I hate my teaching job but my parents say it’s best. Should I quit and do business full-time?

My name is Zack. I am a newly employed teacher in Junior Secondary School earning Sh35,000. Before this employment, I was earning around Sh40,000 net from my business but currently, since I’m unavailable full time, this has gone down to around Sh25,000. I really don’t enjoy teaching, unlike sales. I am considering resigning but my fear is what will happen should the business fail? Please advise me on the best thing to do since my business requires so much capital boost. My parents have insisted on employment but I don’t have a passion for it at all. Should I quit?

Alex Kibebe is the founder of Rubiani Wealth Management Ltd and an investment consultant and business development coach.

From what you have shared, it is clear that you enjoy and are passionate about your business and would prefer to quit your job. However, you have genuine concerns about the stability of the business and whether it can assure you sufficient income going into the future. This is possibly the same issue that your parents have and thus their advice for you to keep your job.

In order for you to have a fallback in case your business fails, I would advise you to build passive income before stepping out into a full-time business. For you to do this, you first need to determine the minimum amount of money you need to cover your basic expenses. Such expenses include rent, food and basic upkeep and if you have children, school fees.

You then need to build a passive income to cover these basic expenses. There are various ways that you can build passive income. They include building or buying rental property or investing in treasury bonds, a SACCO and a Money Market Fund.

To help you better understand how you can achieve this, we will explore a situation where your basic expenses totals Sh12,500 and you are able to save the Sh25,000 from your business profit plus an extra Sh10,000 from your salary. We will also assume that you can keep your business running with a reduced profit of Sh25,000 a month.

 In this case, I would advise you to put your Sh35,000 savings in a Money Market fund account. If you do so, you will have a total of about Sh436,000 at the end of the year. If you invest this money in a Treasury Bond at the prevailing interest rate of 14 percent, you would generate a passive income of Sh61,040 per year or Sh5,086 per month.

If you keep saving up the Sh35,000 and also invested the interest you earn from the Treasury Bond in your Money Market fund account, you will have a fund of Sh497,000 in your account at the end of this second year. If you again invested this money in a Treasury Bond at the same interest rate, your passive income would grow by Sh5,798 to Sh10,884. If you keep saving up for another eight months and invest in a Treasury Bond, you should have a passive income of about Sh15,000 which will be enough to cover your expenses.

 Once you have raised enough passive income, you will be ready to quit your job and work full-time on your business with no fears of financial distress if your business failed. Keep building your passive income and diversifying your investments so as to build wealth and ensure that you always have a financial buffer to cover you as your expenses grow. Over this time, you will also be better placed to determine the pros and cons of your teaching career and whether to quit or use it as one of your sources of income and funding.

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