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Have you ever left a high-paying job to pursue entrepreneurship?

I was 40 years old and working as a low-level executive at a global entertainment & entertainment media conglomerate (headed a by a very famous mouse) with a mortgage, two kids, 2 or 3 week vacation and packed schedule.

I had only been an employee for 6 years, but I had grown tired of the constant restructuring and increasing administrative burdens of a large corporation. In that time, I observed “lifers” who dedicated themselves to the company receive the shoddiest of treatment. I saw my boss and his peers get laid off, demoted or transferred. One “lucky” executive got terminal cancer so they couldn’t remove him without triggering a law suit (he passed away while employed). Only one executive retained his title and was able to retire with full benefits. Keep in mind that none of this was due to poor performance. It was simply the desire for the new leadership to staff the team with loyal lieutenants and fresh blood.

Schadenfreude moment: The new team was itself replaced within two years (in my opinion due their incompetence) and the cycle repeated itself. I saw the future and wanted no part of it despite the nearly $300K per year compensation.

I waited for the right opportunity as I knew my turn at being laid off would eventually come. When my number came up, I happily took my package and offered my then boss and replacement whatever transition assistance they desired. Before I left, I witnessed more questionable behavior as people back-stabbed each other to retain their positions. One dedicated employee was escorted out of the building the very same morning (for reasons unknown). Others scrambled to find jobs elsewhere often in a lower paying position. Regardless of income level, people were seriously distraught and surprised emotionally and financially. It was sickening to witness. As someone who had seen this coming and planned for it, I tried to pull together the “survivors” into a network but I found most people too distraught or laser focused on finding the next job to want to convene for mutual support.

In a sea of panic—some drowning, some looking for life jackets, some with life jackets—I climbed into my row boat and calmly rowed away. Nobody wanted to go where I was going.

Although I witnessed poor treatment of others, I really can’t complain about my own outcome. One of the ironies of being laid off is that I made over $500K including severance, unemployment, vacation pay-out, stock option exercise, etc. It was the most that I had ever made in a year, and I realize now probably more than I will ever make in a year (by choice for tax reasons).

Phase 1: I had a generous two months notice so before my last day, I made several prudent/ballsy financial moves. I maxed out my 401K since I needed all the tax breaks I could get given the abnormally high payout. While the banks believed I was an upstanding fully employed citizen, I bought a rental property house. I also opened a line of credit against my primary residence. I figured this may be my last chance for awhile to to get credit since banks don’t look too kindly on those unemployed or with temp work.

Phase 2: My last day with the company was in June. I spent the rest of the year planning my future in greater detail, catching up with former colleagues from previous jobs, researching corporate structures, catching up on personal projects, spending time with my kids and traveling the world. I turned down full-time and consulting work despite the natural inclination to get back in the game.

Phase 3: Shortly after January 1 of the new year, I set up my S Corporation and started on an independent consulting project with another global entertainment and media conglomerate. I was fully employed for the whole year. It felt almost like a regular job except with less stress and a smaller tax bill for the same income.

Phase 4: I always wanted to get more serious about investing in real estate. Within 1 year of being laid off, I bought my first apartment. By the end of that year, I had bought my third. I was highly leveraged on these deals and used my home’s line of credit as bridge financing. I completed my third deal just before my consulting project came to a close (timing is everything when dealing with banks). My consulting project ended because my client company underwent a major corporate restructuring (surprise, surprise).

Phase 5: Managing the real estate wasn’t a full time job but it required some attention. I became less interested in consulting because trading hours for dollars was less lucrative than investing in real estate. I adopted the Uber model for my consulting where I only took projects that offered “surge pricing” and interested me.

Phase 6: I reinvested all rental cash flow to upgrade the units, raised the rents, increased cash flow and refinanced with cash out. I consulted as needed to supplement my income, invest in the upgrades, or augment my loan application for the banks. I used the cash out to buy more properties.

It’s been exactly 5 years since I left the corporate world.

  1. I only consult sporadically; my last project was 6 months ago.
  2. I spend a few hours each day managing my investments.
  3. I schedule my day around my kids’ schedules and not a boss or a job.
  4. I pay less taxes because of all the tax breaks for entrepreneurs and real estate investors.
  5. No more cubicles, jostling for a better office, performance evaluations, commuting, conference calls, status reports, PowerPoint presentations, managing staff, managing up, promotions, HR training, restructuring, etc.
  6. The row boat I used to leave the corporate world has been upgraded to a yacht (metaphorically). I’ve tripled my net worth in these 5 years.

The takeaway: It doesn’t matter whether it’s a row boat or a yacht as long as you’re the captain.