How and Why You Should Practice Big Financial Moves — BEFORE You Need to Make Them
Kim and I have rolled into the Denver area, where we'll spend the next week hanging out with family and friends. While here, I'm also working with Mr. Money Mustache to prepare for our upcoming workshop for World Domination Summit. Yesterday afternoon, as we sat in the RV outlining our presentation, Pete and I discussed the idea of “practicing” big financial moves before those moves are actually necessary.
The average person doesn't look for a new place to live until she needs a new place to live. She doesn't practice buying a car until she needs a new car. She doesn't put in job applications until she needs a new job.
In other words, the average person is reactive. He makes big moves when life dictates that he make big moves. As a result, he loses a lot of leverage during negotiation. If you have to find a new job because your former employer just went out of business, you lose the luxury of taking your time, of being choosey.
But what if people took a proactive approach instead?
Test-Drive Different Jobs
“I like the idea of practicing the job search process,” Pete said. “Even if you have a great position, you can get a lot out of applying for other jobs.”
“I have a friend back in Portland who does just that,” I said. “He has a high-paying job that he loves, but that doesn't stop him from applying for other opportunities. He watches the want ads for promising positions. When he sees one, he submits an application. If he gets an interview, he takes time off work. He's not seriously looking to change companies. He's simply trying to stay sharp.”
At the same time, this habit allows my friend to keep up with what's happening in his field, build a network of contacts, and gain leverage for salary negotiations. When his “practice” applications yield job offers, he can choose to take the new position or use the info to ask for a raise from his current employer.
There are other ways to use the concept of “practice” to take control of your career.
For instance, you might conduct informational interviews to explore other opportunities. My friend Michael is a career counselor, and he calls the informational interview “the job-hunter's secret weapon”. Few workers ask for them. Those that do tend to jump-start there careers. (Never use an informational interview to ask for a job; use it instead to learn about other companies and careers, or to pick the brains of experts in related fields.)
Aside: I've never conducted a formal informational interview myself, but I've done something similar in a casual way. Back when I ran Get Rich Slowly, I'd sometimes get interviewed by reporters from major outlets, such as The New York Times. All my life, I'd wanted to be a reporter, so after the interviews were over, I'd make sure to ask the reporters about their jobs. I'm glad I did. Without fail, they'd tell me that I did not want to be doing what they were doing. In fact, they said, most reporters wished that they were in my shoes…
Here's another example of how certain people might test-drive different jobs:
When we paused our RV trip last autumn to spend six months in Savannah, Georgia, Kim decided she wanted to earn some money. But she also wanted to keep her schedule open in case we decided to explore the South.
Instead of applying for full-time dental hygienist positions, she scoured Savannah, dropping her résumé at as many dental offices as possible. She told employers she was looking to do part-time fill-in work. It didn't take long for people to ask her to cover for sick days and family emergencies. During our six months in Georgia, she had as much work as she wanted. (And she still gets calls from people asking her to fill in.)
When we get home to Portland next month, Kim intends to take the same approach there. She'll look for part-time fill-in work at local dental practices. Doing so will allow her to “test-drive” different offices, checking whether the situation is a good fit for her and the employer. Perhaps, if she finds the right place, she'll eventually accept a full-time permanent position.
This is a great example of the Money Boss philosophy in action. Under the traditional employment model, the employer holds most of the power. He gets to test-drive the employee. Kim has flipped this model on its head. She's the one with the power, test-driving the employer. She basically created a new job for herself: she's a substitute dental hygienist.
Practice Home Buying and Car Shopping
This concept can be applied to other aspects of your financial life. Pete and his wife used it to find their current home, for instance.
“We already owned a place here in Longmont,” he told me. “We liked it. We didn't need to move. But I kept my eye on the local housing market. What if I could find someplace better? Someplace more bike-able? When our current home came on the market, we made an offer. It didn't matter whether or not the offer was accepted because we already had a fancy place to live. We weren't under any pressure. But our offer was accepted, and now we own a better home in a better location.”
“Do you think this is something other people should do?” I asked.
“Absolutely,” he said. “I think it's a great idea. Don't wait until you have to change homes. Keep an eye out for places closer to where you work. Can you move and ditch your car? Can you downsize your home so that you don't need to own so much Stuff?”
I think this ia a smart approach. Stay satisfied with your current spot, but maybe take one Saturday afternoon every six months to practice the home-buying (or apartment hunting) experience. Browse Craigslist to see what's available. Attend open houses. Visit other neighborhoods. You'll stay informed on current market conditions and get a good feel for the types of homes available in your area.
You can do the same thing with cars. You don't have to wait for your current vehicle to give up the ghost before you start shopping around. Every once in a while, drop by a car dealership to see what's available. Take a test-drive, even if you don't plan to purchase. Even practice negotiating with the slick car salesman!
A Word of Warning
One danger with these exercises is that you could become dissatisfied with your current situation, with your current job or automobile or home. That's not the purpose of this sort of practice. Your goals are to stay informed, to develop the skills you'll need when you do have to make a big move, and — maybe — to gradually build a better life.
Have you ever done this sort of thing in the past? Have you practiced applying for other jobs, even though you're content with your current career? Do you keep up-to-date with the homes for sale (or apartments for rent) in your city? Do you browse used car lots just for fun? Are there other ways people could apply the concept of “practicing” big money moves?