How to Take Major Life Risks After Having Children – Karan Bajaj, PGP 2002

We got to know of our second pregnancy the same week I decided to turn full-time novelist in 2015.

I questioned my decision for the hundredth time. 

Should I stay in my corporate job longer to cover health-care expenses? Who pursues artistic dreams when they’re pushing 40 with two kids under two years old? 

My wife and I took the plunge, but with many fears. We’d taken detours before, but never after having children.

Five years later, we were at the crossroads again, now deciding whether to start a company with two kids entering the formal (and expensive!) school system for the first time.

This time, we were certain about jumping in though! 

We were guided by the following mental models we’d developed on taking major life risks after having children. I hope these are useful for those looking to carve new paths at any age. And whose hearts don’t agree when well-meaning friends and family tell them to “settle down” or “be practical”!

1. The Book Study Rule or Always Ask What You’d Want Your Kids to Do

My father did yoga daily in our living room when I was growing up.

He never taught me yoga and I never expressed any interest in it.

Yet, thirty years later, I do yoga daily in my house.

Your children learn from your values, your beliefs, your daily decisions and actions. They’ll do What You Do versus What You Say.

I solidified this intuitive view after reading the Book Study Research,  (Johanna Sikora, ANU). The number of books in your house has the highest correlation with your kids being readers, whether you tell your kids to read or not.

In other words, your kids will likely be readers if you read a lot.

So each time, we were at a crossroads, my wife and I asked ourselves one question:

What decision would we want our kids to take in this situation when they grow up?

We too have to make that decision.

Our choices now will be their life models tomorrow.

Would I want my daughters to start a tech company if they thought they’d learn and grow the most in doing so? Then, I have to overcome my fear and do it. Else my actions will tell them that stasis trumps growth. 

If I told my daughters they could be President of a country if they set their heart to it, then I couldn’t model the exact opposite behavior by choosing safety over heart and decide not to become a full-time writer.

Did we want our children to take their chances at being pioneers and risk-takers? 

Then our best chance was to model these behaviors on our own!

2. The Salary/$20,000 Rule to Know Your Risk Timeline

I came back from my first travel sabbatical the day Lehman Brothers collapsed in 2008. The job market dried up. My savings were gone from my travels. At 30, I was unemployed in the middle of a sudden recession, the worst-case scenario I’d envisioned when I’d taken my first major risk hesitatingly. 

Later, I recovered and didn’t regret the chance as much as my lack of frameworks for having taken the chance.

For all future plunges, I used the Salary Divided by $20,000 Rule  (First Transitions Study: 2005) or  (Your Salary in USD)/($20,000) is the number of months you need to find a job. 

You can calculate your risk tolerance mathematically. First, calculate how long your savings will last, based on your Total Liquid Savings and All-In monthly expenses. Then, subtract the number of months you’ll have to look for a job based on the (Salary/$20,000) rule.

Months to Pursue Your Interest Uninhibitedly= (Liquid Savings/Monthly Expenses)-(Salary/$20,000).

In India, I changed it to the (Salary/Rs 14 lakh) rule¹, which guided me equally well for taking risks when I moved to India.

So, if you have Rs 80 lakhs of liquid savings in cash, stock, basically anything that can be converted into cash easily, not fixed assets like houses or land. And Rs 5 lakhs as all-in monthly expenses, then you have a 80/5=16 Month savings buffer. Now, if your salary was Rs 1 cr, then it would take (1 cr/14 lakhs)=7.1 months to find a job. So 16-7.1=8 full months is the time you have to uninhibitedly pursue your dream without fear or regret.

Later, when we had kids, I changed the rule to $10,000 or 7-lakh rule to give myself more cover and double the time to look for a job. Just in case I experienced the worst case of global recessions and 150-year-old institutions crashing again, like I had the first time!

Do you have enough months to pursue your interest based on the calculator above? Then, go all out for it, you’ll never regret it! 

I’ve used this rule to guide me multiple times and each time, I’ve found a job in lesser time than the calculations indicated. For example, I got the Discovery Head role after two months of ending my full-time writing career, despite budgeting much longer. 

Your extraordinary growth in pursuing your living, breathing interest full-time just shows in who you become at the end of this period, even if the risk doesn’t work out.

And the job market is quick to realize that.

¹Straight Dollar conversion from $20,000, triangulated with anecdotal evidence. Please drop a note in the comments if you have access to better research for India so I can update the blog!

3. Time Expansion Rule or Time Expands to Fill Your 10x Goal

Will a startup take over your whole life?

Yes. And then, some more!

I had all of 30 minutes each morning with my daughters before work and a few hours every weekend, when I ran WhiteHat Jr, since I’d never be able to see them at night. 

So I made it count.

We read books or practiced the Hindi alphabet or Maths problems in a fun way, and I held on to this 30-minute routine tightly, giving them my full, undivided attention each day, each week, for years, without a break. 

And my relationship with my daughters remained strong.

I was so protective of this time that often I would sleep in a hotel, next to the office, one day a week, so I could have more energy for them in the mornings after a full night’s sleep.

WhiteHat Jr was my life. But I fit everything important in it.

Now, post-startup, I have more time with my kids. But the daily life-or-death urgency of a 10x goal makes you come alive in every part of your fibre, making all senses alert, every moment deep. I think my kids probably valued the short but intensely dedicated time in the startup phase as much or more than the more spacious time now.

Do you worry about your 10x goal taking time from your kids?

Don’t! Your routine will expand around your 10x goal, making way for everything important in it.

With the models above, my wife and I took much bigger risks with our life after having children than we did before. Earlier we were calculating if the risk would pay off for us or not. Now, we had a different, deeper question:

What decision would we want our kids to make?

And mostly, our answer was for them to take the plunge.

So we modeled it for them.