Author Topic: Practicing Mustachianism when you don't earn a big salary  (Read 2519 times)

Tobias

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Practicing Mustachianism when you don't earn a big salary
« on: September 28, 2017, 04:11:38 PM »
Does anyone practice Mustachianism in one of the more non-profit oriented professions like social work or education?  How do you make it work for you?  Why do you stay in your "helping profession" when you know you could make more in the private sector, or did you decide to leave and make bigger bucks?

My spouse and I are inadvertent mustachians because we never really shook the habits we developed when we were college activist types, living with lots of roommates, dumpster diving, getting around by bicycle, keeping the heat off in winter, infrequent showers, etc.  You might know the type!  Like many college activist types, we "didn't care about money" and went into more "helping professions."  We are in our mid-30s now.  My spouse is a social worker at a non-profit, and I am a full-time lecturer at a public college.  (I teach writing and other humanities classes.)  We gross a little over 100k a year, don't have any debt besides a mortgage, and have been meeting our employer matches on our 401k's.  We put our excess money into paying off our low-interest mortgage early (oops) or home renovations (the non-DIY kind, not very mustachian).  Our friends who followed a similar education and career path, but still rent and have student loan debt, think we are doing really well.  But I wanted to be smarter with our money and I learned about FIRE, which I have been researching the past year or so, and discussing with my spouse if we'd like to attempt it.  I may just want to achieve FI; I love teaching and the free time it affords, and can still imagine myself doing it if it weren't attached to my livelihood.

As I lurk on the MMM forums and similar sites, it seems like most folks are in professions that bring home a bigger salary.  I know that the more typical approach is to make your million now, achieve FIRE, and then focus on helping people through volunteering, starting a foundation, etc.  And I know the math theoretically works out no matter what your income: save 25X of what you can live off in a year, and you can retire and live .

I'm interested in hearing how folks in a similar path are making it work.  Maybe others who "followed their passions" and got a liberal arts degree.

(We have outgrown the dumpster diving and questionable bathing practices, if anyone was worried.)

lemonverbena

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Re: Practicing Mustachianism when you don't earn a big salary
« Reply #1 on: September 28, 2017, 04:39:17 PM »
100k combined salary is an awesome salary. You can do what you love AND retire early.

Tass

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Re: Practicing Mustachianism when you don't earn a big salary
« Reply #2 on: September 28, 2017, 04:46:35 PM »
I think step one would be to stop considering 100k a small gross!

I don't know that I can answer your bigger questions; I make 30k in a very HCOL area (financially single), but can expect my income to increase eventually after I finish grad school. So that's not exactly comparable to a profession without much room for growth. But appreciating what you have is a big part of the philosophy, right?

It sounds like you don't think achieving FI earlier would be worth doing work you enjoy less. I didn't start down my career path because of a desire to make bank, either. I don't see a problem with that, but I guess I'm curious what others think.

v8rx7guy

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Re: Practicing Mustachianism when you don't earn a big salary
« Reply #3 on: September 28, 2017, 04:47:54 PM »
Uhhhh... wanna switch incomes?  I'm an engineer too!

Tobias

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Re: Practicing Mustachianism when you don't earn a big salary
« Reply #4 on: September 28, 2017, 04:59:34 PM »
I think step one would be to stop considering 100k a small gross!

I don't know that I can answer your bigger questions; I make 30k in a very HCOL area (financially single), but can expect my income to increase eventually after I finish grad school. So that's not exactly comparable to a profession without much room for growth. But appreciating what you have is a big part of the philosophy, right?

It sounds like you don't think achieving FI earlier would be worth doing work you enjoy less. I didn't start down my career path because of a desire to make bank, either. I don't see a problem with that, but I guess I'm curious what others think.

Thank you for the perspective!  We live in Seattle, which is infamous for its high cost of living, and our neighbors work in the tech industry, shop at Whole Foods, send their kids to private school, drive Teslas, etc. so we feel like the poor ones on the block.

The lack of opportunity for wage growth is a concern for me as I decide if I want to stay in my profession.  We only get a 1-2% salary increase per year, and my contract is annual, so I don't have a lot of job security.  There is ALWAYS a need for writing teachers, but most schools don't want to hire anyone full time.

Congrats on making 30k while working on you PhD!  I only pulled in about 20k a year while working on mine, but I was happy with that since I was making money rather than taking out student loans.

rubybeth

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Re: Practicing Mustachianism when you don't earn a big salary
« Reply #5 on: September 28, 2017, 05:03:01 PM »
Library administrator married to a therapist. We are probably making a similar amount to you. It's a good income! Just keep reading and learning ways to cut back on your spending. Maybe do a case study?

Tobias

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Re: Practicing Mustachianism when you don't earn a big salary
« Reply #6 on: September 28, 2017, 05:11:49 PM »
Library administrator married to a therapist. We are probably making a similar amount to you. It's a good income! Just keep reading and learning ways to cut back on your spending. Maybe do a case study?

That is a great idea.  We did start filling out the case study excel sheet for our own financial education a few months ago, but never quite finished.

Undecided

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Re: Practicing Mustachianism when you don't earn a big salary
« Reply #7 on: September 28, 2017, 10:49:36 PM »
I may just want to achieve FI; I love teaching and the free time it affords, and can still imagine myself doing it if it weren't attached to my livelihood.

Are you familiar with the story of the Mexican fisherman?

http://www.positivityblog.com/the-story-of-the-mexican-fisherman/

Kwill

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Re: Practicing Mustachianism when you don't earn a big salary
« Reply #8 on: September 29, 2017, 01:33:34 AM »
I know that the more typical approach is to make your million now, achieve FIRE, and then focus on helping people through volunteering, starting a foundation, etc.  And I know the math theoretically works out no matter what your income: save 25X of what you can live off in a year, and you can retire and live .

As I understand it, this is not quite right. You don't have to "save" all of that amount. Some of your savings should be making money for you so that you don't have to. Now that you've got a low-interest home mortgage and have done some of the home improvement you wanted, try putting the extra into an index fund with low fees. You may also want to look back through the options in your 401ks and make sure that they are low-fee funds. There should be options for index funds there as well.

If you haven't already read it, you might want to see this article from the original blog:
http://www.mrmoneymustache.com/2011/05/18/how-to-make-money-in-the-stock-market/

rubybeth

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Re: Practicing Mustachianism when you don't earn a big salary
« Reply #9 on: September 29, 2017, 06:43:48 AM »
Library administrator married to a therapist. We are probably making a similar amount to you. It's a good income! Just keep reading and learning ways to cut back on your spending. Maybe do a case study?

That is a great idea.  We did start filling out the case study excel sheet for our own financial education a few months ago, but never quite finished.

The other thing to keep in mind is that Mr. Money Mustache and Mrs. Money Mustache made pretty "average" incomes during their working lives. Read these two blog posts if you haven't:

http://www.mrmoneymustache.com/2011/09/15/a-brief-history-of-the-stash-how-we-saved-from-zero-to-retirement-in-ten-years/
http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/

The folks who run the Journey Life blog were both teachers who are now retired and traveling the world with their kiddo: http://ajourneylife.com/

You really don't have to have an outstanding INCOME, you just have to have a good SAVINGS RATE. Increase the amount you save and you'll automatically reduce the amount you spend, assuming you're not in the habit of spending more than you earn. DH and I were used to living modestly when we got married while both in school, so we decided to aggressively pay down our student loans, knocking out around $54,000 in under four years. Then I found MMM and decided we could apply that same principle to retirement savings--none of this 15% for 40 years stuff, but rather as much as possible into tax deferred accounts, and once we have 25x our annual spending, we'll be able to stop working (but we might not stop, since we both have jobs we enjoy).

Definitely keep working on the case study, if not to post, at least for yourselves. I've done one for us to determine how much house we can afford while still being able to retire early, and it helped me see all the pieces, though I didn't post it here.

Laura33

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Re: Practicing Mustachianism when you don't earn a big salary
« Reply #10 on: September 29, 2017, 07:00:53 AM »
I think your mental error here is thinking of Mustachianism as all about the money.  The real point is to design a life that maximizes your happiness, purpose, and efficiency over time; the money itself is just a tool to deploy to get you there.

Many of the folks who make a high salary may be pressed to save the vast majority of it because they hate their jobs and can't wait to FIRE; they are trading 5, 10, 15 years of relative unhappiness to be able to spend the remaining 40, 50, 60 years doing what they want.  Others here look for FI but love their jobs and never intend to quit (SWAMIs); they appreciate the efficient and non-materialistic lifestyle and the security of being FI, but they can take the slow boat to RE.  Most people are somewhere in-between: the job isn't horrible, maybe it's even more enjoyable than not, but they don't want to be tied to it forever, so they seek FIRE on a moderate path.

Honestly, it sounds like you already have this concept nailed in your life -- you just don't realize it.  You are doing work that you enjoy and that is meaningful to you, and it is providing you a very comfortable income.  So maybe you should shoot for the SWAMI path -- work towards an efficient budget, get to FI for the security, but no need to rush to RE.  Of course, you can always blow all that up to chase some other job that will pay you a buttload of money -- but why, when you've already won the game?  Why trade years of happiness and purpose for more cash doing a job you hate? 

The real key is to figure out how not to compare yourself to your neighbor with the Tesla.  This is where I find this forum incredibly useful, because it reminds me that most people don't have Teslas, and that Teslas don't actually bring happiness anyway.  And if it really is getting to you, living in a place where it seems like everyone but you is hitting it big, move.  Seriously.  FWIW, we chose a neighborhood where we make significantly more than our neighbors -- so I can "keep up with the Joneses" while still saving half my income, and my lifestyle doesn't really stick out as unusual.  Best choice we could have made for daily contentedness.

Moonwaves

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Re: Practicing Mustachianism when you don't earn a big salary
« Reply #11 on: September 29, 2017, 08:26:30 AM »
There are a couple of other threads you might be interested in.

Any low income mustachians out there?

Saving to $10k

Does your work have to 'make a difference?' (I think there were one or two threads on similar themes to this at the same time, too)

skeptic

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Re: Practicing Mustachianism when you don't earn a big salary
« Reply #12 on: September 29, 2017, 11:16:20 AM »
I'm happy to share how we "make it work" on similar salaries in a HCOL area, but it sounds like you have things pretty well set up too.

My spouse and I are both in helping professions, and have worked at nonprofits and in education, and we have two kids. We are similar ages to you.

Some of the outlines

-bought a house in 2010 at a relatively reasonable price, at least compared to current. A little skill and luck involved here but we wouldn't have done badly if we'd invested that money in stocks and kept renting
-we rent out rooms in the house and live in community. I know this is definitely not for everyone but we lived this way before while renting and liked it, so no sacrifice and in many ways an improved quality of life if you like the people you live with
-public schools (though of course daycare was a big expense for years).
-bike almost everywhere, occasionally transit or car-sharing. Again, it helps that we love biking and figured out how to do it with kids. We can take the bus on the first day or two after a snowstorm until the main streets are plowed, and we don't let the hills or heat or wearing suits stop us. During some jobs I've had that were further than my biking comfort level, I was able to do bus+bike. Our 4- and 6-year-olds can both ride pedal bikes to school ~1 mile away.
-generally frugal habits though nothing to write home about.
-didn't have college debt, thanks mostly to frugal generous grandparents although I must add that I did cover about 30% of college through my own very hard work. Still, there is a lot of privilege here to flag and be grateful for and that needs to be paid forward and around. Did have grad school debt.
-am not supporting any parents or extended family members (again, privilege)

I think that is pretty much it. We max out both 401ks and invest pretty normally.

It seems like it's a long time to FI using "just" a 100k combined salary and basic frugality and time, especially in a HCOL area. Those who are shortening the timeline all seem to have some extra thing they are doing... a side gig, rental income, extreme frugality, something.

I'd love to see your case study or more detail on your situation if you'd like to share. We're not FI and I don't feel like we have it all figured out (college and future healthcare always loom as uncertainties), but I can at least say that we are making very good progress toward FI on what we are calling an average salary (although the median family income in the U.S. is ~75k I think, so we can still count our blessings with these salaries even if, on this message board, they seem low)

Also, for the general discussion: in my years in the field, being in a helping profession should not necessarily be equated with loving your job -- or even necessarily making a positive difference, though obviously that's the goal. My work happiness has gone up and down for many "standard" reasons unrelated to my field... attributes of the boss and teammates, micromanagement vs. latitude, reasonable vs unreasonable expectations, stability vs. chronic funding problems, more or less exciting/interesting projects/work, etc.
« Last Edit: September 29, 2017, 11:20:18 AM by skeptic »

Cranky

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Re: Practicing Mustachianism when you don't earn a big salary
« Reply #13 on: September 29, 2017, 11:25:05 AM »
I'm on the "design the life that you want" side of things - $100K is plenty of money if what you want is early retirement, though you'll have to make it a priority.

Dh and I have pursued the "living well on what we make doing what we love" angle, and it has worked well for us. We expect to retire comfortably at the "regular" retirement age in a few years, but we've had a lot of fun doing work that we've enjoyed (and raising our girls).

FI4good

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Re: Practicing Mustachianism when you don't earn a big salary
« Reply #14 on: September 29, 2017, 11:46:59 AM »
I'm on about the equivalent of 46k USD , UK income and health taxes equate to approx 25% .

My savings rate is around 40% but i wont fire until 12 years time , my partner has debts which i help with but he is staunchly independent so he will get state pension in 14 years time .

Being in my 40's now and having had 5 years of retirement in my early 30's i don't mind the slow burn , i have time and some money for musical interests, painting and tinkering with the car .

Although not directly equivalent due to healthcare and cost of living 100k doesn't sound like a small income for 2 people from here .

cheers   
« Last Edit: October 15, 2017, 01:41:13 AM by FI4good »

Tobias

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Re: Practicing Mustachianism when you don't earn a big salary
« Reply #15 on: September 29, 2017, 09:03:16 PM »
Thank you all for the thoughtful replies and links to similar threads.  I did read the articles on the MMM blog itself when I first got started, but they are worth revisiting now that we are further along in our commitment to achieving FI.  I do think SWAMI is the path I'm on.  My hesitation with staying in the career I love is the poor job security.  I am on one year contracts, and stay up at night worrying about job security.  It is looking like I'll be part time next year, which means a significant pay cut or piecing together 2-3 part time jobs with long commutes.  Wanting to be free of this anxiety is a big driver behind my desire to be FI. 

I'm happy to share how we "make it work" on similar salaries in a HCOL area, but it sounds like you have things pretty well set up too.

My spouse and I are both in helping professions, and have worked at nonprofits and in education, and we have two kids. We are similar ages to you.

Some of the outlines

-bought a house in 2010 at a relatively reasonable price, at least compared to current. A little skill and luck involved here but we wouldn't have done badly if we'd invested that money in stocks and kept renting
-we rent out rooms in the house and live in community. I know this is definitely not for everyone but we lived this way before while renting and liked it, so no sacrifice and in many ways an improved quality of life if you like the people you live with
-public schools (though of course daycare was a big expense for years).
-bike almost everywhere, occasionally transit or car-sharing. Again, it helps that we love biking and figured out how to do it with kids. We can take the bus on the first day or two after a snowstorm until the main streets are plowed, and we don't let the hills or heat or wearing suits stop us. During some jobs I've had that were further than my biking comfort level, I was able to do bus+bike. Our 4- and 6-year-olds can both ride pedal bikes to school ~1 mile away.
-generally frugal habits though nothing to write home about.
-didn't have college debt, thanks mostly to frugal generous grandparents although I must add that I did cover about 30% of college through my own very hard work. Still, there is a lot of privilege here to flag and be grateful for and that needs to be paid forward and around. Did have grad school debt.
-am not supporting any parents or extended family members (again, privilege)

I think that is pretty much it. We max out both 401ks and invest pretty normally.

It seems like it's a long time to FI using "just" a 100k combined salary and basic frugality and time, especially in a HCOL area. Those who are shortening the timeline all seem to have some extra thing they are doing... a side gig, rental income, extreme frugality, something.

I'd love to see your case study or more detail on your situation if you'd like to share. We're not FI and I don't feel like we have it all figured out (college and future healthcare always loom as uncertainties), but I can at least say that we are making very good progress toward FI on what we are calling an average salary (although the median family income in the U.S. is ~75k I think, so we can still count our blessings with these salaries even if, on this message board, they seem low)

Also, for the general discussion: in my years in the field, being in a helping profession should not necessarily be equated with loving your job -- or even necessarily making a positive difference, though obviously that's the goal. My work happiness has gone up and down for many "standard" reasons unrelated to my field... attributes of the boss and teammates, micromanagement vs. latitude, reasonable vs unreasonable expectations, stability vs. chronic funding problems, more or less exciting/interesting projects/work, etc.

Our situation is indeed similar. 

We bought a fixer-upper in 2010 and had three roommates which we phased out after I finished graduate school.  We successfully did AirBnB for a while but stopped when we had a baby last year, and currently have one roommates.  It is hard to pass up the fat stacks of AirBnB income, but our current roommate is hardly ever home and fixes things around the house when she is (after quite a few bad roommates it is nice to have a good one). 

We are very fortunate to have supportive families, who are local, which means lots of free babysitting and no expensive holiday traveling.  And we inherited two old, reliable cars from my grandparents when they passed away.  We are privileged to have no major hardships and supportive families we enjoy being near.

I am happy in a helping profession, but my spouse seems only moderately satisfied.  I have encouraged him to move to the private sector if he is unhappy anyways, but he is committed to helping on principle, and is currently working on getting his clinical social work license to move into medical social work, which pays more and has more flexible hours.  We have a one year old and don't do daycare (a huge huge huge source of saving we are very thankful for), so the opportunity to work part time for a decent hourly wage is very appealing to him, and offers more time with kiddo. 

I will get back to the case study.  We have emergency savings established, max out our Roth IRAs, have no consumer/student debt, etc., so our current ambition is seeing if we can max out the 401ks.  Our biggest expense is the mortgage.  I am happy with $1700 a month on our 15 year mortgage (that wouldn't even get you a 2-bedroom apartment in our city nowadays), but our taxes and insurance add another $400 a month, and utilities are another $300 on top of that.  Seattle is expensive, but the quality of life is amazing.