My retrenchment letter was handed to me on Nov 25, 2019.
I still remember that day vividly as I was scheduled to meet my immediate boss for my annual performance appraisal. Instead of seeing him in the meeting room, I saw my managing director and the human resource director.
My managing director was looking visibly tired and apologetic when he handed the letter to me. “I am sorry that I couldn’t find any suitable projects for you to lead and we have to let you go”, he said.
My mind went blank as one could never be prepared for a “retrenchment moment”. Of course, retrenchment is not unheard of, especially for PMETs, who are at the at-risk age of 40s and 50s. However, when it happens to you personally, the emotional roller coaster which you go through would leave an indelible mark, no matter how mentally prepared you are.
5 Emotional Stages of Retrenchment
The emotional stages that one goes through is somewhat like this:
Stage 1: Shock and denial. Your immediate reaction would be “Why me?” and “How is this possible when I have been getting sterling performance appraisal year after year?”
Stage 2: Anger. You would be furious at your bosses and your colleagues. “How could those colleagues who often skived still remain in the company?
Stage 3: Depression. Many unfortunately might sink into depression, as losing a job is often likened to losing a loved one. There is a grieving process involved and it might be years later before one could finally accept the sad fact.
Stage 4: Guilt. You might also ruminate over and over again, feeling guilty about rejecting the last job task your boss assigned to you before that fateful day. “If only I did not turn down his request.”
Stage 5: Acceptance and relief. It might be a long while later before you finally accept the retrenchment fact. It might take even longer for you to be able to look back in relief that you survived the ordeal.
I would be lying if I said I was not in a state of a shock then. Boy! Was I furious too. It felt like my years of commitment and good work for the company did not amount to anything ultimately.
Thankfully, my emotional roller coaster upon receiving the news went from Stage 1, 2, by-passing Stage 3 and 4, and reaching Stage 5 all in the matter of a few days.
Many of my colleagues were surprised how well I took the news. In fact, some were surprised that I showed up for the Company’s Dinner & Dance, which was held within the same week.
Calm After Storm
How did I manage to regain the control of my emotions so quickly? The answer is I had “visualised” my retrenchment when I was in my 30s. Back then, I realised that it was highly unlikely I could remain as a marketing professional when I hit the age of 50. I have seen anecdotal examples of older friends and bosses in their late 40s and 50s who had been retrenched.
Companies generally like to hire younger employees whom they feel these employees are more in touch with the latest trends and technology and able to learn new things faster. With this in mind, I embraced the Financial Independence Retire Early (Fire) movement when I was in my 30s.
What is Fire?
The concept behind the movement was mooted as early as 1992, shared in the best-seller Your Money Or Your Life by Vicki Robin and Joe Dominguez. The authors strongly discouraged people to be slaves to their jobs by recognising one’s life on earth is finite and therefore there is a need to make conscious choices.
The Fire movement gained popularity after the last financial crisis in 2008, with many blogs sharing ways on how to live frugally, save intensely and invest well. This is so that one’s passive income can cover one’s life expenses during the years of retirement.
I actively planned to achieve financial independence by age 50. Fire to me was not to retire early, but to have the freedom to rewire early.
Studies have shown that retirement often leads to physical and mental decline due to boredom and social isolation. However, rewiring early means engaging in meaningful work that one is passionate about.
I am glad to say I achieved it at age 48. If it was not for my retrenchment, which created an impetus to switch my pathway, I would have continued at my old job for many more years.
I did my final financial calculations on the very day when I received my retrenchment letter. To my relief, my base expenses could be covered by my passive income and all my debts had been paid up. My mental well-being has been saved by the fact I have achieved Fire.
How did I achieve Fire?
My early start to Fire journey more than 10 years ago has reaped its rewards.
My journey was aided by having a supportive spouse that shares the same vision and money habits. Moving back to stay with our parents when our son was born also meant we could turn our matrimonial home to a money-generating asset through rentals, though this decision was made purely to cut down shuttling time between the homes.
Seizing opportunities during crises and making the right investment decisions in the property market helped us get good returns and grow our money faster . We also avoided additional and non-essential expenses, such as paying for private tutors for our child, as we did not want him to be dependent on extra tuition outside the classroom.
With that financial freedom, I was able to cut short my grieving process of losing my job. In fact, without the worries of having to put food on the table for the family, I was able to quickly change my perspective of the retrenchment being a “personal tragedy” to a “blessing in disguise” as it was an opportunity for me to rewire.
Rewiring Early
In his book 21 Lessons For The 21st Century, historian Yuval Noah Harari wrote that due to rapid technological advancements through artificial intelligence, machine learning, blockchain and more, the threat of redundancy is very real.
These frequent tidal waves of change can cause a great strain on mental health as people fear irrelevance and losing their economic worth. “You will need a lot of mental flexibility and great reserves of emotional balance to repeatedly let go of what you know best and learn to feel at home with the unknown“, he said.
However, I feel this emotional balance and flexibility can only be possible if we do not have the added stress of having to ensure we have enough funds to put food on the table.
Despite the Government’s best efforts of re-skilling and retraining older workers, and raising the retirement age, we need to better help ourselves or teach our next generation to take an active interest in achieving Fire by changing our mindset to one of “less is more”.
Mindset change to achieve Fire
English writer and philosopher G.K. Chesterton once said: “There are two ways to get enough. One is to continue to accumulate more and more. The other is to desire less.” Many people fail to recognise the importance of “desiring less” in the equation.
Learning to gain financial independence through managing our money better is not only necessary for living comfortably in later years, but it is also important for our mental well-being should something unfortunate happen. It gives us the ability to rewire at a comfortable pace with money worries out of the way.
It has been two years, but I still remember how hard the news of losing my job hit me. But my early planning put me in a good financial and mental space to deal with the change and set me on a more fulfilling path.
[This was first published in The Straits Times on 2 January 2022.]
It’s awesome that you achieved FIRE, thanks for sharing your story! I am working towards it too by investing my savings and not letting my expenses grow too much 😀