What would you do?

[socca]

I was recently laid off from my $110k/year job. I have the option of accepting another job at similar pay in an industry I detest (same industry I was in before...) in an area of the country in which I have no interest in living. Alternatively, I can go the entrepreneurial route and try to live off my investment income while building a business. I've had a regular paycheck every two weeks for the past 18 years, and I'm having trouble with the concept of living without a paycheck. My investment income is a total of $40k / yr, $30k / yr from non-retirement accounts. I'm 43, so I'm a long way from having supplemental income from Social Security, modest pensions, etc.  I can live quite well at around $22k / yr (no wife, children, or pets). I've come up with 26 reasons why the entrepreneurial route is a bad idea, and 20 reasons why it's a good idea. Damn - this is hard, hard, hard....

 

[Cut-Throat]

With no wife, kids or pets and at age 43, I'd move and continue socking money away. With 40K a year in investment income, you've got to be pretty close to Financial Independence. Why risk it, by starting a risky venture.

And there is another choice you have also. Find another job in your current area, if moving is not your bag.

 

[JPatrick]

You sound like you have little or no passion for this business idea and believe me you need a truckload.
Maybe I'm wrong, but I'd say cut throat has the right idea.

 

[socca]

I forgot to mention that each of my parents (who are divorced) are multimillionaires - my Mom through a strategic second marriage (my rich stepfather died not long after he married my mother and left most of his assets to her rather than my stepbrothers - a rare occurrence) and my Dad through inheritance. I have always lived and saved as if I'm not going to receive a penny in inheritance. I'd rather make my own bed than have the bed made for me. Does this enter into the equation?  Well, perhaps the downside risk is a bit less.

I actually love the business (engineering); I just dislike the customer. I am not worried about the drive, enthusiasm, discipline, good judgement, etc...that it takes to succeed as an entrepreneur. I'm just having some trouble with the sharp change in mental framework by which I've lived these past 18 years. The company I worked for sprang these layoffs on everyone with no advanced warning. I was amazed - it was as if the HR people took a sinister delight in the agony they inflicted on the victims. Dilbert is right  8)

 

[JPatrick]

I won't quibble, but you may need to like your customers at some point in time.
As far as factoring inheiritances, you are probably doing a smart thing in planning as if there was none.  Yet at some point, especially if it is substancial, you need to plan for it. 
I did the same thing regarding inheiritances.  I saved like there would be none even though as an only kid  the odds were in my favor.  I always assumed and hoped my parents would live it up and die broke.  When it became apparent  that was not likely to happen I factored it into my planning. By doing so I did a few things different, but had the inheiritance gone away I would have been fine with only minor tweaking to the life plan.

 

[TromboneAl]

Why not take a year off and think about things? You're savings have given you the luxury of being able to do that.

 

[TargaDave]

Socca,

What sort of engineering field are you in? I did the start from scratch routine on my current widget building business but it's pretty capital intensive and required VC money. Pretty painful and Cut Throat makes a good point

Here is another option to consider. Since you have some decent savings, you might think about buying an existing business instead of starting from scratch (always something to be said for buying into existing cash flow). Of course this route isn't for everyone either. Here is a link on the subject:

http://entrepreneurs.about.com/od/buyingabusiness/

Another option is going to work for a small startup instead of a megacorp (assuming you are not at a megacorp now). At least it will have a different flavor

I also agree with Al. Take some time to goof off even if just for a couple of months, and research the options. I would think twice before taking a pure "repeat" job. Just read some of the posts from the trapped megacorp prisoners on this site and you will know why.

 

[retire@40]

I was recently laid off from my $110k/year job. I have the option of accepting another job at similar pay in an industry I detest (same industry I was in before...) in an area of the country in which I have no interest in living. Alternatively, I can go the entrepreneurial route and try to live off my investment income while building a business. I've had a regular paycheck every two weeks for the past 18 years, and I'm having trouble with the concept of living without a paycheck. My investment income is a total of $40k / yr, $30k / yr from non-retirement accounts. I'm 43, so I'm a long way from having supplemental income from Social Security, modest pensions, etc.  I can live quite well at around $22k / yr (no wife, children, or pets). I've come up with 26 reasons why the entrepreneurial route is a bad idea, and 20 reasons why it's a good idea. Damn - this is hard, hard, hard....

I think you answered your own questions.

The option of accepting a job that you would detest really isn't an option.

If you are really good at what you do and you are passionate about it, then starting a business in that field will probably be successful IF you can also wear all the other hats that come with owning your own business. Of course get that lawyer/CPA team to help you along the way, especially before and at the start-up phase.

It's also a good thing that you looked at both the pros AND cons of starting your own business. Too many people just look at the good side and are in denial until they start getting slapped around by reality.

I would give it a try, as long as you don't jeopardize your entire savings. Later in life, you don’t want to agonize that you could have or should have started your own business. Even if you fail, at least you tried. You are only responsible for yourself with no wife and no kids, so why not at least give yourself the satisfaction of giving yourself a chance?

 

[brewer12345]

Let me get this straight:

- You can live well on $22k
- Your taxable investments throw off $30k
- You have been given your walking papers and aren't enthused about starting a business or taking another job in your industry

Why, exactly, wouldn't you want to retire or semi-retire? If you can figure out something for health insurance, you have it made. You also have no dependents. Go do the perpetual traveller thing for a while (see www.retireearlylifestyle.com), or maybe buy a used RV and see the country (vagabonders-supreme.net or www.andybaird.com), or go sailing in the Carribean (tendervittles.net).

 

[acg]

I actually love the business (engineering); I just dislike the customer.

This is most likely the reason for the layoffs. Yeah, customers are a pain (like me) but they are the reason for the paycheck. The world today is leaning towards service (and service is an honorable profession!)

If the customer ain't happy, nobody's happy. If a sale doesn't happen, nuthin' happens.

Sounds like you could get by just fine with no paycheck for a while. It is not that hard. Just a period of adjustment...The right thing will come along. I found the last job I had, and if I want another, I'll find that too. Sometimes we just need time to reflect, gather our thoughts, priortize, and move on. Seek and you shall find.

Just a month myself since being FIRE'd and lovin' it!

 

[socca]

The diversity of opinions expressed here reflect exactly what's churning between my ears 

I worked most of my career on the commercial side, then bailed and went to the government/defense side when the communications biz collapsed in 2002. I really don't like the military customer, although I try to have some compassion and realize that those folks are just trying to muddle through like the rest of us. However, I detest waste, and if U.S. taxpayers knew how the industrial-military complex wastes their money, they would be outraged. More personnally, I would prefer if my epitaph would read something more inspiring than "he designed new and creative ways to kill people."

I feel like I've been worshipping at the money altar for the past 18 years; perhaps it's now time to serve the  "greater good." In any case, I certainly don't have to serve those particular gods for much longer...

Thanks for the opinions!

P.S. Yes, I was laid off from a megacorp, and may have the opportunity to rejoin that megacorp in another far less desirable location. 

 

[Cut-Throat]

Can you share the other location with us? - It may not be as bad as you think!

 

[socca]

Trust me - it's bad if you like to what I do. Analogy: imagine someone who is passionate about the ocean relocating to Oklahoma...my situation is similar. Well, life is never perfect, and I hope that I could find things to like about the new location. For example, it's warm most of the year. And, at least it's not Iraq (that will be next  )

 

[Nords]

However, I detest waste, and if U.S. taxpayers knew how the industrial-military complex wastes their money, they would be outraged. More personnally, I would prefer if my epitaph would read something more inspiring than "he designed new and creative ways to kill people."

Maybe the answer is in the way you look at the situation.

For example I drove bezillions of dollars of submarines around for years and never fired an ICBM or a warshot TOMAHAWK or any warshot torpedos. Total waste of money. Or was it?

The military's never had to make a profit. It's difficult to be cost-effective when you're trying to design new & creative ways to kill people & break things, but DARPA has subsidized plenty of wasteful projects from the Internet to the recent robotic vehicle races.

Joshing aside, you're showing signs of burnout (or at least crispy around the edges) that is usually easier to sort out after a couple months' sabbatical to catch up on sleep, to exercise off some of that stress & tension, and to develop a more serene frame of mind in which to make decisions. You might decide on a new path, you might return to an old one, someone might chase you down with a new proposal, or you might decide to make the sabbatical permanent...

 

[socca]

The situation is more complex than you describe. The folks who profit immensely from the war culture have no reason to explore the extent to which they themselves are responsible for the very problems they are trying to solve.

I agree, though, that anyone who questions the wisdom of spending half a trillion dollars a year on the military is not only burned out, but completely insane and should be locked up    These folks are a danger to society.  :

This isn't the proper forum for a political discussion. However, the question of when I can stop being part of the problem and start being part of the solution is relevant. 

 

[Martha]

Is there anything in particular you would like to do to be part of the solution? Maybe it doesnt involve starting your own business, but using your skills in another way that helps you feel good about your work. What kind of skills do you have?

 

[acg]

I really don't like the military customer, although I try to have some compassion and realize that those folks are just trying to muddle through like the rest of us. However, I detest waste, and if U.S. taxpayers knew how the industrial-military complex wastes their money, they would be outraged. More personnally, I would prefer if my epitaph would read something more inspiring than "he designed new and creative ways to kill people."

This is part of the equation that led me to FIRE at 48. Why should one continue to work to pay taxes to such a regime?

Years ago, when starting to invest with a broker friend of the family, he told me the only way you could you loose everything is if the US government went broke! Ha!

Are we going down the tubes fast enuf

 

[socca]

Is there anything in particular you would like to do to be part of the solution? 

I am considering some ideas. They don't appear to be great money-makers, but they would be immensely satisfying. The trade-off is whether making a positive contribution for a little money is better than making a large negative contribution for a lot of money    This is one of the questions I have the privilege to ponder these days... 

 

[wildcat]

Socca -

You're so close to ER why not take the job even if it is in a crappy location?  Spend a couple years there and relocate to an oceanside area.  Doesn't seem all that bad to me and I think it would be different if you had to stay for a prolonged period of time.  Might be good to get out of the area just to see other places.  You may realize you 1) really appreciate what you had and move back with more $$ and/or 2) really appreciate other qualities of your new location you have not experienced before and still move back with more $$.  A guy I know left Cali and moved down South.  He didn't like it as much but it was a new experience for him ---- big yard, green grass, slow pace, low cost of living and he even enjoyed thunderstorms  .  Now he is moving back with no regrets.

 

[SteveR]

I agree with Wildcat.

I have moved several times to different parts of the country. Each move had its own good and bad points but we managed to always enjoy the things the new place had to offer. I learned a lot of new things that I otherwise would not have even attempted before. Golf and NASCAR in North Carolina, SCUBA and sailing in Puerto Rico, skiiing, snowmobiling, X-country and off-road exploring in Utah, and many other things.

Take the good with the bad. Enjoy what is unique about the area. Have fun, save your money and then move to where you really want to be later on. I can tell you my 10 years in IL was my "dues" for living here again. You can do it and will most likely be able to save more $$$ in the temporary area too.

 

[brewer12345]

I am considering some ideas. They don't appear to be great money-makers, but they would be immensely satisfying. The trade-off is whether making a positive contribution for a little money is better than making a large negative contribution for a lot of money    This is one of the questions I have the privilege to ponder these days... 

socca, my wife is primarily a stay-at-home mom these days. However, before she had kiddo #1, she set up a small business doing career counseling. She did so in part to stay active in her chosen field, in part for some continuing adult contact, but mostly (I think) because she enjoys helping people. She makes a little money at the business ($5k a year pre-tax, maybe), all of which gets chucked into a solo 401k, but its not the point.

I'm sure you could find something like that that is relevant to you.

 

[astromeria]

So far it sounds like you don't care for the alternatives: working at a job you detest, retiring, starting a business. What about the other alternative: working at a job you like! Why not take some months to figure out what that might be? Since, according to your needs, you're already financially independent, take your time and get creative...part time? seasonal? something off-the-wall, low-paid, but gets your juices flowing? Perhpas apply your skills in a nonprofit organization.

My husband went from long hours in Silicon Valley software engineering (misery) to teaching computer science at a Southern college (delight!). And he gets 4 months off per year.

 

[socca]

So far it sounds like you don't care for the alternatives: working at a job you detest, retiring, starting a business. What about the other alternative: working at a job you like! Why not take some months to figure out what that might be? Since, according to your needs, you're already financially independent, take your time and get creative...part time? seasonal? something off-the-wall, low-paid, but gets your juices flowing? Perhpas apply your skills in a nonprofit organization.

My first love is actually software engineering, although many modern companies think that SE is too lowly an activity for senior engineers, so they turn them into systems engineers. Systems engineering is not anywhere near as interesting (to me). I've been nurturing a hobby project in artificial intelligence for quite some time that could eventually be a huge commercial success or a stunning failure - depends where the research goes. I also enjoy wireless air interface protocol engineering, and I've done some management. I have a couple of books in mind that I'd like to write and self-publish. Book writing and self-publishing alone could keep me happily occupied for all of 2006.

If I do go the entrepreneurial route, I'm not worried about keeping busy. I've been studying the entrepreneurial world for many years, but have never had the guts to take the plunge. Maybe it's time for baby bird to leave the nest 

P.S. Today is one of my "go for it!!" days. Tomorrow might be a "don't be crazy - head back to grindstone" day. 

 

[Martha]

P.S. Today is one of my "go for it!!" days. Tomorrow might be a "don't be crazy - head back to grindstone" day.

I go back and forth the same way. It looks like you have plenty of skills. Given your savings and your skills, I wouldn't take the transfer you don't want anyway.

 

[rmark]

Hey wait - I'm in Oklahoma. I have to admit that Texas does screw up easy access to the beach from here.