June 21, 2016

Sabbatical Planning – How can advisors help their clients with this New Age Goal?

Prasad Chitre
Chief Financial Life Planner at Clover Solutions

Origin of Sabbatical

Sabbaticals have a long history. In biblical times, sabbatical years occurred every seventh year. For that whole year there was no cultivation, people and fields rested and rejuvenated.

Part of the reason that sabbaticals have such an enduring appeal is that they offer people a chance to be themselves rather than their work roles (e.g. a doctor or a lawyer). This stepping outside one of our most insidious false identifications (the mistaken belief that I am my job) gives access to immense personal freedom and spiritual renewal.

So, what are Sabbaticals?

Sabbaticals are planned, strategic job pauses that allow you to – travel, do research, volunteer, learn a new skill, or fulfil a lifelong dream.

Sabbatical is an opportunity for intentional reflection, professional development, personal growth, transformative insights, and renewed passion. Sabbatical starts from 7 days to lifetime.

Globally sabbaticals are paid. In India sabbaticals are self-funded.

Types of Sabbaticals

Below given types are just broad pointers to various reasons for planning a sabbatical. There can be more reasons for Sabbatical planning. One point noteworthy is that, every person requires a break from his routine after a certain tenure to rejuvenate and re-energise oneself. It empowers the person to look at life from a different perspective. Hence to conclude “Sabbatical Planning” is for everyone.

Travel Sabbatical

See the world, or just part of it. Experiencing another culture never fails to provide a new perspective on what we have at home.
Green Sabbatical
Companies interested in social responsibility can give employees time out to help with a clean-up project, further a renewable energy effort, or do field research. Whether tagging sea turtles or working with an approved environmental group, the individual learns how to help the earth and his or her company reaps the benefits of supporting “green” causes.
Volunteer Sabbatical
This program gives employees an opportunity to donate time to a charity cause, in which, they themselves and their companies believe in, such as Habitat for Humanity, education to orphanages and so on. The possibilities are endless and endlessly rewarding.
Innovation Sabbatical
This program stimulates fresh thinking by giving employees the opportunity to experience a different work culture, inside or outside their own industry. Upon their return, the insight they gained while “out of the box” fuels their creative juices and provides fresh inspiration for their co-workers as well.
Family Sabbatical
Many companies give employees the opportunity to spend time with their kids or take a trip with an ageing parent. Providing a solid block of quality time with family members helps these people balance their priorities and gain perspective and renewed energy for their workplace objectives.
Learning Sabbatical
Educational sabbaticals enable employees to finish an MBA, become fluent in a second language, earn certification in a software program and more.
Research Sabbatical
These programs enable employees to take time out to develop a new product or business process, or work on a project, book or theory.
Lifelong Goal Sabbatical
This program allows employees to re-energize themselves by chasing a lifelong dream such as acting in a theatre production, competing in a triathlon, or hiking Mt. Everest. Going after an audacious goal – and conquering it – can create powerful momentum for the individual and the company that fosters that achievement.
Personal Growth Sabbatical

This time out for self-reflection can take the form of a silent meditation retreat, reading a stack of self-help books, or even filling up a journal with reflections, hopes, and plans. However, it is done, individuals return with a personal clarity that might not have been possible otherwise.

Mom Sabbatical

Post Delivery, new mothers like sabbatical ranging from 1 year to 5 years, out of which 3 years are for child care and the next 2 years are to upgrade themselves in their career.
Executive MBA Sabbatical

Youngsters who start working immediately after completing their graduation/post-graduation, tend to opt for Executive MBA with minimum 2 years of experience.

In both the above cases, the fixed expenses need to be taken care of. Financial Planners should plan the cash flow required for these fixed costs, which won’t hamper their living pattern for the stipulated time frame.

Benefits to Individual Sabbatical-Goers

Self-Awareness – When you step out of your comfort zone, you tend to learn a lot about yourself. Self-awareness is a critical key to leadership and career success.

Replenished Energy – In the same way that interval training or days off boost performance in athletes, sabbaticals give you time to re-fuel and re-fill the well.Renewed Commitment – Time after time, executives who have experienced sabbaticals report renewed loyalty to their companies. Even the ones who admit to “considering career alternatives” prior to going on sabbatical most often return to work with an improved perspective and gratitude for their current job.

A Surge of Creativity – You are capable of powerful creative thinking when you get outside your box and engage in a new world.

The Ability to Inspire – When you achieve personal goals and understand your own dreams, you are more likely to inspire those around you.

Increased Confidence – Everyone says it because it’s true. Well-executed sabbaticals help you develop confidence.

Role of a Financial Planner in Sabbatical Planning

To look at Sabbatical Planning from a Financial Planning perspective, it is a goal in a person’s life to be included in the Financial Planning process.

We at Clover Solutions, use Life Planning approach to plan sabbaticals. People often approach us for investments, but when we dig into their mind, we identify that there are some future goals that need to be planned for and that further turns out to be Sabbatical planning.

In the past 10 years the employment environment has changed. Job turnover has increased and employers no longer assume the same levels of responsibility for their employees.

In the 21st century, the sabbatical is increasingly being funded from the employees’ savings rather than being paid for by their employer. Whether you intend to return to a similar job, or do something completely different, it is worth planning carefully what you will do during your time away. Plan ahead. Time will fly.

Case Studies of Clover Solutions

Case Study I – Travel Sabbatical
One of our clients, Ram Sharma (name changed for confidentiality), had a dream of travelling with his entire family to the Seven Wonders of the World and that too not the recent ones, but he had a combination list made for himself from the recent and previous Seven Wonders. Now, it was not just planning a trip, but there were some constraints:
  1. He wanted to travel within next 5 years
  2. His wife was asthmatic, hence allergic to sudden changes in climatic conditions
  3. He wanted to take his aged parents for the vacation, where his mother had an ailing knee
  4. He also wanted to take care of his children’s milestone years, where they would be appearing for Secondary and Higher Secondary examinations
  5. He also had his own business to take care of

Hence as Financial Planners, it was not just planning finances, but taking care of lot many factors like health of family members, the peak and restricted seasons for travelling to a specific place, the years when the children could not travel due to studies to name a few.

It was quite challenging, but we successfully planned this vacation. Some of the solutions we offered were as follows:

  1. We planned this vacation in a stretch of 8 years considering the known factors and some more constraints that creeped in during the planning stage. Eg1: His mother’s knee replacement surgery had to be planned, so the entire year was dedicated to post -operative care. Eg2: His father’s 70th birthday was celebrated with much fervour where the finances went on a toss. Eg3: Son’s 4th standard scholarship exam year had to be skipped
  2. We planned the season of travel considering his wife’s health condition, when the weather will not change much, so that the change of weather will not impact her health. But doing so, we had sacrifice on the discounts we would get travelling in a off season. But that was affordable and agreeable to the client
  3. We had planned the travel post the operation of his mother, so that the ailing knee should not be an obstacle in enjoying the vacation
  4. We did enough of Contingency planning to take care of the fixed expenses, when he was away from his work
  5. We ensured that Mediclaim of the family (excluding his wife as she was undergoing a treatment) and his parents was adequate to take care of any unforeseen health hazards
  6. We also had to plan for a certain amount for his wife for medical purposes in lieu of the mediclaim.
Case Study II – Hobby Sabbatical
We have one of our client, who is a cycle enthusiast. He had a passion for cycles and wanted to participate in a very famous cycle event of UK – a 1400 km ride in almost 12 days. This comes to 120 km per day. This is called a Hobby Sabbatical. The period of this sabbatical was just a month, but the planning period was 3 years.Constraints:
  1. The client was overweight by almost 30 kgs
  2. He had to purchase a new bike costing approx.. Rs. 8 lakhs for practice
  3. He had to be physically fit and had to take a fitness training for almost 10-12 months
Solutions offered on doctor’s recommendation:
  1. The client took 2 years of time to achieve the weight and health target, so the trip was planned after 2 years
  2. We planned for his finances for his fixed expenses like office rent, salary to staff, electricity bill and office maintenance for the period of fitness training and the race
  3. We planned for the finances to import the bike to India. The costing of the bike increased by INR 150,000 as the import duty on bikes increased during that year and the latest model was launched in the same year which was lighter than the earlier model.

Note by Network FP Editor

Sabbaticals are being increasingly sought after by the new generation due their hectic work life, higher aspirations and an attitude to achieve/do more in life. However they are caught up in the corporate rat race, tied up with EMIs and then the family responsibilities. It becomes financial life planners’ responsibility to dig out and understand the real aspirations of clients and help them live a meaningful and fuller life by helping them plan and do what they really want to do. Do share the concept of Sabbatical Planning with your clients and next time when you catch up with them… check if something like this is on their mind


Authored by,

Prasad Chitre

Chief Financial Life Planner
Clover Solutions

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