Author Topic: The money vs time conundrum (evaluating new job offer)  (Read 3645 times)

jjcamembert

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The money vs time conundrum (evaluating new job offer)
« on: September 30, 2015, 03:40:04 PM »
I know this topic has been asked countless times on this forum, and the answer's eventually up to my preferences. But I'd appreciate some like-minded analysis that I know I can find in the Mustache forums ;)

Does my math make sense? Does it make sense to turn down this massive salary increase for my free time now?

Current job: Salary $80k, 4 weeks leave, 3 weeks sick leave, 10% retirement match.
Current Total value: ~$97k, 13 years to FIRE (valued sick leave at 50% because I donít use it all)

Pending job: Salary ~$120k, 3 weeks leave, no retirement match
Pending Total value: ~$127k, 9 years to FIRE
Additional commute time: probably 30min / day = -$4800 (at current rate, $40/hr)
Additional working time: probably 1-2 hours/day = -$14400 (at current rate, $40/hr)
Adjusted: ~$107k

Other things:
Can telecommute occasionally from current job, canít from pending (-10 days est., so ~$3200)
Now: Super-chill workday, positive environment; Pending: nice people but more stressful environment (+1 to stress level)
Have personal office and standing desk; cubes at pending (+1 to stress level)
Can eventually work 75% at current job (trading time now for longer FIRE). Unknown at pending.
Probably won't get a significant raise anytime soon at current job.

Savings rate already 30-50% (recent medical bills brought down to 30%)
Pending job provides stock options which *might* be worth something when the company is sold. Doubt it would be enough to affect my FIRE significantly. Startup looking to be bought by bigger company in next couple of years.

Difference = +$7k for more stress, or $30/day (not including taxes). But FIRE 4 years earlier. Although I would like the extra (real) money, I value my free time. I'm an avid skier and take martial arts classes, so I'd have less time to enjoy those hobbies (especially as my body ages). Right now I'm thinking the switch isn't worth it because my day-to-day going to work is great; I don't hate my job, yay! Wish I got paid more though. Thoughts?
« Last Edit: September 30, 2015, 03:46:01 PM by jmj »

LAGuy

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Re: The money vs time conundrum (evaluating new job offer)
« Reply #1 on: September 30, 2015, 03:54:08 PM »
Think you've answered your own question. Probably not worth it. Maybe you've heard of the marginal utility of money? Basically, past a certain point, more money doesn't do a whole lot for you. It's one of the reasons I've personally never pursued management level positions. Lot more hassle for just a few more bucks. Keep in mind, all the extra dollars earned at that new job are also going to be taxed at your highest tax rate. Working a bit longer isn't the end of the world or anything. Especially if it's at a job that you at the least don't mind doing (sounds like your current situation).

DaveR

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Re: The money vs time conundrum (evaluating new job offer)
« Reply #2 on: September 30, 2015, 05:09:21 PM »
I run numbers a little different:

Current:
$80k + 10% match = $88k/yr.
52wk/yr - 4wk leave - 1.5wk sick = 46.5wk/yr working
Assume a 40hr wk and a 30min/d commute = 42.5hr/wk "working"
Total 46.5 wk/yr * 42.5 hr/wk = 1976 hr/yr
That is 88000 / 1976 = $44.53 per hour

Pending:
$120k, no match = $120k/yr.
52wk/yr - 3wk leave/sick = 49wk/yr working
More hours, longer commute: 50hr wk and a 60min/d commute = 55hr/wk "working"
Total 49 wk/yr * 55 hr/wk = 2695 hr/yr
That is 120000 / 2695 = $44.53 per hour

Wait! what? They are the same per hour? And that doesn't even factor in all the intangibles.

lhamo

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Re: The money vs time conundrum (evaluating new job offer)
« Reply #3 on: September 30, 2015, 05:46:06 PM »
I like DaveR's way of calculating things.  No question your current gig has a much higher value-for-life-energy ratio. 

But can you possibly use the offer from Company B to negotiate a raise at Company A?  Not necessarily by threatening to leave, as that can sometimes backfire, but if you have a sympathetic manager maybe mentioning that you're being recruited at a higher salary but don't intend to leave might still boost your current pay a bit, or get you some other increased intangibles.

use2betrix

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Re: The money vs time conundrum (evaluating new job offer)
« Reply #4 on: September 30, 2015, 05:54:52 PM »
Keep your current gig. Sounds like a great job.

cheddarpie

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Re: The money vs time conundrum (evaluating new job offer)
« Reply #5 on: September 30, 2015, 07:18:14 PM »
I'm in almost exactly the same position with different numbers. I keep feeling tempted by the new job and then I start feeling nauseous ... I have a very strong disdain for my current job, but the time and flexibility is HUGE. I think we stay where we are. :)

Dicey

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Re: The money vs time conundrum (evaluating new job offer)
« Reply #6 on: September 30, 2015, 07:51:10 PM »
I was ready to raise my hand for current job when I saw DaveR's analysis. Now I'm standing on a chair with both hands in the air. My final answer is STAY!

jjcamembert

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Re: The money vs time conundrum (evaluating new job offer)
« Reply #7 on: October 01, 2015, 09:49:53 AM »
Thanks everyone, your responses were excellent!

LAGuy - yeah, at this point more money wouldn't change my lifestyle.

DaveR - thanks for re-doing my calculations! I was trying to value each component, but your way is simpler and gets to the root question: how much money am I getting for how much time? I will definitely use this in the future.

lhamo - I have been trying to work with management to get a higher salary, but unfortunately there's a lot of bureaucracy behind that decision. The people who actually know what I do (and have given me good recommendations) have little power over the actual compensation process. This was the primary reason I started looking at other jobs.

Trixr606, cheddarpie, Diane C - Thanks for your recommendations too!

lhamo

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Re: The money vs time conundrum (evaluating new job offer)
« Reply #8 on: October 01, 2015, 10:06:14 PM »
lhamo - I have been trying to work with management to get a higher salary, but unfortunately there's a lot of bureaucracy behind that decision. The people who actually know what I do (and have given me good recommendations) have little power over the actual compensation process. This was the primary reason I started looking at other jobs.


I feel your pain.  Mine is outlined in detail in my journal, and led to me resigning/deciding to semi-FIRE.  It is frustrating when you are stuck in an inflexible system.  But it still sounds like your current gig offers much better life balance. 

grantmeaname

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Re: The money vs time conundrum (evaluating new job offer)
« Reply #9 on: October 02, 2015, 01:21:39 AM »
Did you tell new job your salary? Obviously they want you, but you should let them now that the salary isn't enough that it's worth it to leave. Unless you wouldn't take the new job at any price...

DaveR

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Re: The money vs time conundrum (evaluating new job offer)
« Reply #10 on: October 02, 2015, 09:09:14 AM »
lhamo - I have been trying to work with management to get a higher salary, but unfortunately there's a lot of bureaucracy behind that decision. The people who actually know what I do (and have given me good recommendations) have little power over the actual compensation process. This was the primary reason I started looking at other jobs.

With another job offer in hand, you have some leverage. There is more to compensation than a higher salary. Bureaucratic BS, seniority, and whiny people might mean that you are limited to a particular salary number, but get creative.

 * Telecommuting is worth ~$100/day...tell 'em you want to work from home every Friday.
 * A week of vacation is worth ~$1900...ask for another one. Or convert one of those 'sick' weeks to paid vacation.
 * Find other perks...executives can get things like a company car or car allowances, travel benefits (use of the company beach house), gym memberships, etc, etc. Not that you are an exec, but that doesn't mean you can't get some extras.
 * Look around and see if there is anything to improve your work environment...better office? new computer? big dual monitor setup? an intern?

The main thing is to think about it from the company perspective and figure out where the hangup is in the process. Giving you $10k more per year isn't going to bankrupt them, but they have to be "fair" and make sure they can justify the dollars. You just need to help them along with some good reasons.

Gone Fishing

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Re: The money vs time conundrum (evaluating new job offer)
« Reply #11 on: October 02, 2015, 09:32:07 AM »
A 36% cash raise is substantial.  Any chance of relocating closer?  Also, with that options talk, is it some sort of startup?  If so, it might cost you more than 1-2 hours extra a day.  Cubeville would also suck. 

It sounds like you are well on your way to SWAMI with your current gig.  Things do change, though. Does everything look stable, do you think it could last all the way until FIRE?

Just things to think about...

mm1970

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Re: The money vs time conundrum (evaluating new job offer)
« Reply #12 on: October 02, 2015, 09:51:23 AM »
When it comes to salary, honestly, many companies will only give you a raise if you have a different job in line.

In fact, we just rehired someone we laid off (because of downsizing).  He got a raise at his new job.  We had to offer him more than that to come back.  His current company countered.  We had to offer even more.

So now he makes more than many people here, with 2 decades more experience.  Which is totally unfair, but it's the game this company plays. 

It's entirely possible yours is the same.  The "no money" means "we don't have to".  When you decide to leave, it's magically there.

Schaefer Light

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Re: The money vs time conundrum (evaluating new job offer)
« Reply #13 on: October 02, 2015, 11:38:34 AM »
* Look around and see if there is anything to improve your work environment...better office? new computer? big dual monitor setup? an intern?
Personally, I'd ask for a hot secretary.
« Last Edit: October 02, 2015, 11:40:49 AM by Schaefer Light »