, content is king, people who write specifically to “get a reaction” are to be avoided, not praised.
“amount of negativity on this site”… Welcome to the site! Obviously you haven’t read much here, hopefully you will stick around and read a post or two. :D
“Sam’s book has helped me set up a framework in which to strategically get laid off and help my manager’s when they have to make a tough decision.” Wow, that kind of corporate BS speak is wonderfully rich but absolutely devoid of any meaningful information. I see FS has trained you well.
Since his system worked for you, why don’t you specify exactly what you did at your job to get strategically laid off?
Linda, I’ve talked with most of the employees that have left my place of employment. They are a real boon of information. It’s been especially beneficial to talk to some after a year has gone by.
I learned things I didn’t know. Like: Even if they are handing out packages, you can’t hand in a notice. If you do, no package for you. Recently, you can’t even say, “I’d like a package please.” Otherwise, they will think that they can wait you out and again, no package for you. If you have cancer, again, they will try to wait you out.
There is so much involved, it’s unbelievable due to all the laws and regulations.
Speaking to those who have been laid off is key. The issue is, many times we aren’t legally allowed to speak about the exact contents of our separation package. But, we can provide a framwork.
Managers who lay people off because they ask for it aren’t really doing their jobs as managers. Your job as a manager during layoffs is to preserve the greatest amount of talent on the team possible for a given budget.
From way too much personal experience letting people go, I can say that I have never had the bottom performer on a team ask to be included in a lay-off.
Hi Linda,
Glad you were able to put the framework of the book to good use! Congrats for engineering your layoff!
I feel bad for negative commenters and try and help them out. But after a while, their negativity becomes a drain. There’s always something else wrong with them that flows through, be it bad finances, underperformance, loneliness or whatever.
One guy finally admitted that he was just so pissed at me b/c he was balding and just broke up with his girlfriend of two years!
Good luck in your future!
S
I think I’ll wait for someone to torrent the ebook and save myself $38.
MMM likes to do the occasional book review, I suggest he read this ebook and post a review.
I just handed in my 2 weeks notice and I wasn’t able to get a severance pay. I tried, but I didn’t have enough info to pull it off. Financial Samurai’s book would have helped a lot if I had it about 6 months ago.
My I Quit post is up on my site so come by and take a look. ;)
http://retireby40.org/2012/07/my-two-weeks-notice/
I’ll agree with some of the commenters here: not sure what value is added by this post.
I think Sam does good work, is smart, and knows his finance. However, this post is basically nothing more than an infomercial. MMM content is inspiring and very often gives us the “how”. The “how” is purposefully left out of this post, and when I finished reading it, I was left with this empty feeling, one I’ve never gotten from this blog before.
I know Sam can share more meaty content…why post something that’s so hollow and doesn’t give us the tools to succeed?
I don’t see the controversy. MMM let a blogger and self-published author make a guest post. This happens on most blogs.
As a reader of this blog, I got to see a different view point and some different ideas. Hell, MMM has posted a couple of guest spots himself – at least one of which was on very unfamiliar territory. From my recollection the user comments were much more respectful than we have been.
Much less this controversy of the recommendation not to quit or be fired if you can be laid off instead. From my point of view, I would get a six month severance package including insurance. That’s 50K worth of benefits I’d be turning down – for no good reason.
That’s big bucks my friends, I don’t care who you are.
And then there’s this controversy over unemployment benefits. Well, I’ve got news for you, both MMM and FS are still working. They are working on their own terms, but they are working. If they wanted to take some classes on social media or writing and then were trying to find employment working for a corporation somewhere…there’d be zero F’ing controversy. However, if they choose to do it on their own terms, somehow they’ve crossed a line.
Well, I for one, don’t see this as being a black and white issue. It is very much more gray than most of the posts here seem to believe. At least for me it is.
Good luck to you FS, and thanks for the post!
Thanks Mr. Thrifty!
Today, I’m going to work on my backhand. We won the City Championships this past weekend, and I really need to come over the ball instead of slicing all the time! :)
Sam
Congratulations! I love to play, but I’ll never be a champion due to bad depth perception because of a lazy eye. It’s still great fun and keeps the heart pumping.
I’m always mentally telling myself one of three things when I’m playing.
1. Go over the ball
2. Don’t be afraid – make your stroke, it’ll be a winner
3. Move your danged feet
Thanks for this outside perspective! After some thought, I’m not a fan.
It’s not clear to me that FS is advocating actually taking advantage of state unemployment benefits designed for job-seekers who’ve been let go by no fault of their own. I sincerely hope not and want to give him the benefit of the doubt.
At the same time, there are only a few clever ways to engineer a layoff, and I submit that none of them are worthy of a mustache-wearer.
Here are a couple:
1. Convince your superiors to add redundant functions to your duties while relieving you of critical duties. When you’ve achieved a critical level of uselessness, you’ll be let go naturally. This requires taking advantage of superiors’ inferior intelligence for personal gain, a con of sorts.
2. Build up friendship or favor-based relationships with key players in your management chain and human resources while at the same time plotting out marginal drops in one’s own performance over a scheduled time-frame. When you drop below a critical level of performance, your new friends will know you need to be fired, but they like you or they owe you. They want to do right by their likable colleague, so they’ll likely lay you off. Here we take advantage of people’s charity and goodwill.
3. Combine both 1 and 2 for faster, more camouflaged results.
There are also obvious ham-fisted methods that are clearly beyond any moral grey area: threats, blackmail, etc.
Does engineering a layoff make financial sense? You bet your bottom it does. Does it make moral sense? I don’t think so, and I’m not going to pay $38 to find out whether or not my man-gut is wrong. I’ve got friends who can honestly gauge my rational oversights for free during a pleasant evening involving tasty adult beverages and a fancy outdoor fire.
I do agree that FS’ buddy missed a giant opportunity to persevere a few more weeks and make bank. But really, I enjoy the company of a man who makes mistakes based on what he honestly knows about his own happiness. After shelling out for all that beer, it seems FS does too.
MMM — I’m interested in writing a guest post for your blog.
The title will be Breaking Free From the Relationship Grind Just Got Easier. The gist of the article will be me hocking my new ebook How to Engineer a Divorce. I don’t want to give away all the secrets for free (the book is $38) but the tactic involves treating your wife like shit until she leaves you.
This post is a turnoff because I find the UI Insurance bit to be highly ethically questionable. FS keeps responding that we should have sympathy for the unemployed, and I do. However, UI is for folks looking for a job, not early retirees who are pretending to look. As I recall from a time I was laid off and it was not engineered, you have to certify that you made 3 jobs contacts a week to remain eligible.
Gaming the system at the expense of folks worse off than you is not cool.
Hi Brad – The book is about the severance package, and not about unemployment benefits, which is eligible to all who’ve paid into the system.
thx
I really enjoyed this article. Definitely a different style then MMM, but nonetheless informative. People need to get their panties out of a bunch. There is definitely an interesting ethical component to this article. I recently went from a full-time status at one of my jobs to a “per diem” status (make my own schedule, get paid more hourly and no benefits. Most people who do this usually use their extended sick time up before they make the change so they don’t lose out on all those hours, but in order to do so must go on a leave of absence. If I did that I wouldn’t have been able to sleep at night….people are just different. What works for Financial Samurai might not work for everyone, and that’s ok. Kudos for the outside the box thinking.
Thanks Nurse Frugal! Your nice compliment and taking a balanced approach.
Getting some kudos from you is equal to like 1,000 negative comments :)
No one’s panties are in a bunch, we are simply pointing out unethical behavior. His next book will probably be titled “How to file a disability claim when you’re in tip top shape, thus reaping early retirement”.
But I’m glad to hear that your ethics wouldn’t allow you to take a “fake” leave of absence. Kudos to you Nurse Frugal!
I’m a big fan of Sam and love his blog! I also enjoyed this post and learning more about his background.
It’s interesting to observe so much anger from so many commenters. Look, we all know that creating passive income is hard work, and not everybody can make a sustainable amount of money to live. But instead of lashing out at Sam, why not just take a look at yourself in the mirror and work harder on your own stuff?
It’s so easy to blame others for our own short coming. Until we can own up, we’re always going to be miserable.
I for one am taking Sam’s advice and never quitting my job if I got laid off. Corporations look out for themselves first, and I’ve certainly been short changed many times before!
Thanks for the post!
Jerman – Ah, a straightforward person who has experienced the ups and downs of corporate life!
The good thing about the commenters here is how much they love their jobs. It makes me happy people have been treated well.
I had a pretty good career, but there were definitely times I was thinking “WTH” with all the politics and socialism.
Good luck with your eventually departure!
Amazing story. It isn’t easy walking away from a job, but for those able to strike out on their own the rewards can be well worth it. What’s classed as cheating the system by one person is using what’s legitimately available by someone else.
I have bought and read the book. Very entertaining, good framework, and useful advice. I’ve been wanting to quit my job for a couple years and just travel.
I had my initial discussion with my manager last week, and she’s on board to helping me get laid off! Thanks Sam!
Good luck in your journey too!
Sam, not sure if you’re monitoring this comments anymore, but I wouldn’t take any negative comments too seriously, it’s life with the Internet, please love to shit on others who are successful
Secondly I can guarantee all those bitching about it being unethical to collect UI would be the first in line to take money from the goverment.
Also I can’t figure out why everyone is so hung up on UI, it,s your choice, no one is going to force you take take free money, don’t want it don’t take it.
Rob