Author Topic: New Career--or Too Expensive?  (Read 5530 times)

oldtoyota

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New Career--or Too Expensive?
« on: September 08, 2014, 09:39:46 AM »
By chance, I met a woman who happened to tell me about the graduate program where she's seeking a degree. It's exactly what I have wanted to do! I did not know there was a degree in it. I thought I'd have to become a nurse to do this kind of work--about which I am being cryptic since this is the internet--yet I knew I did not want to be a nurse.

Spouse had good advice to see if I could do this sort of work without a degree. I think the answer is no if I want to do it for pay, but I'll check.

My question for you all is:

1. Have you confronted wanting to change careers with about 3-9 years left before FIRE?
2. How would you go about calculating how the graduate degree cost would affect FIRE plans?

I have a feeling I am not going to like the answer, because FIRE is more important to me than a career change. I am thinking that the answer will be that I'll have to increase my time to retire so I can get educated and then pay for that education and then move into a career that pays less than I earn now.

If the above proves true, I am thinking the answer is to 1) stay in my lucrative career until FIRE and 2) do the dream work as a volunteer when I retire.

Have I already answered my own question? LOL

Is there anything else I should consider?







2ndTimer

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Re: New Career--or Too Expensive?
« Reply #1 on: September 08, 2014, 09:58:52 AM »
It really boils down to long term vs. short term and how badly you want to work in this new field.  There is also the question of your spouse.  If you want to work in this field so much that you will stay in it beyond the time when you can FIRE that will affect him too.  Will he enjoy his FIRE so much without you to play with?

If you wouldn't enjoy this new field so much that you would stay in it instead of FIRE, does it make sense to postpone FIRE for it?

There is no right answer to those questions.  Only YOUR answer.

Cheddar Stacker

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Re: New Career--or Too Expensive?
« Reply #2 on: September 08, 2014, 10:22:13 AM »
Paying money for education is not the worst thing in the world. However, if you can get the education for free and do this work as a hobby/volunteer in a few years that makes more sense to me.

My question for you all is:

1. Have you confronted wanting to change careers with about 3-9 years left before FIRE?
2. How would you go about calculating how the graduate degree cost would affect FIRE plans?

1. Yes.
2. (Cost of degree + lost income) x expected ROR ^ # of years. Example:

Cost of degree = $25K
Lost income via time off work and/or change in career = $75K (This part would be difficult, but maybe take the difference in wage over the period of time left at current job, 3-9 years)

$100K (25+75) x 7% ^ 10 years = $196,715

This is opportunity cost at it's most core meaning. The money spent on the degree could earn 7% for the next 10 years. The lost income could earn 7% for most of the next 10 years. The formula above is not perfect, but it gives you some idea. Then take that times the 4% SWR and you're left with an $8K/year difference in ongoing cash flow loss.

oldtoyota

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Re: New Career--or Too Expensive?
« Reply #3 on: September 08, 2014, 10:53:51 AM »
Paying money for education is not the worst thing in the world. However, if you can get the education for free and do this work as a hobby/volunteer in a few years that makes more sense to me.

My question for you all is:

1. Have you confronted wanting to change careers with about 3-9 years left before FIRE?
2. How would you go about calculating how the graduate degree cost would affect FIRE plans?

1. Yes.
2. (Cost of degree + lost income) x expected ROR ^ # of years. Example:

Cost of degree = $25K
Lost income via time off work and/or change in career = $75K (This part would be difficult, but maybe take the difference in wage over the period of time left at current job, 3-9 years)

$100K (25+75) x 7% ^ 10 years = $196,715


I am glad you answered. =-) I was thinking about you when I wrote this and wondering if the formula would be similar to the one regarding my mortgage and backing out the mortgage cost post-FIRE with the goal of determining how I could FIRE with a mortgage. That was wordy. Hope I make sense!

Thank you!

oldtoyota

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Re: New Career--or Too Expensive?
« Reply #4 on: September 08, 2014, 10:55:19 AM »

There is no right answer to those questions.  Only YOUR answer.

I agree--and I still find it helpful to talk about with financially together people. =-)

I should have noted that my spouse intends and wants to keep working past my FIRE date.

Cheddar Stacker

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Re: New Career--or Too Expensive?
« Reply #5 on: September 08, 2014, 11:11:28 AM »
I am glad you answered. =-) I was thinking about you when I wrote this and wondering if the formula would be similar to the one regarding my mortgage and backing out the mortgage cost post-FIRE with the goal of determining how I could FIRE with a mortgage. That was wordy. Hope I make sense!

Thank you!

Made sense to me since I know what you're talking about. Not sure anyone else here will understand that sentence though. Oh well. Our little secret I guess.

mozar

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Re: New Career--or Too Expensive?
« Reply #6 on: September 08, 2014, 06:35:12 PM »
Is this new job also lucrative? Could you go part time and then get a job straight away making more than you are now? I'm not great with formulas, I just add and subtract things, but hard to do without details. For me it would depend on whether you are talking 3 or 9 years. If it was 9, maybe. 3, not so much.

oldtoyota

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Re: New Career--or Too Expensive?
« Reply #7 on: September 08, 2014, 06:54:37 PM »
Is this new job also lucrative? Could you go part time and then get a job straight away making more than you are now? I'm not great with formulas, I just add and subtract things, but hard to do without details. For me it would depend on whether you are talking 3 or 9 years. If it was 9, maybe. 3, not so much.

Sadly, it is not lucrative. I'd make at least $40K less.

Dr. Doom

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Re: New Career--or Too Expensive?
« Reply #8 on: September 08, 2014, 07:21:37 PM »
I seriously considered this about seven years ago and blogged about the experience on the following two pages:

http://www.livingafi.com/2014/06/the-job-experience-tech-support-year-4-part-2/3/
http://www.livingafi.com/2014/06/the-job-experience-tech-support-year-4-part-2/4/

It came down to the same equation that CS metioned: 
- Opportunity cost of NOT working while getting trained for new career
- Plus cost of training for new career
- Plus potential earnings on these costs

Like you, my desired new career would result in a pay cut, which is essentially another cost. Also: decreased job stability.

I weighed these costs against potential benefits.

For that amount of financial risk I decided I'd need an absolute guarantee that I was going to be thrilled every waking moment of my new career in order to head down that path.  Obviously, such a guarantee doesn't exist, so I ended up passing.  Still, any investigation you can do in this area to help you predict how much "happier" you might be will help you in your decision making process.


oldtoyota

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Re: New Career--or Too Expensive?
« Reply #9 on: September 09, 2014, 10:50:59 AM »
I seriously considered this about seven years ago and blogged about the experience on the following two pages:

http://www.livingafi.com/2014/06/the-job-experience-tech-support-year-4-part-2/3/
http://www.livingafi.com/2014/06/the-job-experience-tech-support-year-4-part-2/4/

It came down to the same equation that CS metioned: 
- Opportunity cost of NOT working while getting trained for new career
- Plus cost of training for new career
- Plus potential earnings on these costs

Like you, my desired new career would result in a pay cut, which is essentially another cost. Also: decreased job stability.

I weighed these costs against potential benefits.

For that amount of financial risk I decided I'd need an absolute guarantee that I was going to be thrilled every waking moment of my new career in order to head down that path.  Obviously, such a guarantee doesn't exist, so I ended up passing.  Still, any investigation you can do in this area to help you predict how much "happier" you might be will help you in your decision making process.

Thank you, Doom!

After thinking it over and discussing it here and with the spouse, I think I am going to stay in my current industry and then, once I retire, volunteer to do similar work. Although the work won't be exactly the same and I won't be allowed to do certain things about the degree, I am pretty sure I'll be able to do enough of the work (as a volunteer) that it'll still be meaningful to me.

I will channel that "going-to-school" energy into finishing a book.

 

Wow, a phone plan for fifteen bucks!