For anyone who evolved from a salaried employee to an entrepreneur or business owner, the consideration for the loss of the total cost of employment needs to be evaluated and considered at some point in time.
As an employee worker myself, we are often over-represented by the amount of gross salary we earned, without factoring other remuneration or benefits which could be equally as important to making decisions. Other benefits that we should be factoring in our consideration should also include our performance variable bonus, annual wage supplement, medical, paid leave, allowances, social security employer’s contribution and others. These are the monetary factors which can easily be converted and factored into the total cost of employment.
Then there are the non-monetary benefits which should also be considered – interaction with colleagues, social activities and corporate fighting mentality. Once we leave the corporate world, we leave all of these things behind us and start afresh to a new challenge.
For someone who wishes to leave the corporate world one day, I know things can get very difficult when I had to make the decisions one day. The idea of leaving the benefits the corporate world can get – both monetary and non-monetary, which I have enjoyed over the past decade will all be gone to start a new life afresh.
Kyith, the author of Investmentmoats, proposes in his recent article to try and test out our goals before we decide to make the leaps.
What this means is assuming you are ready to step out of the corporate rat race, do test whether your finances can hold without the need to depend on your monthly salary and whether your character can withstand the time without companion of your colleagues.
Further, also do a test on what you envision life is like after you leave the corporate world. For example, if you decide to spend your time on becoming a house husband – cleaning the house and cooking for the family – do try if it is something you can sustain and enjoy for long periods of time. If you decide to live in another country for an extended stay, do also try out if that is something feasible and worth the while in the long run.
Speaking to some early retirees from the corporate world, I usually get mixed reviews but a common theme. While some are enjoying their flexible time doing anything they could, some feels like there can be instances where you suddenly have too much time and if you are not discipline about it, it could soon turn out to become a lazy attitude.
I guess with potentially another 4 more years of corporate working on my side, it’s prudent to test every scenario out from now on.
For those who has successfully “retired”, how has the transition been?