Good question. I've done this a couple of times. Self-study can be incredibly useful. Being able to do it within the "distraction" of a full time job can also be extremely rewarding.
I have a very conservative financial point of view in that if I got fired tomorrow I would want to be fine for the next year without working.
This has in the past allowed me to work on my own stuff a couple of times without much worry (although in Australia, lack of health insurance isn't the issue it is in the US).
It's very easy to get distracted and not finish things (at least for me) without the external pressure of someone pushing you to finish. YMMV.
As far as "not earning" goes, these periods of self-improvement are pretty much directly responsible for me getting the great job I have now (at Google) so I'd say it was a worthwhile investment.
Pick something you want to learn. Don't be directionless and say "self-improvement" is your goal. As long as you can reasonably afford to do it.
"(although in Australia, lack of health insurance isn't the issue it is in the US)"
OT: When are we here in the US going to start listening to these comments, and fix it?
Job mobility is a great feature of an economy. When, because of health or mortgage or whatever, you can't move your brain from one job that isn't the best one for your brain or that job, to a job that is much better for your brain and that new job, that's a loss to the economy. Multiply that by however many and it's a handicap to the economy.
In the US if you quit your job you can buy the same health insurance plan you had, for up to 18 months ("COBRA"). It's not going to be the cheapest thing in the world, but if you're talking about taking a year off, you're probably not on the verge of going broke. (It looks like it'd be far less than what I pay for rent, for example.)
Another option could be to take a part-time job. A fair number of stores seem to offer health insurance for any employee working 20 hours a week. Of course, that may or may not be compatible with one's idea of a "break".
When I quit my job last year to join a start-up the cost to continue my COBRA benefits would have been $700/month (and I'm a healthy guy in my 20s). Fortunately, I'm in MA with its private health insurance market, and I was able to find a plan for $200/month. I still had to go without health insurance at all for a month, though, to make myself become inelegible for COBRA and therefore eligible for the other plan.
"Not the cheapest thing in the world" is quite an understatement.
From what I'd found (also for a young single person), it would have been more like $500/month, but even at $700, that's still cheaper than rent at any apartment I've seen since I was a college student.
And remember the context: this is someone who wants to take a year off with no work at all, and so is voluntarily giving up tens of thousands of dollars, in exchange for his own time. Yes, there are almost certainly cheaper health insurance options, depending on how much effort you want to put into the research, but COBRA is the upper bound, and takes practically no time to sign up for, which, again, was the whole point of the exercise.
Have you checked these claims in the "real world"?
Costs have been rising substantially each and every year. The number of employers willing to give even full time employees insurance has been shrinking and the cost of your employer's health insurance plan willing be quite high considering you don't have your employers tax incentives.
It's not hard to find names of employers who offer healthcare even for half-time workers, using any "search engine". I'm sure there are also companies who are dropping their health insurance plans, but that doesn't mean that all companies are.
I agree, pick something you want to learn. I took about 6 months off. The first 2 I relaxed and didn't do much. Then, I bought a nice DSLR and got into photography. I would spend my days reading photography books, blogs, etc and my nights going out taking night photos of New York (http://www.flickr.com/photos/blakeperdue/sets/72157625542951...)
It was awesome to be able to have time to dive into a hobby and really soak it all in. I developed some great skills that will be useful to me for the rest of my life. It was also during this time that I realized what I wanted to do next.
lack of health insurance isn't the issue it is in the US
Here's what I've found about health insurance in the US:
1) It's not terribly difficult or expensive to get, at least, emergency coverage. In my 30s and single, I've found interesting plans for around $150 per month which cover simple doctor's visits a few times per year, with around a $10k deductible for 'real' stuff. This is very doable with reasonable financial padding. ehealthinsurance.com is the site I've used every time I've been unemployed over the last decade.
2) The whole thing about guaranteed acceptance with continuous coverage only applies when you are coming off of "group coverage" (i.e. through an employer or some industry associations, I think). Bizarrely, having maintained continuous coverage on my own now for three years means absolutely nothing if I want to change from a personal plan to a new personal plan. I was rejected out of hand for a neck injury I had over three years ago, and I'm effectively uninsurable in this state (Oregon) for another seven years!
It is not much really! In 2002, I had to have surgery to have 2 teeth removed which were growing through the roof of my mouth and 4 others removed due to my jaw being too small. It required a general anaesthetic and a day in general surgery at my local hospital, two aftercare visits and one consultant appointment. It only cost me £15 (the lower rate at the time) as it was a referral to a hospital orthadontist. That was it!
You can get GOOD glasses for £30 or WONDERFUL ones for £70 on the high street now in the UK without NHS intervention. You usually get 2 pairs for that. That includes the sight test and consultation. You can also get FREE sight tests and vouchers from your employer.
You're right. I'm gravely pessimistic about the UK in many areas but healthcare is an area I'm really happy with. Due to shortages at the time, I'm "private" for dentistry, and even private prices aren't onerous compared to those in the Americas.
I've paid £30 for a checkup, £400 for a root canal and crown, and £40 for an extraction before. Fillings are between £50-£150 depending on complexity. And then I hear of insured Americans who've paid $300+ for an extraction AFTER their insurance company paid the majority of the bill! :-)
We certainly have it good here. Unless you have cancer and want to get a radical new treatment, of course..
Under 18s do, and students can claim back the costs (At least for the dental, I'm not 100% on the glasses).
Adults don't get those 2 for free though, same as you.
I think the idea of taking the break to learn is a great one, but only if you have the purpose for it already decided. There is an endless amount of fascinating content on all sorts of topics available, but if I were to take a break to really brush up on a particular area, I'd want to know that when I was done, I'd be in a better position (For a particular job I want, startup idea to tackle etc.)
If it's more general though, I think it's harder to justify (of course, learning while building a personal project is a different scenario altogether!)
There's some big problems with individual high-limit coverage:
(1) $10K is a big deductible if anything actually happens; if there's anything serious, you should assume you'll hit the $10k.
(2) Some of the better medical offices (eg my orthopaedic surgeon) are pretty picky about what brand of insurance they take because what the insurance pays for, how much they pay, how quickly, and with how much hassle vary quite widely. My point is, insurance is not all the same. You may find the better doctors unwilling to see you depending on the brand of insurance you have.
(3) If you do something like, for example, breaking your ankle, you'll be shocked at how much stuff is not covered by insurance. So add 50% to your out of pocket estimates. This is for things like: parking at the ortho / physical therapist office ($5-$8 per visit; 30+ visits, $200), taxis to and from work since you can't take public transport ($34 / day, 6 months on crutches, $4k), drugs (typically separate from the insurance deductible for no reason but to screw more money out of you, $300), buying all OTC stuff you can get at any drug store which is therefore not covered (advil, ice packs, compression bandages, etc -- easily $200). Plus if you actually have a bad accident, you'll probably spend a couple thousand dollars on takeout, etc.
(4) deductibles reset on a calendar basis. I fortunately injured myself in march and had 8 months of treatment, with both surgeries covered in the same deductible year. If you were to hurt yourself in October, you could cross deductible years so double your out of pocket costs again.
(5) Also, you should be very careful about coverage restrictions and in/out of network bullshit. As I mentioned, I broke my ankle. When you have an injury like that, you don't want to go to a random orthopaedic surgeon. I was fortunate and Anthem Blue Cross covered UCSF so I could go to an ortho surgeon who only repairs ankles instead of a generic ortho surgeon. The difference is between someone who has treated my particular injury 600+ times vs someone who has done so a handful of times. Lots of research suggests that outcomes correlate with the amount of times your doctor has treated your injury.
My experience was a bit unusual because the recovery time -- 8 months -- was so protracted, but not unprecedented for joint injuries. Recommendation: don't break your ankle =P
tl:dr: in a worst case scenario, where you have a moderate to bad injury that spans a deductible year, your $10K can be $25K in practice. Make sure you have the cash.
All good points. To some extent you can work up to a $10k deductible using an HSA. First year, you elect a $4k deductible -- the premiums are more expensive but you have lower exposure. Drop the max into your HSA. If, at the end of the year, you've been healthy and haven't spent much out of the HSA, then change your insurance up to the next deductible level (e.g. $7500). Drop the max into your HSA. Assuming you stay healthy, your HSA accumulates a large balance and you can gradually lower your premiums. Keep in mind that you aren't required to spend from your HSA if you have expenses: if you can pay out of pocket for minor expenses, do it. This keeps your HSA balance up so you can afford the risk exposure of the higher deductible.
As a bonus, the HSA contributions are tax deductible and if you hit retirement age with a balance in the account, you can (more or less) treat it like your other retirement accounts.
I have a very conservative financial point of view in that if I got fired tomorrow I would want to be fine for the next year without working.
This has in the past allowed me to work on my own stuff a couple of times without much worry (although in Australia, lack of health insurance isn't the issue it is in the US).
It's very easy to get distracted and not finish things (at least for me) without the external pressure of someone pushing you to finish. YMMV.
As far as "not earning" goes, these periods of self-improvement are pretty much directly responsible for me getting the great job I have now (at Google) so I'd say it was a worthwhile investment.
Pick something you want to learn. Don't be directionless and say "self-improvement" is your goal. As long as you can reasonably afford to do it.