Want To Leave Your Job To Follow Your Passion? Plan For It
Young professionals in India are leaving high paying jobs to follow their passion. From taking up freelance work, to creative fields like photography or writing or even starting their own ventures, no dream is today bound by the lure of a steady pay check. However, lack of regular income can act as a deterrent, as a financial crunch could goad you into giving up on your dreams for the sake of stability. But all dreams are achievable with proper financial planning.
According to independent financial adviser Amanjot Kaur, there are three things one must keep in mind before making any big moves.
“First, you should have a contingency fund ready, depending on what you are planning to do after quitting your job and the kind of support you have from your family. If you have a spouse with a steady income to support your family, then it is okay. Otherwise you need to have contingency funds which can cover a year’s worth of daily expenses.”
This is important as a lack of funds can discourage you from following your passion and keep you in two minds.
Tapsi Dhanda, who used to work as the head of content for a non-profit organisation, started freelancing a year ago. This journey hasn’t been an easy one. She recalls, “The main reason why I stayed in a nine to five job, from the beginning of my career, was because it is the most conventional way of getting a steady paycheck. Even though pretty early on I knew I didn’t enjoy it thoroughly. It wasn’t as if I didn’t enjoy what I did, but it was the nine to five routine that I had a problem with. Only last February, when I finally quit my job, I decided to give freelancing an honest shot.”
However, she had very low financial planning in place when she decided to become a freelancer. “Whatever little money I had was what I had saved from my previous pay checks. This was just enough to sustain me for three months after I quit my last job. After that I definitely got tempted to take up a full-time job, because suddenly it hit me that my bank balance was going really low and I had to do something about it.”
The main reason why I stayed in a nine to five job, from the beginning of my career, was because it is the most conventional way of getting a steady paycheck. – Tapsi Dhanda
The second thing to have covered, according to Kaur, is medical expenses which may arise in the future. Medical emergencies and tragedies come unannounced in our lives. One should always be financially prepared to deal with them especially when there is no steady income. “These things must be in place, even if you are putting your own money to pursue your passion. For instance, even if you are pulling in everything you have for your startup, keep your emergency funds aside. That way you’ll have peace of mind.”
Lastly, Kaur suggests long term investments as a means to proper financial planning. Says she, “Invest in a long-term equity and if you can manage, also have an SIP going on. Try and continue with monthly savings and investments. However, especially when people move to freelancing or start their own business, it is tough for them to have a steady monthly income at least in the beginning. I’ve come across several clients who tell me that all their returns and earnings will come in bulk. For them, financial planning on a monthly basis can’t work out.”
For such situations Kaur suggests, “Plan a time horizon. The best way to do this is to park that money in financial instruments the moment you get your payment, for e.g. something like liquid funds. You can keep using the money whenever you need it.”
Invest in a long-term equity and if you can manage, also have an SIP going on. Try and continue with monthly savings and investments. – Amanjot Kaur
Giving up on your job to follow your passion is a very brave move and very few end up taking the plunge. However, apart from guts, it is important to plan properly so that this transition is a smooth one because our dreams are certainly worth it.
Shailza Sood Dasgupta, Founder Director of Homestays of India did just this. After working in the corporate sector for seven long years, Dasgupta made a switch to launch her own company, a move for which she planned in advance.
“It took me around a year to consolidate proper funds. I saved enough money to have a backup just in case my ideas didn’t click. Initially, I started a travel group called Chalo Let’s Go, which did well. However, now I am focussing more on my homestays project. It has been over ten years since I made the switch and it has worked out well for me.”
Financial planning is important as it becomes easier to maintain the lifestyle you have gotten used to with a steady income. You have to put in a lot of hard work till the time your venture begins to give you returns that can match your paycheck. – Shailza Sood Dasgupta
So what measures did she take to ensure she didn’t have to give up on her startup dream prematurely? “I was in a good high paying job before I quit, so mainly I saved most of my earnings and it came in handy because in the initial years one can’t expect as good a return from projects as compared to a steady job. That is a crucial time when you need some kind of financial support or backup. So financial planning is important as it becomes easier to maintain the lifestyle you have gotten used to with a steady income. You have to put in a lot of hard work till the time your venture begins to give you returns that can match your pay check.”