I have a bug-out bag at home for Mrs WB40 and I.
It is a glorified ruck sack which contains all the necessities (e.g. food, water, clothing, tools) to last us 72 hours in the event we need to evacuate from our home quickly. It’s a useful piece of back up kit and may one day save a life (although hopefully I won’t ever have to use it) when STHF (shit hits the fan), as the prepper community so adoringly calls it.
Equally I have a bug-out plan for my career in case it goes wrong (i.e. I lost my job) and it all started a few years ago on a rainy and cold Wednesday morning
My encounter with George
I was on my usual 7am commuter train into London the other day when I noticed a fellow passenger Googling “should I quit my job” (there weren’t many seats remaining and he had very big font size on his phone). Out of curiosity, I struck up a conversation with him and learnt some fascinating insight into his life.
- His name was George.
- He’s 35 years old, married with a 3-year old boy.
- He has a university degree and works in the financial sector in London. Based on his job description and a quick peek on Glassdoor, he probably earns between £75,000 to £100,000 per year (£4,200 to £5,500 take home pay per month).
- He really doesn’t enjoy his job because it’s not engaging and super stressful. Apparently his boss is a nutter.
- He hates the fact that he had to spend 30 minutes on the train and another 40 minutes on the underground every morning and evening.
So I asked him my favourite question: why don’t you just quit?
Surprisingly he didn’t answer the typical “my job is my only income” but he said “I wouldn’t know what to do with all the free time”.
This was a left field answer I didn’t not expect!
This actually got me thinking about what I would do if I quit my job tomorrow. I think here’s what’s gonna happen.
1. I’m probably not gonna call it quits
I love my job, that’s a fact. I work in a small e-commerce sector and I’m on a mission to revolutionise men’s bathroom worldwide. The work is vital, exciting, fast faced, autonomous, flexible (I pretty much do what I want, when I want), the environment is gorgeous (we are in a 2000 sq ft office in central London paying an amazingly low rent) and we have much talent in the team.
The slight downside is that my salary and benefits could have been higher, but then I would say that about every job because an employee is a factor of production and by definition it needs to be paid at below its fair value in order for a business to run profitably.
On top of that, I have a handsome share options whose reward is contingent upon me staying in the long term.
So I have plenty of incentives to stay at a job that I adore whose remuneration is also decent.
2. Activating my income protection insurance
In life shit happens.
As a fast face start up changing on a daily basis, my skill portfolio that is vital for the business today may become irrelevant and even a hindrance down the line. If I cannot change myself alongside with the business then it would be time for me to leave.
This is why I have a comprehensive income protection insurance in place to insure against unemployment, accidents and sickness.
This means if I get exited from the business, I will be paid a monthly allowance (equivalent to about 60% of the net pay) for 12 months or until I land my next gig. This would enable me to continue paying for my mortgages and other living expenses without seeing an degradation in lifestyle.
Given how precarious modern day employment has become (1 in 3 of us are 1 month/paycheck away from being homeless), I’m super surprised only 11% of the workforce has that insurance in place. For me, I’m paying roughly £500 annual premium to insure against £24,000-worth of income risk. A pretty good deal.
If you don’t have it and you have a stable job, then please consider getting one. I got mine through CompareTheMarket, which is a great insurance price comparison site.
3. Stop my emergency saving program
I save a lot of my income, 67% last month to be exact.
I have 4 main saving pots, divided pretty much equally (around £900 each):
- Personal emergency savings, instant access
- Family emergency savings, instant access
- Mortgage (ex interest)
- Pension and investment accounts
Once I lose my salary and the income protection insurance kicks in, I will be £1,000 short on a net basis per month.
This means I just need to stop one of the channels and my lifestyle can remain the same as before.
I will elect the Personal Emergency Savings because:
- Mortgage is unavoidable, plus it builds up equity and increases my net worth (my equity increases by £0.85 for every £1 repayment I make currently).
- Pension and investment savings have long term compounding benefits, plus I get 25-40% of tax rebate on top of that, which is free money.
- I want to continue contributing to the well-being of my family.
- My personal emergency fund is looking pretty good currently and can last me at least 4 months.
4. Go travelling
The way I see it, with the income protection insurance being paid out, I’m essentially sacrificing £1,000 per month for the privilege of getting 9 hours of my life back every work day for 12 months (the maximum payout duration of the insurance).
The sacrifice works out to be £5.56 per hour (9x5x4), which is an insanely good deal.
On top of my list I’m going to take Mrs WB40 and (in the future) WB40 Junior to visit all the tropical paradises and archaeological wonders that I have yet to do:
- Bali, Indonesia
- Machu Picchu, Peru
- Santa Cruz, Bolivia
- Amazon forest, Brazil
This will be a trip of our lifetime and it will be the most eye opening gift for WB40 Junior to appreciate our wonderful planet for the first time.
Thankfully it can all be funded from our passive income source so hopefully we won’t have to touch our savings.
5. Accelerate my novel publication
With an additional 45 hours per week, time will no longer be as precious a commodity as it is currently and I can really focus on the publication of my first novel.
I have always enjoyed creative writing (even though I was trained as a scientist) and I wrote my first novel when I was 9 (in Chinese).
3 years ago when I was waiting for my connecting flight back to London in Amsterdam (after a 3-week globe trotting business trip), an idea suddenly sparked in my mind where I would write and epic action thriller. I then spent hours night after night typing on any electronic device that I could reach whenever I had a free moment and the first draft was completed this month.
You can read about my experience here but safe to say that it was a truly eye-opening experience.
With the additional time, it will massively help my editing pace and get it in front of my readers sooner.
Interested? Here’s the trailer. It will be out by the end of August (sooner if I do unfortunately lost my job).
6. Focus on WealthyBy40.com
So far this blog has primarily been a creative outlet documenting my journey towards financial freedom and reaching my own WealthyBy40 Challenge. I absolutely love publishing and interacting with my (albeit) limited readership.
With the additional 45 hours per week, I’m going to devote at least half of that writing more useful content, improving the UX, networking with my fellow FIRE community and engaging with my readers so that it really becomes the “go-to” blog for the millions of “just about managing” households aspiring to escape the rat race and attain a life of freedom and fulfilment.
So this is my career bug-out plan. I am a truly lucky man because:
- I love my current job.
- I am sufficiently financially literate to plan the financial aspects of my career bug-out plan if things go south.
- I have so many wonderful alternatives lined up outside of my main job.
What are you waiting for? Career bug out plans are awesome and everyone should have one.
What is yours? Would love to hear that. Please comment away.