Dear MMM Forum,
I am quite new to the MMM family, but I have been following the blog for awhile and I would like to expose my case so that you help me with a decision on my career path. Basically, it boils down to continue being a very well paid IT consultant with a certain job insecurity, or accept a very stable job with more responsibility and better long term prospects but lower salary. All that, keeping in mind that my target is achieving FI as soon as possible, mustachianism and badassity certainly help a lot there!. Since it’s difficult to find people in the same situation that I am in, I thought it would be a good idea to ask you for some advice. I am not an English native speaker, so I apologise for my English mistakes.
I am an early 30’s IT consultant working in Holland. I have been consulting for the same company for the last 6 years, but the budget for the project I am in ends in around 4 years. At that point, I will have to job hunt for a new project. Currently, there is an opening in my company for a long term position that matches my expertise. However, I am considering if I should accept or not this position if they offer it to me. I feel I have a very good chance of being offered the position.
In summary, these are the differences I can think of for the new position:
Advantages:
- Long term job security, since it would be a long term position in a government related industry.
- More responsibilities leading a small team.
- An almost guaranteed pension scheme upon ‘regular’ retirement.
- Better job opportunities to climb the corporate ladder, better long term prospects.
Disadvantages- Less salary. Basically, I anticipate I would take me 10 years before I start making what I make at the moment.
- More managerial tasks: leading the team, meetings, etc. I actually like doing technical tasks, which is what I do at the moment. Therefore more management tasks wouldn’t be something I would actually be looking for in the near future.
On the personal front, I am married with no kids, but we have plans to have our first child in 2 years time. My wife is not working at the moment.
We have been doing our financial homework for the last 6 years and I feel like this decision could deviate us from our current plan by several years. However, options like this one do not happen often, so if I don’t jump into it, I might not get a similar one.
Let’s put some
numbers into our financial situation:
- Current Salary Income: ~110K euros/year net
- Current Expenses: ~30K euros/year
- Stash: ~380K euros invested mostly in standard low cost ETFs (~50%) and CDs (~50%)
- Debt: No debt.
Please note that although 1 euro ~ $1.33. The living costs in some areas in Europe are also higher. I’ve also lived in the USA and I would guess $1 buying power in USA is similar to 1 euro buying power in Europe.
So we have a very high savings rate of about 72%, which I know is very uncommon. Although we are quite frugal, I know our big savings rate comes mainly from my high salary. Therefore, I am a bit reluctant on giving it up even if I have a better job security.
The salary for the new position would be ~72 K euros/year net + benefits. All the rest would remain the same, which would obviously erode our current savings rate. By the way, I certainly know now that it will be difficult for me to get such an advantageous IT position like the one I have in four years time. So I might have to settle for less when that moment comes… Lots of uncertainty here. Worst case, I’ll have to settle for around 35% less in 4 years time.
My calculations for FIRE are as follows:
- We would like to have a SWR of 2.5% in investable assets (mainly ETFs). Yes I know it’s very conservative, but I am looking into a loooong retirement :-)
- I would probably relocate next to my parents in southern europe, where our living expenses would be considerably lower, Mainly because my parents already leave there and have multiple rental properties. So we could leave on one of them without paying any rent and be close to family at the same time. Therefore, I anticipate living expenses of around 25K euros / year.
Considering the previous points, we need to stash 1M euros in investable assets and have no debt in order to achieve FIRE. But the good news is, we are about to reach 40% of that target!
I have done some projections based in all the previous numbers and I think we could achieve FIRE in about 4.5 years at the current rate (assuming all goes according to plan). On the other hand, if I were to get the new position, it would take me about 7 years to get to the same point (which is not bad either!).
I also want to note that I kind of like/enjoy my current job (most of the time). So even if I were to achieve FI, I think I wouldn’t actually stop working. I would just stop worrying about money and have a more relaxed life.
So what do you think and why?
- Risky short FIRE (4.5 yrs) or
- Secure 'slow' FIRE (7.5 yrs)
Thanks in advance for your opinion!