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Never quit your job, get laid off instead, says US self-made multimillionaire
Millionaire Sam Dogen engineered a layoff, which got him three months of base salary and a six-figure severance package, allowing him to retire early.
Sam Dogen, the multimillionaire founder of Financial Samurai, a personal finance website, said that its better to engineer a layoff rather than quitting your job because of the unemployment benefits that come along with it in the US, such as a severance package, deferred compensation, and subsidized health care that can give you a financial runway for your next endeavor.
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Who is Sam Dogen?
Dogen, 47, lived as a retired, stay-at-home dad since 2012 after 13 years in the investment banking industry. His engineering of a layoff before retiring got him three months of his base salary with a low six-figure severance package, which when combined with an $80,000 a year passive income allowed him to retire early.
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He has since, boosted his annual passive income to about $380,000 by 2023 using a mix of stocks, bonds, real estate and other investments. But he returned to work last year after selling a part of his investment portfolio to buy a new home.
Dogen gave 3 tips in an interview with CNBC Make It on how to engineer a layoff, provided you already have good passive income coming in. They are as follows:
1) Communicate your present unhappiness
Dogen tells to let the right people know that you're unhappy with your current role. This includes HR or your direct supervisor.
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This creates a win-win situation as it can even create a chance that your superiors will be interested in meeting your needs by providing more flexible hours or even a potential raise.
2) Offer to help ease the transition
In the case that the company is unable to meet your demands, Dogen suggests offering to stay as long as possible to help make the transition, but in exchange of a good severance package, as companies find it difficult to manage the situation when employees leave in short notice.
Dogen stayed for two months, training his junior hire and introducing him to his clients in return for his severance.
3) Negotiate your layoff
Dogen says you can also be more direct and ask if you can be included if the company is doing a round of layoffs because the WARN Act of the US makes it mandatory for companies laying off more than 100 employees to give a 60 day warning and also compensation equal to 60 days of pay.
Its also possible to negotiate a severance package worth one to three weeks of pay for every year served, he said.
