The Money Mustache Community

Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: mERK on October 03, 2014, 05:00:07 AM

Title: Major job change advice - free house involved
Post by: mERK on October 03, 2014, 05:00:07 AM
Ok, so here is my situation that has been keeping me up nights for nearly a month:

I currently have a decent job that earns me around $60k a year plus a free house on 11 acres (no rent or mortgage, split utilities), a company car, phone, and a 3 minute commute. I am due to be promoted and make substantially more than that in 2-3 years, although that is not guaranteed, as it is based on the fluctuations of the business. However, decent raises ($2-4k) are a near annual occurrence.

Out of the blue, I was recruited for a job at a startup that would give me nearly double the salary to start plus more vacation time and potential for huge growth in my industry. It is located in an area where the cost of living is very comparable to where I currently live.

This new company could be huge in my industry if everything they are planning comes about. They have some good people in leadership with a good investment base. Taking this job would get me in on "the ground floor" and would allow my salary to to potentially grow exponentially in the next few years. However, it is a startup, so there is always the chance of failure.

My current company is secure, but it is not growing and will never be a leader in the field. My wife and I have been living the Mustachian lifestyle and treating debt like our hair is on fire for the past 1.5 years, so we have not been saving for a house, as I did not expect to be moving. If I took this job, I would need to buy/rent a house, buy a car, and get a smartphone along with the requisite data plan. In other words, we will be taking on a fair amount of debt in order to take this job. I currently have remaining about $4k in credit cards and about $58k in student loans, so the jump in pay could have us out of our current debt in a year or so. Of course, we would be taking on new debt.

Take the job with the tremendous potential upside, or stick with the secure job that will continue to pay me a livable wage with nice perks?

Clear as mud? Thanks for any help. I'd be happy to expound of clarify, if needed.
Title: Re: Major job change advice - free house involved
Post by: BlueHouse on October 03, 2014, 05:12:26 AM
IMO, you should take the job. The opportunity to grow your salary so quickly comes infrequently and should be grabbed. increasing salary now means you have so many choices about how to tackle debt and save for future. Go for the most options.  Keep your spending low and you'll have the best of both worlds.
Title: Re: Major job change advice - free house involved
Post by: thedayisbrave on October 03, 2014, 07:57:49 AM
I understand your hesitation about taking on more debt, but you don't necessarily HAVE to.  For instance, you could rent for the first year while you throw down your debt.  OK, you need a car - you can probably find something decent under $5K that won't require a huge amount of debt (if you finance it at all).  A smartphone won't require you go into debt - if RW is available, go with them.  They've got new phones out now that are in the $100-$200 range if I'm not mistaken, and you can have an unlimited plan for $30/mo... that's hard to beat.

Personally I would be looking at taking the offer.  You'd have the opportunity of paying off your debt & becoming FI a lot quicker than your current salary - as long as you work at keeping your costs low, as BlueHouse advises.  But then again I'm more of an entrepreneur/start-up nerd myself so you may want to take that with a grain of salt.

Either way, you're in an enviable position.  Good luck!
Title: Re: Major job change advice - free house involved
Post by: mERK on October 03, 2014, 10:12:02 AM
Thanks for the advice. It is much appreciated.
I guess my big fears are:
Title: Re: Major job change advice - free house involved
Post by: mxt0133 on October 03, 2014, 10:52:16 AM
From the outside to address your concerns.

If the start-up does go bust which is certainly possible, you were recruited because you have marketable skills.  This would lead me to believe that you would also be marketable to other companies in your field.  Remember you current company is just as prone to going bust.

Now regret part.  Try and picture yourself 10 years from now and ask yourself which you would regret more?  If you stayed at your current employer earn good income and be on the steady path to FIRE would you regret it more that you didn't take the opportunity than taking the opportunity and having it not work out and probably in the same position you are now just a year or two behind?  For some people the pain of loosing is greater than the pleasure of gaining, so if you think that you would regret it more that you tried and failed vs  not trying at all then stay.

Also consider what are the risks of failure, do you have savings to survive a blow up and give you enough time to get another job?  Do you have a spouse to soften the blow?  How much cash does the start-up have and what is their burn-rate, basically how long can the start-up keep the lights on until they have to shut down.

As time passes, you might get married, hve kids, ect. it will be much harder to jump on these opportunities.
Title: Re: Major job change advice - free house involved
Post by: skunkfunk on October 03, 2014, 10:57:08 AM
Don't buy if you move, if that startup goes bust you'll regret buying a house.

Free housing is a HUGE perk. All else equal, which job will you enjoy more and have less work hours?
Title: Re: Major job change advice - free house involved
Post by: BlueHouse on October 06, 2014, 06:28:28 AM
Assume the startup goes bust. Prepare for the worst. In the meantime, you've gained a new set of skills and you've shown your future employers that you are worth more money.  The next job will just bring in more. Personally, I would never hire someone who had only one job ever. (Unless that person were very young). Remaining in one company too long can be a problem when looking for new work. Many people (including me) have biases against people who stuck with one job ever. In my industry, it just shows lack of initiative, laziness, and usually the desire to hide among others who don't want to learn new things. That's my industry, my geographic location, and my bias, but I know I'm not alone in that thinking.  Apologies to all of the one-job people. I'm sure you are fine peope too.