Leaving the 9-5: the nuts & bolts

A while back, I wrote about my experience leaving my engineering career -- specifically, why I would do such a seemingly-silly thing! Right around then, I also got interviewed for a podcast, which inevitably came around to the very same topic. In light of some of the conversations I've had in the wake of that, I figured I'd do one more bit of writing on this front, this time on exactly how I went about the transition. Love your current career, but interested in a new adventure? Read on!

Rule #1: take it slow

First and foremost, I did not wake up one morning, decide to change careers, and then march in and give my boss my two weeks' notice. My transition was very, very gradual -- almost painfully so. I started gaining an interest in financial planning in 2008, shortly after my second child was born (not a coincidence!). I started helping people -- giving talks at church, informal coaching, that sort of thing -- in 2010. I started this blog (in its first incarnation) in 2011. I technically founded my firm in 2012, though it didn't look anything like Seaborn back then. I gave my boss my 12-month(!) notice in 2016, and went full-time in 2017. And all the while, I was still working full-time at my engineering job!

Why do it that way? Well, first and foremost, there's a huuuuge difference between being interested in finance and founding a financial planning and investment management firm! (I had actually learned a similar lesson many years prior, when I started taking video game development courses and discovered that being a game dev was 100% Not For Me -- thankfully before making any more serious moves in that direction! Ah, the folly of youth...)

So by taking small, iterative steps, I was able to confirm that this was a path I wanted to go down, before I was fully committed. At first, my thought was to have this be a "retirement side gig", but the more work I did, the more fulfilling I found it, and the more I thought, "why wait?" I distinctly remember the first time I got to look at someone else's tax return; it was simply fascinating to analyze that window into their lives! Fascinating to me, anyway.

(Side note: those of you with a pattern-matching mindset may start noticing some similarities between this approach to changing careers and Seaborn's Adaptive Financial Planning framework. I had an intentional goal, which gave me direction; I built flexibility into the plan, so that I could adapt as life threw me curveballs; and I had a long time horizon, which allowed me to make small course corrections over time, rather than large ones all at once. This similarity is not, in fact, a coincidence.)

Manage your cash flow

I've written before about how cash flow management is the foundation of financial success. While this is true in a general sense, it is an order of magnitude more so when you're looking to change careers! (Now, this assumes that you don't immediately start making more in your new employment than you were before; if you are one of those fortunate ones, you can probably ignore this section.)

If you're an engineer like I was, there's a decent chance that you just kind of naturally spend less than you make. Many engineers earn good money, are not particularly interested in keeping up with the Joneses, and feel near-physical pain when you pay for something; the natural result of all of this is money accumulating nicely in your bank accounts! The flip side, though, is that you've likely not had to focus much on managing your cash flow.

And for most of us, changing careers means taking a serious income hit, at least for a while. So...do you know where you money goes? What do you need to live on? (Common phrase in my household: "'need' is such a strong word".) Are your nondiscretionary expenses as low as possible (e.g. your debt payments low to none)? Can you control your spending if necessary? Do you know how -- and when -- to live off of your savings? If you have a partner, do you know how to handle your finances jointly?

I was particularly fortunate in that learning about personal finance -- starting with cash flow management -- was what led me down this path in the first place! And I've said it before, and I'll say it again: I absolutely would not be where I am now if I hadn't learn to manage my finances, to be intentional about day-to-day spending and month-to-month expenses.

Assume a conservative ramp-up

Confession: this part is going to be "do as I say, not as I do". When I started my business, I assumed it would take me, oh, maybe 12 months to ramp up to a sustainable practice from essentially zero. I've since learned that there's a large body of oddly-consistent empirical evidence (corroborated by my own experience!) that indicates that it's not until year 3 that a business really begins to take off. The revenue from years 1 and 2, to put it indelicately, sucks.

Now, if you're simply changing jobs and not launching your own firm, the three-year rule doesn't necessarily apply; in fact, you should be able to do your own research via sites like Salary.com and Payscale.com to determine how you can expect your pay to rise as you gain experience at your employer. Regardless, you should still assume a conservative ramp-up, building some cushion into your plan in case there are bumps along the way.

Another confession: because of the aforementioned mistaken assumption, there was a time during year 2 (2019) when I was beginning to sweat. Oh, I had backup plans on top of backup plans on top of backup plans -- engineer, remember? -- but until that year, I hadn't actually thought I'd have to use them, and it stressed me out inordinately. And this stress affected nearly every aspect of my life, from how I interacted with potential clients to how I interacted with my children. It wasn't debilitating, but it was like a background buzz, distracting me and generally making life Not Fun.

So if I had to do it all again, I definitely would have waited to go full-time until I had the savings to handle a more realistic three-year ramp-up, and I would have taken the time to do more market research and complete the requirements for my CFP® designation, so that I could have hit the ground running as soon as I left Silicon Labs. Let my 20/20 hindsight be your benefit!

The devil is in the details

Of course, this is all broad strokes stuff; the devil is in the details, in the execution as much as in the strategy. Got any specific questions? Feel free to comment on Facebook or LinkedIn, if that's where you're seeing this, or send me an email at britton@seabornfinancial.co. And hey, if you're an engineer or engineer-ish person looking to go into financial services, I'm especially interested in hearing from you; Seaborn is always on the lookout for financial geeks to join us!

Britton is an engineer-turned-financial-planner in Austin, Texas. As such, he shies away from suits and commissions, and instead tends towards blue jeans, data-driven analysis, and a fee-only approach to financial planning.