Have you ever been fired?  It was probably not as wonderful as it was for me.  My boss did it in order to keep me working there.  A pretty unusual story and the turning point in my life, it was the key to our financial independence.  And it saved my health and sanity too.

Why Was It Good?

There were so many things wrong with my work life at the time.  Sadly, people don’t make changes in their lives until something major shakes their world.  This was one of those things.

It was a long story.  The short version is that when things blew up, my boss handled it brilliantly.

What did my boss do?  Well, first he fired me.

There was a long 10 seconds — is that possible???  Seemed like it.  Done.  Over.  Oh my gosh!  My heart sank.  What was I going to do?

But then it changed.  It was astonishing.  He said he would like me to be an Independent Contractor.  It would get me out of the office, away from the bureaucracy that was creeping into our small company since he sold out to a bigger firm.  Oh, and he was planning on paying me twice my hourly rate, as is “usual” for freelance engineers, due to the short-term risk.

But, I ended up with that gig for seven years.  SEVEN YEARS!

And instead of commuting nearly an hour each way, I could borrow the equipment and work from home most days.  I didn’t think this type of life was possible.

I had been working 80-90 hour weeks plus commuting for 5 years.  Something had to give.  It was my sanity.  He saved me.

I Was a Workaholic

I can’t say this is good advice, but I was doing the work of two or three people.  It all started when I joined the small military contracting company with about 25 employees.  About six months in, we nearly folded when the contracts dried up.  It was 1995, and at the time, the military was cutting way back.  It was called the “peace dividend”.

As we headed for bankruptcy, my boss bought the company for pennies on the dollar, thinking he would at least have a job for a few months just selling off the assets.

And then we got a chance on a military contract that could save things.  I was doing electronics work at the time and had just started learning software to fill in for a key engineer that just quit.  We got the chance to build a new product if we could do it in 10 weeks.  TEN WEEKS!  Yikes.

We took the contract and I started working 90 hour weeks.  Hey, I could do both the hardware and the software. Both.  And I did.

For me, this meant I devoted every waking hour to the effort.  It became my “baby”.  We succeeded, which meant that I could keep doing THE IMPOSSIBLE over and over again as we got contracts to build newer, better versions.  I continued at that pace for the next five years.

I “owned” that product and knew it inside and out.  I didn’t try to become indispensable.  I just loved the work and became somewhat addicted to it.

The Blow Up

Okay, I’m dating myself here.  But have you ever seen or heard the Architect skit from Monty Python?  Here’s a clip from YouTube showing that oldie but goodie:

This audio excerpt is kind of how I was reacting to my boss on his latest announcement of yet another crazy policy brought to us by our new parent company.  Take a listen.  Enjoy!

I love the part where the guy switches to being conciliatory.

“I was a bit on edge just now!”  I love that line.  It says exactly how I was behaving.

Yeah, I was a “bit” on edge!  Luckily, my boss was unbelievably helpful.  Most people would have gotten angry and my job would have been history.  Instead, he turned it into an opportunity.  For both of us.

I jumped on the chance to start my own business and to make lots of money, but most importantly, to be my own boss.  Run my own show.  It solved my problems in so many ways.

But, it seemed pretty temporary.  And that turned out to be a gift too!  Because, as DocG of DiverseFI points out, there are many benefits to a crisis.  Or as Accidental FIRE says, you gain resilience.

How?  Well, let see…

The Fear of Losing My Contract

Have you ever done freelance work?  Even though I was charging an awesome hourly rate, the arrangement was based on the fact that my contract was usually for a few months at best.

My big fear was trying to find another job.  With the military cutbacks, engineering jobs became hard to find.  And I was working out of Sacramento.  I knew I would probably have to return to the ridiculous commute to the Silicon Valley if I lost this gig.  This would mean going back to putting 40,000 miles a year on my car again.  That scared me.

Then there was the fact that we needed both our incomes to make the house payment.  Plus, we were in the middle of a huge kitchen remodel, which even though my husband was doing all the work, was costing us a pretty penny.

We were actually lucky that we did not know that the contracting gig would keep going so long.  Because we would have kept on spending as we had before.

There was the constant threat of losing my income.

And it happened.  Several times I waited three to six months for the next contract.  All the while, I would worry that was the end and I’d have to get another “regular” job.

And then, they would get a follow-on project and I would be crazy busy all over again.

That feeling was the incentive for us to start tightening our belts.

Paying Off The House

The first thing I wanted to do was to get rid of the house payment.  Why?  I know a lot of others in the personal finance community have debated whether to pay off the mortgage.  Check out these posts from Derek Saul at LifeAndMyFinances and Mrs. Adventure Rich, who both consider the tradeoffs when you can potentially earn so much more in the stock market.

But, with the thread of job loss, our goal was to make it so that if I lost my income, I wouldn’t have to hurry to find another job.  I wanted to be able to have the freedom to not work for a while and search for my next job at a comfortable pace.

I launched into an all-out effort to attack the mortgage, which was around $150,000 at that time.  Our interest rate was 7%, a lot higher than in today’s market.

The good news was that with my large hourly rate and tons of hours of work, I was bringing in $3000 and sometimes $5000 every week.  Of course that was before taxes and business expenses.  But it was still a substantial amount of money, even then.

It took two and a half years, and it got to be really exciting.  I would sometimes send $20,000 as an extra payment.  I loved to see the next bill arrive, just to see how much we had whittled that principle amount down.

Then the day arrived.  We wrote out the last check and owned our home outright.  Step one!

My Financial Education Began

Right after being fired and starting my own business, I realized that I was now in charge of my retirement savings.  Having a 401K for years, I had learned only enough about investing to choose a few of the mutual funds to direct my money to, and that was about it.

Now, I was setting up a Keogh plan, which allowed me to invest in anything.  Anything.  I didn’t know how to choose mutual funds or stocks.  They had always provided a list of 10 or so.  I had no idea where to begin so many possibilities.  It was time to start reading.

I read.  And read.  I got hooked on the topic.  Here is a list of what I read just that first year (note, I don’t have any affiliate links because I do this blogging thing as a hobby!):

 

These books really sparked my interest.

And it was March 2000.  Just before the dot com crash began.

I Moved to All Cash in my 401K

I timed the stock market, except it wasn’t a dream this time.  As I started learning about market valuations, I realized I had all my money in a really overpriced market.  The dot com companies made little sense.  P/E values were high or non-existent for many companies that didn’t even have earnings.

It seemed that the first thing to do was to roll my 401K into an IRA.  Then I could regroup as I figured out more.  But with the market seeming so much like a bubble to me, I decided that I would move everything in my 401K to a money market fund.  The rollover could take up to a month to process, so this way, I would choose which day to sell.

I watched the market and chose a day that stocks were on the rise.  And just like that, I was out.

There was another thing that made things interesting.  At that time, broadband internet connections were just becoming available.  And I had access to one through Comcast.  With my business set up at home, it was not only a great idea for my work, but it allowed me to be able to start searching stock market information without the slow WWW – the World Wide Wait.  That was how people joked about the common dial-up connections of that era.

Investing in Individual Stocks

I know, I know.  I know what you’re thinking.  What about VTSAX?  Why didn’t I just use a whole market index fund?

I learned about index funds, but the problem that I saw was that the dot com hysteria had made the index itself quite risky.  As I digested books about stock valuations, and read information about Warren Buffett, I started searching for companies that had safer prices.

What was amazing to me is that there were actually many companies that were good values at the time.  The reason?  Brick and mortar businesses were out.  Online, dot com, that was the future.  Investors were dumping perfectly good businesses and instead, opting for what seemed to me as a gamble.  But it was all the rage.

With a fast internet connection and a newly opened Schwab account, I began purchasing individual stocks.  Here’s what I learned:

  • How to read an annual report and understand earnings
  • As a small investor, I don’t affect the share price with my measly purchase, unlike Warren Buffett
  • Many times a company did poorly, but would spin off great businesses. You don’t see this when you look at a chart.
  • Losers could only go to zero. Winners had unlimited growth.
  • Dividends are amazing! Especially with undervalued companies.
  • After September 11th, the market reopening was historic. Some stocks didn’t open at all for hours and hours.
  • Fees are really low if you rarely buy and almost never sell.
  • Stocks are businesses. You own businesses.  It’s hard to get that understanding with an index fund.  I learned to think like an owner.
  • You see how a stock gets hammered on bad news, but recovers. It helps you to realize that all reactions are overreactions.  This makes for great opportunity.

Recently there was a podcast on ChooseFI with this topic.  Brian Feroldi did a really nice job explaining several advantages, which are similar to what I found.

The Spreadsheet

As I learned more and more about finance, I started tinkering with a spreadsheet.  Asking myself various questions about our future, I entered test inflation rates and test portfolio growth rates.  Experimenting with various numbers, I started to see for the very first time….that we could retire early.

Early?  Okay, you millennial whippersnappers out there.  Early for us would be something like me at age 52 and my husband at 55.  I was 40 years old at the time and our combined 401K/IRA savings were around 400K.  It was spring of 2000 and we were on the verge of a major market correction.

But I entered gains like 8%, and ridiculous inflation rates like 5%, just being a little conservative.  We might live to be 95.  Or more.

I didn’t know anything about the 4% rule, or Monte Carlo analysis.  I hadn’t yet found Big ERN to learn all the ins and outs of Safe Withdrawal Rates.

But it looked promising.  So for the first time, we set a goal of leaving work in twelve years time.

Forming a Corporation

The experience was truly a lifesaver.  I got out of the cubicle and learned to run a business.  Over the years, I eventually went from being a sole proprietor to establishing an S-Corporation.

I named it “YZE Designs” and my slogan was:

First you ANALYZE, then you remove the ANAL part, and what’s left is a YZE (pronounced “wise”) design.  Not bad, huh?  I loved that eraser logo!  Not only that, but I got a custom license plate with “YZE S” on it!

And as a do-it-yourselfer, I tackled every detail on my own.  From forming the corporation, to doing my taxes, I did it all.

The hardest part turned out to be payroll.  I had to pay myself as an employee.  If you take a look at all those items deducted from your paycheck, each of those represented something to pay.  Workman’s comp, unemployment, Social Security, Medicare, Federal and State taxes, and so on.  Some monthly, others quarterly, the actual payments went on on various forms.  It was pretty involved.

There were few books to help because each state has its own rules to comply with.  I ended up using a company called ZPay to allow me to do my own payroll.  Amazingly, they are still around today helping people like me to DIY.

Looking Back

As I look back, I will always be grateful for this major shake-up in my life.  I retired at the age of 51, and could have probably left work forever 5 years sooner.

I regained my health, had time for exercise and rest.  And got my financial act on target.  We are FI today because of it.

So thank you boss.  Thanks for firing me!

 

Tell me, have you ever been fired?  Or had a major shake-up that lead you to a better life?  Did it turn out as well as it did for me?

39 Comments

  1. Ms ZiYou

    Interesting article – and probably the best way to get fired!

    I’ve never been fired, but I do work freelance, which is ace, and the way forward in my mind.

    Reply
    • Susan

      Yes, this was probably the best way to get fired. Depending on the field, freelance is better. You end up working harder in a given hour to make sure your clients are well taken care of. I found that even when I had months off waiting for my next opportunity, I still was ahead financially. Regular employees need the security and they often don’t realize the upside to the risk. Thanks for your comment!

      Reply
  2. Tonya@Budget and the Beach

    I haven’t been fired…yet, but I was laid off from one company on a Friday in a Dept I was a terrible fit for, then re-hired that following Monday from a boss and a Dept I was with and loved for 8 years (until the entire company was bought then everyone was pretty much laid off). And yes, it’s very shocking and hard, especially if you’ve never been through that before or don’t see it coming (although I think most do, but put the blinders on). This is why I’m such a huge advocate of the f-off fund, the emergency fund..whatever you want to call it. It takes away AT LEAST the financial worry so you can just deal with the emotional side. Glad it turned out great for you!

    Reply
    • Susan

      OMG, that fired-rehired weekend must have been really hard, but similar to me, a blessing too. You are totally right about the need for the F-off fund. That is the main thing we got by paying off the house early. It was not exactly a fund, but a lack of that huge bill, allowing me to be without work for months on end. Your story sounds much more challenging, and I’m so impressed with the way you have built up your skills and client list to really make a great freelance business for yourself. I am glad for you as well that it is turning out great!

      Reply
  3. Moose

    I’ve never heard of being fired and then re-hired so quickly! In finance, people usually just get fired…no “and then”. Very cool story, and look at everything it led to!

    Reply
    • Susan

      Yeah, usually there isn’t “and then”. Because I worked at small companies, the layoffs were sometimes half of the entire company. Brutal. Working in finance, you probably have a sense of what might happen with layoffs or company closures. It is not a bad incentive to get your finances set up so you can have your bags packed by the door of your office. I like to see it as “free to go and choose to stay”. Thanks and glad you enjoyed the story.

      Reply
  4. Doc G

    I love working for myself and being a consultant. Although scary in the beginning…it supercharged your pathway to FI! Thanks for the link.

    Reply
    • Susan

      Once people get past the scary part, most love independent consulting work. Thank you for your post on how a crisis can be a benefit. That article is a great inspiration. I’m happy to include it.

      Reply
  5. Joe

    Your story is so amazing. It’s great that you had such a good boss. I’ve never been fired. If I stayed another year or two at my old job, I’d probably been fired. My productivity wasn’t good at the end. Nice job. Enjoy your retirement!

    Reply
    • Susan

      Your productivity was probably going to your blog, which is so excellent! My boss bought that company and then sold it for 3 Million bucks, and should have retired himself. He’s still working, nearly 20 years later. Sometimes I think he should read some great FIRE blogs, such as yours. Thanks!

      Reply
  6. Accidental FIRE

    Awesome story – maybe everyone needs to get fired (before they get FIRE’d)!!

    A good friend of mine recently quit his DoD contractor job and broke out on his own as an individual consultant for the same client, kinda like the transition you made. Like you did, he’s bringing in way more money (before insurance and benefits) and he has sooo much more flexibility. He loves it. But he also said he feels like he’s “hanging from a think string” sometimes because the contract could go poof.

    I’ve never been fired myself but it sure worked out for you. And Monty Python is a surefire way to my heart, great stuff Susan and thanks for the mention!

    Reply
    • Susan

      Your friend has courage to do it on his own. I hope he’s read your post and has not only an Emergency fund, but a Resilience fund. Contracts do go “poof” and also a lot of times it is like pulling teeth to get paid, even from large firms. But if all goes wrong, he can turn to Monty Python too, and sing along with “Always look on the bright side of life”.

      Reply
  7. freddy smidlap

    you betcha i’ve been fired. or was it “you can’t fire me! i quit!?” i’ve never been canned from any good jobs but in my young single days jobs didn’t matter that much. did you get any of those 3000% gainers from the early aught’s like netflix, disney, or amazon that you still hold? that’s my dream.

    Reply
    • Susan

      I tell you, I was really pretty much at my wit’s end with the way things were and I let my boss know it. Yeah, I was over the line. Much like that Monty Python clip. You are probably as outspoken as me at key moments! As for my stocks, I did have Chico’s and sold it when it went 12x, but by far my best investment has been Phillip Morris/Altria. Someone posted this link on ChooseFI. I was able to guess it was the best investment. I know, people really get mad to hear of that being my big winner. I’m totally anti-smoking, but the libertarian in me says that people should be allowed to be stupid if they choose. Also, I doubled down on that investment when I saw that the state of Florida would not allow them to go bankrupt when the lost their most major lawsuit for more than their entire Market Cap. Governments are so invested via taxing smoking that they ensure a great outcome. It is just one of those eye-opening lessons I’ve learned along the way.

      Reply
      • freddy smidlap

        here’s my fearless prediction going forward: big tobacco will be the big winner with legal pot. they have the deep pockets for when it’s regulated and already know how to grow stuff. i’m sure they’ve been working on it for many years.

        Reply
        • Susan

          You are probably right. It is sad to say, but a lot of the most successful products are addictive. Oh, and that reminds me. I did own Netflix for quite some time. Too overpriced for my taste now. But so many people binge watch that it’s right up there with cigarettes in ruining lives. I suppose people who invest in VTSAX don’t have to deal with the guilt, even though they might own more of this stuff than I do!

          Reply
  8. Half Life Theory

    Wow, this is awesome One can only dream of getting fired this way LOL. But the uncertainty would definitely be so difficult, but then again $20,000 a month i income, decisions, decisions 😉

    Awesome post, i really enjoyed reading

    Reply
    • Susan

      Thank you for your kind words. I remember when I had my first job I met an engineering consultant making a high hourly rate. He told me that regular employees fear that uncertainty, and they don’t realize they make so much extra money, it pays for months and months to find the next gig. So later when this happened, I recalled his wisdom and it helped a lot. But I still hurried to get that house paid!

      Reply
  9. Kate

    In our experience, a job loss also was a HUGE trigger to changing our financial future and story. And we both were out of work at the same time! So, awesome for you that this was a blessing as well, it turned out to be for us, too.

    Reply
    • Susan

      Failure is often a blessing in disguise. I can’t imagine dealing with both of us out of work at the same time. That would be a real challenge, and darned motivating too. I started listening to your podcast and it’s very good. You have a nice voice and a good interview style. If that was one of the things that came from it, then hats off to you.

      Reply
  10. Mrs. Groovy

    I was fired, “let go” and quit so many jobs I can’t even remember them all.

    When I was acting, I do recall a very interesting overhaul of the ad agency business. Proctor and Gamble and all the big players (think “Mad Men”) had in house casting departments for hiring actors. These were Madison Ave companies with huge overhead. Then almost overnight they all closed up the casting departments. Many of the casting directors set up their own shops with offices on Madison Ave, but twenty blocks lower where the rents were much cheaper. Then they contracted out to the ad agencies and worked for the same clients (and more). And many of them flourished, much more so than when they worked for a corporation.

    Hat tip to you for rising up through a difficult situation and turning it into a wonderful opportunity!

    Reply
    • Susan

      Wow, Mrs. Groovy, you have some interesting experiences. As I’m just catching up with much of your story, I found your post recommending “Yes, And…”, as improv actors do on stage. In many ways, being fired and making more out of it is like that. I have a feeling that your experience in acting was fundamental in setting the “stage” for your financial savvy going forward. Thanks for stopping by, especially now during your busy, busy move!

      Reply
  11. Kristopher lee

    Great story about being fired. Reminds me of the last episode of Grace Under Fire where she got fired and it was a good thing.

    Reply
    • Susan

      I’ve never seen Grace Under Fire. We enjoy older TV shows and we are watching “House MD” right now, on a recommendation from this post from The Escape Artist. It is fun to realize that the FIRE message is out there in various art forms. I’ll check that one out. Thanks for stopping by and congratulations on being featured at Camp FIRE on the same day!

      Reply
  12. JP

    My husband was let go from his job last month. In reality though it was never the job he had hoped it would be, and the last 4 months were downright toxic. It’s still TBD what he will do next, but since we are in good financial shape, he can take some time to decide what that might be. (It might even be freelancing!)

    Reply
    • Susan

      Although my situation worked out so well, I definitely feel for others who have lost their job. Yet, if his work was toxic, I hope it will be a blessing in disguise. From reading your recent post about it, it looks like it is currently a positive in your lives, which is great. With your background in finance, I know you know that this is the reason to have that extra savings. You don’t want a short term need for money to mess up your long term goals. I wish him the best, especially if he goes the freelance route!

      Reply
      • JP

        Thanks, Susan!

        Reply
  13. Emparion

    Never been fired, but fired a lot of people over my career. Often firing (or being fired) is a good thing. It gives someone the opportunity to be successful at something else. We should often look at it as a good thing!

    Reply
    • Susan

      Thanks for your comment. People don’t realize that it is also very difficult to fire someone. I recall taking a business class years back and the teacher had students practice firing him. He demonstrated it was not easy. I do believe that it opens up opportunities. Whatever it is that has brought the situation to a particular brink, the writing is on the wall that another path is needed. Of course, not all new directions work — right away anyway. Sometimes it doesn’t work out as well (at first), but it definitely can be a way forward if you have the right attitude. Thanks for your input!

      Reply
  14. Brandi Gates

    WoW . really awesome . everyone deserve this type of boss lol
    thank you for sharing great experience with us about bosses

    Reply
    • Susan

      Yeah, I was very lucky to have a creative and understanding boss. It truly was a win-win for both of us. Thanks Brandi!

      Reply
  15. Imdad Azman

    I thought it’d become a sad story and how it happened from reading the headline, but what an unbelievable twist! I guess your boss saw the skill in you haha

    Reply
    • Susan

      It was a really small company! Yeah, I love headlines. Glad you enjoyed the twist. Life is like that. Lots of good things come from these moments of failure. And I’m happy you enjoyed the story. Good to hear from you.

      Reply
  16. Angela @ Tread Lightly Retire Early

    What a heck of a story! And while never quite as many hours as you (except for the short stint of working two full time jobs at once), I found myself down the workaholic rabbit hole. It’s amaxing the stories we tell ourselves about our value as people based on the number of hours we put in any given week.

    Reply
    • Susan

      Two full time jobs at once! I think that’s even harder because you not only put in 80 hour weeks, but two commutes and two sets of problems to keep you up at night. You are so right about how we act like this is a badge of honor. I am so glad that it shook me up and changed my attitude. I truly appreciate this financial community and how people like yourself are strong voices, helping influence people to find a better direction.

      Reply
  17. Mr. Groovy

    “Okay, you millennial whippersnappers out there.”

    You’re so incorrigible. I love it, Susan. Thanks for sharing your journey to becoming a financial rockstar. It was a great read. Lot of fond memories–Peter Lynch, “peach dividend,” and dial-up internet connections. Oh, just for the record, I’m with you. Pay off your mortgage. Nothing like the security of knowing your home’s viability isn’t dependent on having a job. Cheers.

    Reply
    • Susan

      Oh, you are making me laugh at myself now. But yeah, I’m just jealous that the whippersnappers figured it out so young. I’m still going to refer to my retirement as “early” though. Now, wait. A peach dividend? I think you mean peace, but a peach dividend sounds very good too. Hey, we FI people love our dividends. Thanks for stopping by. I’m still chuckling.

      Reply
  18. Revanche @ A Gai Shan Life

    Not fired but two situations in a row: Laid off because of malfeasance on the part of our bosses (we were all investigated and found to be completely innocent because it was all at a higher level) in the middle of the recession which led to a very long job hunt and taking a job that seemed to be terrible but turned into a series of opportunities. From there, when things were as bad as I thought they could be, I was recruited to a risky opportunity that turned out to be the best possible change to our lives.

    It killed my commute, first, which was amazing. It was incredibly flexible: I was able to work any time day or night that I chose, so when my fibro flared up, I could easily lay down for a couple of hours and recover instead of doing the worst thing possible for it – work straight through, tense and in pain, and stressed. That made it possible for me to start living my life again, some days with lower pain than I’d had in years, and improved my marriage and made it possible for us to have a human child to add to our dog-kids. That job only came about because of my spending two years in corporate hell so it was worth it.

    Reply
    • Susan

      Oh, I feel for you. What an ordeal you have gone through. I tell you, there is something about these situations. Eruptions that shake us loose from our former patterns of living, put us on the brink, and then somehow, we come out the other side better for it. The beauty of it, I think, is that once you have experienced this, you are less afraid. And that allows you to be more resilient and bold going forward. I am so glad that you were able to have better health and a child! Thank you for sharing.

      Reply

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