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Dealing with financial dilemmas of quitting my day job

This is the second part of a series of posts I’m writing about why I quit my software engineering job at Microsoft to make a game. I mostly talk about the revelations that I had during a time period of introspection before I could make that decision.

coins

When someone talks about quitting their job, one of the first things that comes to mind is money. There is no shortage of practical money advice in the world, so I’m going spare you mine. It can be a very subjective and situational topic too. Same advice may sound funny and petty to someone with a lot more financial freedom, or sound like rich-people-problems to those who have a lot less. Instead, I’m going to share what I’ve learned about how to think about money when making a decision within my own risk profile. That means it applies to decisions that even in their worst case wouldn’t put my survival at risk, but maybe set back my long-term financial goals significantly. I’m actually financially risk-averse and do my due diligence to calculate financial risk. Doing this helps me make a more informed decision and stay calm when taking risks. I recommend everyone to learn how to get on top of your finances and learn to sometimes put some numbers on feelings. However, there is always uncertainty and there is always a psychological component to it. With big decisions like putting a couple of your prime productive years into a risky project, you will need more than just numbers to guide your decision. In my case, my wife and I have been saving for years and thanks to the savings and her income we won’t be in financial strain. Nevertheless, it’s a big mental barrier to quit a promising career path you’ve worked for. I’m going to focus on how I dealt with that barrier.

The Golden Handcuffs

I have made a few difficult decisions in my life, but money was usually a secondary factor in making them, or I knew that more or less I’m moving towards more income. I had to think little about how much money I’m leaving on the table. I had less responsibility, less money to lose, and more important things to worry about. In the case of quitting my job however, things were different. I was leaving a lot of money on the table. It’s especially difficult when I see a lot of people are working hard to find a similar job. It made me feel a bit spoiled and maybe delusional, because the society was telling me I’m in a desirable position. There is a term for it: golden handcuffs. In a free labor market, employers are constantly figuring out how to compensate you just enough to make it a significant financial risk for you to take alternative routes. It’s not necessarily a bad thing. Many flourish in their corporate position and lead a meaningful and successful career and make a lot of money along the way too. Many find a stable positon and mold their skillset to the needs of their employer and enjoy the comfort of their salary to find meaning outside work. So, maybe calling it “handcuffs” is a bit too cynical, but for a lot of people it feels like one. Their job is just something they have to do to keep the lights on. Why is it hard to break free of the handcuffs then? That was when, like a drug dealer on the run, I had to ask myself why I got into this business in the first place. (Sorry if you’re a determined drug dealer with a never-second-guess-yourself attitude and a no-regrets neck tattoo. My references are from the movies.)

how did i get here

…and now we’re back to: How did I get here?

Am I staying for the same reasons I started?

I, like most people, got my first job when I was young, dumb and broke. I also needed an employer for my immigration status. I had to find a job to eventually become a lawful less-young less-dumb less-broke citizen. The only choice I had was to try to find to land a better job so my dumbness and broke-ness deteriorate faster relative to my young-ness (sorry). Then I found a “good” job and I gained experience and money the first couple of years and boy! Does it feel good to have money! For a while, I had fun buying stuff, traveling and enjoying our new level of financial freedom with my wife. We are not big spenders. We’re both from barely-middle-class families in Iran and had to learn fiscal responsibility before the alphabet. We may get tempted to travel to a cool destination, but we don’t break the bank on luxury. So to manage our “disposable” (what a great word by the way) income, I got into investing too. Gotta save for the future! Warren Buffet, Ray Dalio, Jack Bogle, even freaking Mark Cuban, the list goes on, I consumed all the investing advice I could and got our money management in order. You can earn money and invest and watch your accounts grow forever, so it’s worth pausing and asking what you’re doing it for.

This was when I realized I already had the things I’d started my job for. I was definitely not staying in it for the same reasons I’d started it. I like software engineering and building things and I enjoyed a good portion of my job. The early years were more exciting because I was learning more, but gradually as I became more experienced and productive, it’d become more of a routine with fewer chances to learn new things. Most corporate jobs are best performed by highly specialized personnel that can do one thing effectively and efficiently, but that doesn’t seem to work for me (and apparently some personality types). This is a really interesting topic that I can’t fit here, so I’ll cover it in a future post. Long story short, I think I was staying in my job because of the money and a perfect assortment of corporate carrots in the shape of unvested stock awards and raises and bonuses that would make sure I’m financially secure for the foreseeable future. When it comes to financial security and life goals, there is an infinite amount of goals you can set for yourself; houses, cars, travel, boats, kids (all the way to college and beyond), etc. All financial advice comes down to two questions: your lifestyle and your retirement age. Any financial advisor would ask you those questions first. At first I found them to be really hard questions, but then I realized they’re just the wrong questions to begin with.

foggy road

When you can’t see through the fog

To find out what lifestyle you’d like to build and what age you want to retire, you need to think very long term. The longer term you think the more uncertainty comes into the equation and things get fuzzy. Imagine a foggy landscape where things gradually fade out of vision. This is the landscape of opportunities. Bigger companies can see further into the fog and can absorb more risk beyond what they see too, so they race to capture new grounds, build paved roads to them, and put tollbooths on them. To get to anything desirable inside your vision, you have to take one of those roads. If you make calculations based on what you see, a stable middle-class job beats any other ventures every time. Venture-worthy achievement are usually beyond the fog and you can’t see them. Free market economies are incredibly efficient in making sure that is the case. If you want to optimize for a luxury lifestyle or an early retirement, the logical decision is to maximize financial security in the foreseeable future and employers make sure they put the best offer on the table to cover that. That’s how you end up getting paid to build those roads for a bigger company. By setting your goal to maximum financial security, you’re assuming the worst case for what’s beyond the fog, and that makes you too risk-averse. It’s okay to stay on the road until we get stronger, or get back on the roads if our ventures go awry, but not to venture at all is also a big risk; a risk of missing out on life. We usually miss the fact that our vision goes further too as we move forward. What we don’t see right now will be visible soon and hopefully we’ll get a chance to course-correct. Better yet, our foresight gets stronger with experience and wisdom, and by focusing on our own personal growth we can see further and adapt to changes better. If we focus on the best path that we can see at the moment, we will miss opportunities that would have prepared us better for what’s beyond the fog. So, when and how should we venture off? What is the right question to ask? What is the right goal to set? How should we deal with the anxiety of freedom and the fear of uncertainty? How do we choose from all the other paths? That’s a topic for another post, because this post is already way longer than the attention span of the average reader. If you got to here, thank you! It makes me happy when people read the whole thing, so let me know that you have and what you think.

P.S. Writing this, I resisted the urge to talk about the broader social and economic issues that play into this topic; things like current state of the economic consolidation, the increasing infeasibility of working outside the umbrella of corporations, finding work meaningful in a highly specialized economy, etc. There is a lot of literature about them and I really like to explore them, but they are outside the scope of this series and these posts are already long. So, maybe later.

Next Part: The anxiety of freedom: why you keep working for money