A couple days ago, I had an consultation with a new client. He works as a teacher and he’s debating whether he should leave his job. He had been considering whether to take up one of the Go People Courier jobs that he saw was available online.
He loves teaching but he hates all the politics around the job.
Hence, he has a few properties on the side to keep him distracted.
As we all know, full time teaching comes with a few perks.
A stable job that’s unionized, meaning job security, a pension and the entire summer off…
It’s a pretty good gig for someone who has a young family.
“But I am frustrated. I got better this week, I don’t think I will do it. I won’t do it. I love teaching.”
His reasoning went in circles. He would be frustrated for a moment, then the next he would say he loves the school kids.
He then turned to me and asked, “what do you think?”
In many ways, we had a lot of similarities.
I grew up being an accountant. It sounds funny but it was true.
When I was 14 years old, the education system back home required us to choose a stream, namely Commerce, Science or Art.
My decision process was relatively simple. The art stream required me to study Western History and Chinese History. There’s no way I could remember all those wars and names and years they occurred. So art was out of the question.
Although I like math, I didn’t like biology. The science stream required top grades that I didn’t have.
I landed in the commerce stream, studying accounting, economics and commerce at the age of 14.
The only ‘A’ I got from the notoriously difficult public exam in Hong Kong was from Accounting. It’s no joke that I grew up being an accountant.
This skill got me into one of the best accounting programs in Canada. With the co-op program at University of Waterloo, I got the job experience I needed to guarantee a job when I graduated so I didn’t need a job search when I left like other people I knew did.
With the license, I could easily get a job with an almost-guaranteed level of salary. I also had to complete the CPA exam but the CPA test prep really helped me pass it. It’s a difficult exam!
My parents’ response: Mission accomplished! She’s made it and we don’t have to worry about her life! At least not financially. ?
Little did they know that I had been complaining about how bored it was working as an auditor every single day.
I did try different things. I was at one point an operation manager at a private label manufacturing company. That didn’t go so well since I had no idea what I was doing.
I ended up working as a Senior Manager in Financial Reporting at the largest grocery chain in Canada.
That was when I decided working for a big company wasn’t for me. I returned to texting my friend about how bored I was every single day.
Don’t get me wrong, they’re a great company. I couldn’t be more grateful for the opportunity to work there. It got me out of the rut, gave me the confidence and opportunity to pursue my next goal! (Thank you for all my mentors there.)
My second career is still an accountant, but this time, I am my own boss. From an accountant to entrepreneur, the journey was tough and it’s taken many years to build a business.
I did very little planning and calculation when I left, but here’s what I would have done had I been as wise as I am today, to make jumping ship a bit easier.
Plan, plan and plan
It helps to plan. I didn’t have much of a plan so leaving a cushy job with a comfortable salary was not easy. It wouldn’t be easy for anyone but it would help to set the expectation straight before jumping ship.
These are the two tools that could help my client, or you, to plan ahead.
Tim Ferris, author of the Best-Selling book The 4-Hour Work Week, gave a Ted Talk in 2017. His talk was titled, “why you should define fears instead of your goals”.
The book I am currently listening to, Barking Up the Wrong Tree written by Eric Barker, also talked about a similar strategy as Tim Ferris.
The steps are simple:
- Write down what your objective/goals are
- Write down the result if you had achieved the goals
- List out all the obstacle you may come across
- Plan against each obstacle
- Write down the costs of inaction
If I were to start all over again, here’s my steps.
Objectives/goals: Quit my job and start my own business
Result if I achieved the goals: Not bored, happy and satisfied career, make good money along the way
- No money to support myself when first started
- No clients
Plan against 1st obstacle: No money to support myself when first started
My first step I took was to define how much I needed to survive monthly. These steps should be taken while you still have a job.
I was living on my own in a 3-bedroom 3-bathroom townhouse in South Etobicoke. The house had appreciated. I didn’t need that big a space to be honest. Here are items that I could have done and I did consider at the time.
- Sell my residence at the time, buy 3 student rentals in St Catharines, each property would be generating positive cash flows of about $1,000 per month per house
- If I can’t sell my residence at a good price, refinance it and buy properties in St Catharines
- Live with Erwin, rent out townhouse and save on living costs
- End my car lease early (I was driving a nice car at the time, I should have never leased that car)
- Borrow money from parents
- Sell my residence completely and live off savings (that can last a couple of years)
- Ask for severance to be let go
- Ask for part time work
- Go back to get another job if I fail
I ended up keeping my townhouse and bought a student rental in St Catharines that had generated close to $1K of cash flow every month. I didn’t have to borrow money from my parents.
Some of my clients indeed asked to be lay off. In exchange, they got severance. They got paid from their previous employer while they’re pursuing their dream! Isn’t that amazing?
Alternatively, you could also request an alternative work arrangement. At the time when Erwin decided to leave the corporate world, he asked to switch to part time to supplement his income.
If you’re a teacher, you may even request for one year sabbatical leave. Keeping your job while going for a different journey. Your sabbatical leave maybe unpaid but all you need to incorporate in your plan is one year of expenses, rather than an unknown in the future.
Plan against 2nd obstacle: No clients
No clients = no money = no business = I have to go back to find another job.
This is an obstacle that I didn’t put too much thought into. At the time, I was extremely naive, “I’m a licensed accountant, why wouldn’t people come to me?”
Turns out my license can only get me a job, it doesn’t automatically get me clients if I were to start a business. ?
If I were to start my business all over again, here are the possible plans I could undertake BEFORE I quit my job:
- Define the business I would like to get in
- Define the niche early
- Study the behaviour of my target clients
- Attend their conferences and understand their pain
- Study marketing
- Read as many books about starting a business and marketing as possible
- Make friends with the people who have already done it and learn from them
Of course, I didn’t do any of these at the time, which made my journey a bit tougher than others.
Depending on what your obstacles are, the key here is to recognize them early, think about the possible options out there and plan accordingly.
Cost of inaction: I will be miserable and bored, but I have a job. I will regret not trying.
You have a plan. What’s next? Let me use some wise men’s words to explain.
“If you always do what you’ve always done, you will always get what you’ve always got.”
“You miss 100% of the shots you don’t take.” ~ A quote from either Wayne Gretzky or Michael Jordan.
“Just do it.” ~ Nike’s slogan.
Take action, it’s just that simple. It can be a small step at a time. Even starting research today, or read a book about marketing, all these steps count.
Give yourself a deadline, hold yourself accountable. The Universe will work with you.
Play the long game
Last note, the CPA, CA license and the almost guaranteed salary level are blessings, but they can also be the curse in my career.
Good salary allowed me to afford a lifestyle. If I had to start any career all over again, I would have to start from the bottom. Starting from the bottom means that I had to sacrifice the existing lifestyle, at least temporarily.
The more complacent we are, the less likely we would take a risk.
I was very short-sighted. I didn’t understand the long game at the time. But luckily, I took the leap of faith anyway and it did payoff.
This is also a principle I remind myself constantly when I parent my kids. What if they don’t do well in school? What if they don’t behave the way we want them to at this very moment?
Failing schools do not mean failing in life.
Going to professional schools may mean a stable and secure job, but it isn’t a necessarily a ticket to a fulfilled life. Hopefully, this will remain as my parenting style in 15 years when my kids grow up.
Until next time, happy Canadian Real Estate Investing.
Cherry Chan, CPA, CA
Your Real Estate Accountant