Significant Pay Cut for More Reasonable Hours?

[Kashmani]

I am hoping that I can obtain some reasonable feedback from the Mustachian community on a potential job decision. Here is my situation:

1) Ten years ago, I joined an "up-or-out" hard-charging profession. The goal was to spend a few years in that environment and then find an exit strategy for more reasonable hours. I then had to move due to family reasons and the exit strategy never happened. Of the group of 15 youngsters ten years ago, two eventually made partner at large firms. I am one of them. Someone I never got voted off the island.

2) The irony of that situation is that eight years ago, after the first of my colleagues left, we were attending a farewell dinner. Everyone else cabbed, while I rode my bike. At some point, after a glass of wine or two, I suggested that it was sad that we could not simply keep our $90K salary year after year and simply reduce our hours, as nobody needs more than that to live. 13 other people looked at me in absolute shock and horror as if I had just said I was an alien from Mars.

3) The upshot of this is that every year of my working life, more money has been thrown at me, where gross income now is between $250K - $300K Canadian a year. None of that is guaranteed, since it's an "eat what you kill" profession. But it's still a fuck-ton of money. Well, fuck-tonne since we use the metric system up here. I am the one percent.

3) I am now contemplating applying for a government policy job that will more or less be strictly 9-5, but will only pay around $80K plus pension to start, with very little upside.

Here are the factors going through my head:

Pros:
- Regular hours
- Interesting work while dropping the non-interesting portion
- Happiness (time for hobbies for the first time in years)
- See kids grow up
- Security
- Possibly avoided heart attack
- Two-day weekends
- No more business development. Ever.
- FIRE in 14 years meaningless as by then kids will be grown up.

Cons:
- Millions of people would absolutely friggin kill to make the money I make right now and gladly take on the stress and hours for it. That likely includes most of the people on this board.
- FIRE in 14 years in current job (assuming $2.5 million in investable assets, which would require socking away about $150K every year).
- No pressure whatsoever for DW to work as long as I keep my current job.
- Irreversible - in this country, working for government tarnishes you forever for private sector jobs since people usually go to government for the lifestyle, which gets interpreted as a lack of commitment.

Has anyone here voluntarily given up a high-pressure job to take something with regular hours? Has it been worth it? Or would this be a bone-headedly stupid move?

[irishbear99]

But it's still a fuck-ton of money. Well, fuck-tonne since we use the metric system up here.

Here in the States, we call it a metric fuck-ton. Because that is somehow different than a standard fuck-ton. /shrug

- Millions of people would absolutely friggin kill to make the money I make right now and gladly take on the stress and hours for it.

It doesn't matter what millions of people would do. What is more valuable to YOU? The money you're making, or the time you could get?

FWIW, I just did a lateral job move (which ended up in a pay decrease due to COL allowances) that resulted in giving me more than 500 hours a year of my life back. (Yes, I did the math.) The pay cut wasn't nearly as dramatic as the one you're looking at, but it was extremely worth it for me.

That being said, I'm wondering if there's a third option you haven't found yet? Can you get off the "career" track at work? Is there an option to work less, switch projects, telework, etc? Maybe exploring some of those avenues would help you make the transition without the pay cut being so abrupt.

[Tyler]

I've intentionally taken a few pay cuts for better job conditions and never regretted it, although I admit that it's easier when you already have a good amount of savings.

But even with no savings, finding a work/life/earnings balance that is sustainable for you is really important.  People may not envy your high salary if your medical records and relationship history resulting from the stress and work schedule were also posted side by side.  A huge salary that burns you out isn't necessarily the best way to build your life.  You are not your job.

[Exflyboy]

So 8 years ago you were living on 90k, and now you make 250-350k?  What is your stash like?  Sounds like you are starting from scratch, which is a concern -- if you can live on 90k, where did the excess go in the intervening years?  I would want to be VERY sure you can live on that lower salary before you make a change.  Harder to adjust downward than upward.  I think a big part of the decision is also related to your wife's career choices and what you have already agreed on -- if you agreed you would be the primary earner and she would stay home, you stepping back might lead to major resentment on her part.  But if she is ready/willing to get back into the workforce, should it be necessary or should she just want a change, that makes the whole thing easier. 

Not as dramatic a cut, but I went from $72k/year to 55k/year in a job switch a few years back.  The higher paying job almost killed me (led to a bout of severe depression), and the new one was much lower stress when I first took it.  I did get a horrible commute, but that was the only downside, until they gave me a name-only promotion and I ended up with all the stress of a Big Job and none of the pay.   And now I am contemplating applying for another job in the 50-55k range, just as a security blanket while we figure out if we really are FIREd.  And I agreed that my DH could quit his Horrible Soul Sucking Job even before we knew there might be a job opportunity for me.  My spouse's health and happiness is important to me.

That was my question.. you have been doing this for 14 years or so? and have been rapidly increasing income from $90 to $300 ish.. you should already have your $2.5M (especially with the stock market climb since 2009) but you say it will take another 15 years?

Hate to be blunt but it sounds like you have a pretty low savings rate.. Translated.. you been spending a large proportion of your  ($300k) salary.

So how will you learn to live off $90k again because presumably you have been spending a lot more than this?

[norabird]

I get that fuck tonnes of money are nice, but I've always preferred to earn less and have decent work life balance. Plus, the lower salary is still high! Go for the job.

[Kashmani]

So 8 years ago you were living on 90k, and now you make 250-350k?  What is your stash like?  Sounds like you are starting from scratch, which is a concern -- if you can live on 90k, where did the excess go in the intervening years?  I would want to be VERY sure you can live on that lower salary before you make a change.  Harder to adjust downward than upward.  I think a big part of the decision is also related to your wife's career choices and what you have already agreed on -- if you agreed you would be the primary earner and she would stay home, you stepping back might lead to major resentment on her part.  But if she is ready/willing to get back into the workforce, should it be necessary or should she just want a change, that makes the whole thing easier. 

Not as dramatic a cut, but I went from $72k/year to 55k/year in a job switch a few years back.  The higher paying job almost killed me (led to a bout of severe depression), and the new one was much lower stress when I first took it.  I did get a horrible commute, but that was the only downside, until they gave me a name-only promotion and I ended up with all the stress of a Big Job and none of the pay.   And now I am contemplating applying for another job in the 50-55k range, just as a security blanket while we figure out if we really are FIREd.  And I agreed that my DH could quit his Horrible Soul Sucking Job even before we knew there might be a job opportunity for me.  My spouse's health and happiness is important to me.

That was my question.. you have been doing this for 14 years or so? and have been rapidly increasing income from $90 to $300 ish.. you should already have your $2.5M (especially with the stock market climb since 2009) but you say it will take another 15 years?

Hate to be blunt but it sounds like you have a pretty low savings rate.. Translated.. you been spending a large proportion of your  ($300k) salary.

So how will you learn to live off $90k again because presumably you have been spending a lot more than this?

I have only made this level of income the past two years. For most of my career, it was between $100-150K, with me being a sole breadwinner. And paying off the mortgage took big chunks of cash since I was unable to buy before the upswing.

Annual expenditures are $55K. We have tracked these religiously since 2007 so I have several years of data.

[AZDude]

If I were you, I would cut my expenses to the bone, work my ass off for two-four years and then FIRE.

Anyway, I took a significant pay cut for the job I have now and have been much happier for it.

[Exflyboy]

Well in that case I personally would suggest keep doing what your doing for another couple or three years and socking away as much as poss.

You haven't said what your stash is right now but I'm assuming its over $1M?.. If you could get to $1.5M this would support a spend of $60k at 4% WR, then you would be financially independent and can do whatever you choose. I suggest this cus I am extremely risk adverse and would be reluctant to shut off the firehose of cash just when the getting is good so to speak. I mean we could go into another recession and whatever job you have could go away.

Then again if you can't stand what your doing, change jobs.. Not my preference however... Then again others will most certainly disagree with me.

[mm1970]

- Millions of people would absolutely friggin kill to make the money I make right now and gladly take on the stress and hours for it. That likely includes most of the people on this board.

Not me man, I've got little kids.

But yeah, what I'd do is hold out for a couple more years - but it entirely depends on your annual expenditures.  At $80k income with $55k expenditures - yeah, I'd save a bit more first.

[SKL-HOU]

I would work for another 3-4 years. With your income and expenses, that should translate into approximately 500k savings in addition whatever else you might have. Is your house already paid for if you were putting chunks of cash towards it? After 3-4 years, take a job with a better schedule even if it is less money.

[formerlydivorcedmom]

The new job has a pension?  How many years do you have to work to get it, and how much salary will it replace?  That may very well decrease your amount necessary for FIRE.

I don't think I could do the crazy work hours with small kids for very long.   I'm on track to FIRE in 13 years...right as the youngest kid graduates from high school.  I am seriously considering cutting back to part-time work , and the resulting half-salary, in 5 years, even if that means delaying FIRE for a few more years.  I'd rather have that time with the kids.

[bacchi]

I have only made this level of income the past two years. For most of my career, it was between $100-150K, with me being a sole breadwinner. And paying off the mortgage took big chunks of cash since I was unable to buy before the upswing.

Annual expenditures are $55K. We have tracked these religiously since 2007 so I have several years of data.

You spend $55k/yr WITHOUT a mortgage? That's your first problem. You need to get that under control.

[honeybbq]

I have only made this level of income the past two years. For most of my career, it was between $100-150K, with me being a sole breadwinner. And paying off the mortgage took big chunks of cash since I was unable to buy before the upswing.

Annual expenditures are $55K. We have tracked these religiously since 2007 so I have several years of data.

You spend $55k/yr WITHOUT a mortgage? That's your first problem. You need to get that under control.

2 kids in daycare would eat up half that. 

[acroy]

You are in a nice spot, congratulations!

Best choice: find clever ways to reduce your hours while keeping the $$. Any way to do that? If not - opportunity to go independent / consultant?

[Bearded Man]

I've intentionally taken a few pay cuts for better job conditions and never regretted it, although I admit that it's easier when you already have a good amount of savings.

But even with no savings, finding a work/life/earnings balance that is sustainable for you is really important.  People may not envy your high salary if your medical records and relationship history resulting from the stress and work schedule were also posted side by side.  A huge salary that burns you out isn't necessarily the best way to build your life.  You are not your job.

I once took a very tiny (5K) pay cut to cut my hours in half, and get out of an insane environment. Went from 80 hours a week to 40. A few months later I got a 35% raise putting me way above what I had been making before. I did it by using a counter offer, and I STILL left money on the table.

Fast forward, I left that job for a better commute and less work, better hours AND more pay, as it too was turning to crazyville and everyone was leaving. Fast forward a couple years and I took yet ANOTHER job that had work from home benefit, better benefits in general, and a 20% pay increase.

I've actually come to the point where I think you can make a pay INCREASE if you screen for easy jobs, that pay more and have better benefits. Looking back, it appears to largely be a matter of just looking around. If you end up picking a bad place, hop jobs until you find one you like. That's essentially what my strategy is going to be. I've actually found a few others at work who operate on the same philosophy. Get the best paying jobs with the most tolerable work, and once it becomes intolerable, change jobs again. We all seem to change jobs every 2 years as a result. Not bad, long enough to not be considered unusual on a resume, but short enough that I get while the getting is good and bail when it's no longer working for me.

[ZiziPB]

I took a significant pay cut (around 30%) over 5 years ago when I left a position in private practice and took a job as in-house counsel.  It was the best decision I ever made.  I liked private practice but it was super stressful and I worked ridiculous hours.  The current job is 9-5, no weekend work, no travel, no business development responsibilities.  My salary is lower than what I would make in private practice but my benefits are much better (including a very good 401k match which was ZERO in my prior job) so I probably ended up saving more since I switched jobs than I would have in the prior job.  I don't regret it one bit!

[Clean Shaven]

Posting to follow. 

I'm in somewhat of a similar situation to the OP, but am just plain tired of my profession/occupation.  OTOH, it's hard to walk away from a metric shit-tonne of $.  I'm curious to see what the responses and discussion are in this thread.