Why you should not quit without a job in Singapore

Recently I read that one of the fellow bloggers has resigned without a job. When I saw his article, I immediately commented to him that doing so was a terrible career move. Obviously people resigned for various reasons. The push factors could be because of bad bosses, poor company culture, lack of motivation to work or being overlooked for promotion. Whatever the reason it might be, you should never quit without a job, unless you are cocksure that you are going to be your own boss. Ten years ago, I made this career mistake, so now, I am going to share my experiences to young folks who feel like quitting from their jobs. Read on before you take the plunge.

Ten years ago
I resigned from my first job almost ten years ago, after deciding that I had enough of the stressful manufacturing environment I was in. As a young engineer, I could not imagine spending the rest of my career doing the mundane stuff I was doing. The pay was not bad, but not good enough for me to do over-time every week. So after quitting, I was very relieved and ready to venture out to another new job. I went for a few job interviews and the first question that the hiring bosses asked would be why I resigned from my previous company without a job. I had a hard time answering them because on one hand, I did not wish to bad-mouth my previous employer, but on the other hand, I felt like telling them how bad the environment really was.

I got my second job two months later, but it was actually though my ex-colleague’s recommendation. The hiring manager was a good man, and the first wisdom he shared with me was that: never quit without a job. This is because you lose your bargaining chip before you even start your interview. For the prospective employer, usually they have a few candidates to choose from, this is especially so in Singapore where there are so many foreign talents. But if you are jobless, you don’t have a job to fall back on. So psychologically, you already lost half the battle because your interviewer(s) has the upper hand. If you are desperate for money, you will take whatever lousy offer they made. But it is another story if you are gainfully employed. You can always walk away from the negotiation table if the offer is not up to your expectation.

Tough times
The labor market is very different from ten years ago. During that time, the influx of foreign talents was not so bad. Nowadays, for every one job opening, I heard there was at least 20 – 30 foreign applicants to 1 local applicant. Furthermore, their asking salaries are usually lower than Singaporeans. I am sure the blogger is going to get a rude shock at the stiff competition in the job market. In his previous job, he worked in the public sector, which traditionally only hire Singaporeans. Now that he left the service, he is going to find it tough to secure a cushy job that pays equally well. He is also going to find the learning curve in the private sector tough. After all, government jobs are not profit driven, so the stress and job expectations are lower. In private sector, you are expected to help the company make money and add value to the organization. So mentally, the blogger needs to adjust his mindset.

Money is still king
The financial blogger tried to take it easy and thought that after quitting, he can have more time to manage his $100,000 investment portfolio. But then again, we need to realize that investing is one thing, losing an active income is another. In investment, assuming your rate of return is 20% per annum (which is very high), you made $20,000 from a $100,000 investment portfolio. That would be about an average of $1,800 a month, hardly sustainable for an average Singaporean in today’s context. Furthermore, such income is not fixed and subjected to market conditions. However, if you lose your $3,500 salary job, you lose at least $50,000 per annum, after factoring CPF contributions and bonuses. So can you imagine the opportunity cost of quitting without a job? Trading your freedom to do something that you like is admirable, but you need to be realize the trade-offs to be made. Is the sacrifice worth it?

Quitting without a job means you have more free time to do something that you love. But your personal expenses would not stop when you are jobless. From a financial point of view, this is definitely the wrong way to build your wealth. In life, there are always ups and downs. This is especially so in our career. We must be able to recover from career setbacks and stand up on our own from the point where we fell.

Changing jobs is not a bad thing. In fact, if you do it for the right reasons, such as career progression and better pay, it can be beneficial to your career. Remember, we can have many jobs in our life but only one career. But always make sure you move for the right reason. Quitting without a job is just pure flawed career move.

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Magically yours,

SG Wealth Builder