Author Topic: Amazing Job Opportunity... with a paycut?  (Read 1273 times)

cheepiling

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Amazing Job Opportunity... with a paycut?
« on: September 13, 2018, 09:46:31 PM »
Need some Mustachian perspective!

I'm a physical therapist currently working in a regular clinic with 40-50hr work weeks. I just got offered a position to be the head PT of a performance team going to the Olympics. This would mean only training about 20 clients, a lot of international travel, a lot of meeting new people/places--it's an awesome opportunity. The big HOWEVER is that while I'm making about 85k/year with benefits at my current job, this new one is offering me 75k as an independent contractor with no benefits.

1. How do I figure out exactly how much of a hit I'm taking financially? Since I'd have to pay for health insurance out of pocket.
2. Is it worth the paycut considering that I'm currently aggressively paying down my student loan balance. (230k)

Any input would be helpful! They're asking for an answer in 48 hrs....

AccidentialMustache

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Re: Amazing Job Opportunity... with a paycut?
« Reply #1 on: September 13, 2018, 10:39:27 PM »
This could only possibly be a good move where you can leverage the experience to much higher pay in the future. Unless you see a way to do that (athletes: win gold and get on a cereal box. non-athletes: ???), I don't see a win for you here.

If insurance is only 10k a month, you're looking at a 20 grand pay cut. Plus you'll spend more if you're traveling -- either to go see things, to see nearby things (if this is 2020 Tokyo, would you go travel to S Korea? China? Others?), to do other touristy stuff. There's also the consideration if the insurance will even cover you if you're overseas that much.

letired

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Re: Amazing Job Opportunity... with a paycut?
« Reply #2 on: September 13, 2018, 10:45:16 PM »
I can't speak to if it's worth it, but in addition to health insurance:

- you have to pay both 'halves' of payroll taxes, so that's another chunk
- if you have a retirement contribution match now, that's gone
- other benefits like disability or life insurance are gone
- I have no idea what equipment is required to be an independent contractor PT means, but you may be responsible for some amount of 'business expenses'. In office-y jobs, this is stuff like computers, office supplies, etc.
- hopefully they're covering all the travel????

Does this 'awesome opportunity' tick other boxes? It sounds like you're excited for the travel, etc. Does having this on your resume increase your future employability or other skill sets? Does it give you time or opportunity to do some sort of side hustle to make up the lost income? Network like a boss and get other sweet well-paying gigs elsewhere?

cheepiling

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Re: Amazing Job Opportunity... with a paycut?
« Reply #3 on: September 13, 2018, 10:55:34 PM »
Thanks for the input!

At 20k+/year less income, it becomes less and less appealing. I'm also living in a HCOL area-- Los Angeles, so that financial hit really hurts.

There would be a ton of networking involved and the hope to leverage this into something higher paying in the future. I'm worried about the trajectory of my income if I end up losing 20k/year for the next couple years. Paying off my student debt is going to stall out which is already a huge financial burden.

Safety vs uncertainty... =/

letired

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Re: Amazing Job Opportunity... with a paycut?
« Reply #4 on: September 13, 2018, 10:59:56 PM »
For perspective, something I've started doing is looking at what other people in a given job/company/position/whatever have done after the one I'm considering. Did they do something else I think is interesting? Or are they off in a direction I have no interest in. I think it can help to gauge how realistic some hopes or expectations are.

Linda_Norway

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Re: Amazing Job Opportunity... with a paycut?
« Reply #5 on: September 14, 2018, 07:23:05 AM »
Will you be travelling so much that you can rent out your house?

Can you negotiate with the position to get health insurance or higher pay?

OtherJen

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Re: Amazing Job Opportunity... with a paycut?
« Reply #6 on: September 14, 2018, 07:31:08 AM »
I can't speak to if it's worth it, but in addition to health insurance:

- you have to pay both 'halves' of payroll taxes, so that's another chunk
- if you have a retirement contribution match now, that's gone
- other benefits like disability or life insurance are gone
- I have no idea what equipment is required to be an independent contractor PT means, but you may be responsible for some amount of 'business expenses'. In office-y jobs, this is stuff like computers, office supplies, etc.
- hopefully they're covering all the travel????

Does this 'awesome opportunity' tick other boxes? It sounds like you're excited for the travel, etc. Does having this on your resume increase your future employability or other skill sets? Does it give you time or opportunity to do some sort of side hustle to make up the lost income? Network like a boss and get other sweet well-paying gigs elsewhere?

All of this. Youíll need to file quarterly estimated taxes to both the IRS and the state. Your IRS taxes will be roughly what youíre paying now, plus an extra 7.65% to cover the employerís share of FICA. If youíre currently tax sheltering a portion of your income in your employerís 401k program, you will lose that shelter and need to pay full taxes on that income as well (look into SEP-IRA, etc. here).

Iím an independent contractor myself so Iím not saying absolutely donít do this, but make sure you know all of the details before making a decision either way.

MDfive21

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Re: Amazing Job Opportunity... with a paycut?
« Reply #7 on: September 14, 2018, 10:40:34 AM »
even despite the pay cut, this is the kind of thing i would regret not doing later on if i didn't jump on the opportunity.  they're not just offering you a spot on the team, you'll be the head of PT.  that surely looks good on a resume, plus you'll be among the best athletes and presumably the best coaches, both of which can refer you to organizations post-olympics.

take the cut and enjoy the adventure.

Apocalyptica602

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Re: Amazing Job Opportunity... with a paycut?
« Reply #8 on: September 14, 2018, 10:54:17 AM »
This is exactly what MMM affords you the ability to do. If you were a typical consumer sukka you wouldn't be able to afford a pay cut like that and you'd be forced to let this opportunity pass you by.

I'd go for it.

mm1970

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Re: Amazing Job Opportunity... with a paycut?
« Reply #9 on: September 14, 2018, 01:25:25 PM »
Thanks for the input!

At 20k+/year less income, it becomes less and less appealing. I'm also living in a HCOL area-- Los Angeles, so that financial hit really hurts.

There would be a ton of networking involved and the hope to leverage this into something higher paying in the future. I'm worried about the trajectory of my income if I end up losing 20k/year for the next couple years. Paying off my student debt is going to stall out which is already a huge financial burden.

Safety vs uncertainty... =/

Is there any opportunity to do this part time?

My neighbor has done this (been part of the medical team for an Olympic sport/ event - at least twice, maybe 3 times?  Summer olympics - Beijing, Rio at least.)  I've heard many a wonderful thing about it.  But - he's nearing retirement (now) and is a small business owner / sole proprietor.  So he was able to reschedule his clients and go when he wanted to.  He wasn't giving up his entire livelihood for it  - and I don't think it paid as well as being a chiro.

patchyfacialhair

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Re: Amazing Job Opportunity... with a paycut?
« Reply #10 on: September 14, 2018, 01:40:54 PM »
You may want to ping @economista . She coaches (has coached?) at a high level in her sport and could maybe offer insight into what it's like working for a team like that, though not on the physical therapist side.

erutio

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Re: Amazing Job Opportunity... with a paycut?
« Reply #11 on: September 14, 2018, 02:05:40 PM »
This is exactly what MMM affords you the ability to do. If you were a typical consumer sukka you wouldn't be able to afford a pay cut like that and you'd be forced to let this opportunity pass you by.

I'd go for it.

This is really good advice.

economista

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Re: Amazing Job Opportunity... with a paycut?
« Reply #12 on: September 14, 2018, 02:58:47 PM »
Hi! PFH is correct and I have a little experience with this. First, congrats on getting an offer from a sport in Team USA that will actually pay you a salary. In my sport the trainers tend to get their expenses reimbursed, but they don't actually earn anything so they are all either independently wealthy/retired or they work a full time job in addition to being on the training staff.

My advice would be not to make the decision based upon the idea that you will get to see the world. The athletes, coaches, and training staff rack up a lot of miles, see a lot of airports, and get their passports stamped but they don't really get to see the places they visit. My husband just finished his 2nd Olympic run and was an alternate for both London in 2012 and Rio in 2016 but he didn't really get to see the world. He flew around the world multiple times, but he complains that he never got to experience it. He has been to Germany 4x, Turkey 2x, Brazil 3x, Canada 2x, Hungary 2x, Japan, China, Korea, England 2x, and a few more that I can't remember right now, but he says he doesn't feel like he actually visited those places. He just visited a bunch of gymnasiums around the world, and the big difference was that each one had different toilet facilities :D

That being said - if you can financially take the pay cut, having the work experience of being the head of sports med for one of the teams would be great for your resume in the future. One of our team's trainers has his own sports med clinic and I think part of its success is that he is constantly talking about the athletes he has worked with. The walls of the clinic are covered with signed posters and pictures with the big name athletes he has worked with through Team USA.

MrsWolfeRN

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Re: Amazing Job Opportunity... with a paycut?
« Reply #13 on: September 14, 2018, 04:16:00 PM »
Can you ask your employer for a leave of absence with continued health coverage? What looks good on your resume is good PR for them too.

cheepiling

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Re: Amazing Job Opportunity... with a paycut?
« Reply #14 on: September 15, 2018, 09:11:17 AM »
Hi! PFH is correct and I have a little experience with this. First, congrats on getting an offer from a sport in Team USA that will actually pay you a salary. In my sport the trainers tend to get their expenses reimbursed, but they don't actually earn anything so they are all either independently wealthy/retired or they work a full time job in addition to being on the training staff.

My advice would be not to make the decision based upon the idea that you will get to see the world. The athletes, coaches, and training staff rack up a lot of miles, see a lot of airports, and get their passports stamped but they don't really get to see the places they visit. My husband just finished his 2nd Olympic run and was an alternate for both London in 2012 and Rio in 2016 but he didn't really get to see the world. He flew around the world multiple times, but he complains that he never got to experience it. He has been to Germany 4x, Turkey 2x, Brazil 3x, Canada 2x, Hungary 2x, Japan, China, Korea, England 2x, and a few more that I can't remember right now, but he says he doesn't feel like he actually visited those places. He just visited a bunch of gymnasiums around the world, and the big difference was that each one had different toilet facilities :D

That being said - if you can financially take the pay cut, having the work experience of being the head of sports med for one of the teams would be great for your resume in the future. One of our team's trainers has his own sports med clinic and I think part of its success is that he is constantly talking about the athletes he has worked with. The walls of the clinic are covered with signed posters and pictures with the big name athletes he has worked with through Team USA.

Thanks! Great insight. The sport is skateboarding so I'm wondering how it might be a bit different. But huge point taken that I probably won't be sitting on the beach in Australia while they compete. It would be a boost for my career and amazing work experience. I'm just not sure I can take the pay cut when I have hair on fire/shirt on fire/house on fire debt.

lhamo

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Re: Amazing Job Opportunity... with a paycut?
« Reply #15 on: September 15, 2018, 11:15:36 AM »
A friend of mine was the head of PT for the Welsh rugby team for several years.  It was a hard life, but it guaranteed that his private practice was a success once he stopped.  I'm not sure skateboarding would have the same cache, though -- rugby is like a religion in Wales....

Retire-Canada

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Re: Amazing Job Opportunity... with a paycut?
« Reply #16 on: September 15, 2018, 12:24:58 PM »

2. Is it worth the paycut considering that I'm currently aggressively paying down my student loan balance. (230k)

Any input would be helpful! They're asking for an answer in 48 hrs....

Sounds like a bad move. You have a MASSIVE debt that you need to pay down. This is not the time to take a big pay cut regardless of how appealing the work might be.

If you had no debt and were okay delaying retirement it's something you could consider, but at your debt level you are slave to your debt and need to free yourself as your #1 priority.

civil4life

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Re: Amazing Job Opportunity... with a paycut?
« Reply #17 on: September 17, 2018, 12:23:25 PM »
How long is the contract for?  If you love it hopefully you can renew the contract.  If you hate it, it is only a year.

I doubt it would hurt your future income, because of the prestige of the job.

Additionally, I imagine a lot of your costs will be able to be written off as work expenses. 

Financially it does not make the greatest sense, but I definitely see the once in a lifetime opportunity piece.

cheepiling

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Re: Amazing Job Opportunity... with a paycut?
« Reply #18 on: September 17, 2018, 10:39:57 PM »
Thanks everyone! I told them I was still considering it and asked some follow-up questions based on your suggestions:

1. How long is the contract?
2. Is there a bonus structure?
3. Is there any opportunity to do this part-time?

Point well-taken that I have a lot of debt to pay off, that's exactly why it's such a difficult decision.

WalkaboutStache

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Re: Amazing Job Opportunity... with a paycut?
« Reply #19 on: September 18, 2018, 12:07:06 AM »
Olympic job as a head of something.

High profile sport.

Sure, it will set you back somewhat initially, but all you need is for one of those athletes to hashtag you and say you did wonders when they hurt their whatevs and you are on the way to having your own clinic and living off the work of people who do what you do now because middle aged weekend warriors will be willing to pay through the nose for you to fix them.

I see this pay cut as a wise investment.

Malkynn

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Re: Amazing Job Opportunity... with a paycut?
« Reply #20 on: September 18, 2018, 05:58:02 AM »
There is absolutely 100% NO WAY that I would ever pass up this job if I were in your position.

For me, I would regret it if I didn't do it, but I care very much about enjoying my work, going on adventures, and don't really care about my financial timelines. Many people wouldn't be able to do this due to family/kids/etc, which means the only barrier standing in your way is if YOU think the cost is not proportional to the benefit, which is 100% determined by what YOU think. That's a great position to be in.

I too have massive debt and I've taken a nearly 100K pay cut so that I can fully enjoy my life *now* and be happy and fulfilled.
Only you know if this opportunity if worth it for you and if you will regret it if you don't do it. Fast forward 30 or 40 years and look back on your life and reflect on what you would regret more: significantly delaying your financial independence or missing out on this opportunity? There's no guarantee that you won't regret either decision. It's a huge opportunity, but that's also a HUGE amount of debt. I don't envy your decision.

There's no right answer, just the answer that is best for you. Most people here will prioritize the numbers, some of us will prioritize the adventure, it's up to you to figure out where your priorities are.

[Note: a few major factors that would affect my perspective on this dilemma: Do you have kids? Do you want kids? Is this a job that could be done in the future or is it a take it or lose it kind of opportunity? Do you love your work or are you dreaming of the freedom of retirement? Have you had a lot of opportunity to travel already? Is travel really important to you? Would you prefer work-travel or leisure travel?]
« Last Edit: September 18, 2018, 06:44:47 AM by Malkynn »

beer-man

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Re: Amazing Job Opportunity... with a paycut?
« Reply #21 on: September 18, 2018, 06:38:55 AM »
PT for the Olympics would look amazing on a resume for years to come. That alone would be a good reason to jump on it despite the temporary financial setback. The relationships and networking opportunities could launch your career further than you ever dreamed. Do it!


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Freedom2016

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Re: Amazing Job Opportunity... with a paycut?
« Reply #22 on: September 18, 2018, 07:21:16 AM »
There is absolutely 100% NO WAY that I would ever pass up this job if I were in your position.

For me, I would regret it if I didn't do it, but I care very much about enjoying my work, going on adventures, and don't really care about my financial timelines. Many people wouldn't be able to do this due to family/kids/etc, which means the only barrier standing in your way is if YOU think the cost is not proportional to the benefit, which is 100% determined by what YOU think. That's a great position to be in.

I too have massive debt and I've taken a nearly 100K pay cut so that I can fully enjoy my life *now* and be happy and fulfilled.
Only you know if this opportunity if worth it for you and if you will regret it if you don't do it. Fast forward 30 or 40 years and look back on your life and reflect on what you would regret more: significantly delaying your financial independence or missing out on this opportunity? There's no guarantee that you won't regret either decision. It's a huge opportunity, but that's also a HUGE amount of debt. I don't envy your decision.

There's no right answer, just the answer that is best for you. Most people here will prioritize the numbers, some of us will prioritize the adventure, it's up to you to figure out where your priorities are.

[Note: a few major factors that would affect my perspective on this dilemma: Do you have kids? Do you want kids? Is this a job that could be done in the future or is it a take it or lose it kind of opportunity? Do you love your work or are you dreaming of the freedom of retirement? Have you had a lot of opportunity to travel already? Is travel really important to you? Would you prefer work-travel or leisure travel?]

This whole thing, but especially the bolded part. And frankly I'm not sure I agree this would "significantly" affect your FI time horizon.

Life is about adventure - and this whole community is about getting clear on your priorities and making wide-eyed decisions. I took a huge pay cut years ago to work at a nonprofit doing very interesting international work. I had a "hair on fire" debt emergency at the time, too - student loans then CC debt. But with the non-profit I got to travel to Iran, twice, in a time when virtually no Americans ever went there. I have crazy stories of my experiences, I had a profoundly life-changing two years in that job, I later went on to do $$$ corporate consulting, and I wouldn't trade it for a bucket load of cash and a slightly shorter timeline to financial security. Money ain't everything, though those experiences also bolstered my "street cred" in my professional field that arguably continue to pay off in terms of helping me with BD. (Oh, and our net worth is 7 figures now. So we're doing fine.)

As an aside, I work with a personal trainer who is a former Olympic athlete and boy he charges out the wazoo. His training facility has walls covered with Olympics paraphenalia, the other trainers on his roster coach championship collegiate athletes... all of that high profile experience allows them to charge what they do.

« Last Edit: September 18, 2018, 07:23:10 AM by Freedom2016 »

Linda_Norway

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Re: Amazing Job Opportunity... with a paycut?
« Reply #23 on: September 20, 2018, 12:54:48 PM »
I also come to the thought that you should do it, for the opportunity. But make sure you get a room mate who lives in your house and covers the cost of that house. And make an agreement that you can live in it as well whenever you visit the country. I think this will be a good deal for a room mate, lots of privacy most of the time.

FreelanceToFreedom

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Re: Amazing Job Opportunity... with a paycut?
« Reply #24 on: September 20, 2018, 01:15:55 PM »
100% go for it, if you're interested. That's an awesome opportunity and well worth the pay cut IMO.

Also, you should research the tax implications. Several people have mentioned the negative tax implications, but there are some positives as well:

- I believe you'd qualify for the Section 199A deduction for pass-through income, which would equate to a 20% deduction in your "business" income. That would save you ~3k.
- You may be able to deduct your health insurance premiums. That would save you ~22% of your premiums - https://www.thebalancesmb.com/self-employment-health-insurance-deduction-3193015


Then again, I'm not an accountant, so definitely double check those!

kristof

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Re: Amazing Job Opportunity... with a paycut?
« Reply #25 on: September 21, 2018, 02:23:40 AM »
Depending on how much you're able to set aside on top of paying the student loans, you may also be able to put more into tax advantaged accounts if you form an LLC and open a solo 401(k), further shrinking the financial hit: https://www.kiplinger.com/article/retirement/T047-C000-S003-solo-401k-contribution-limits-for-2018.html