Reader Case Study - Grin and Bear It or FIRE away?

[rubor]

Hi Mustachians,

I find myself at a crossroads, and I would welcome any insight from the group. After years and years of training, I found myself in a really lucrative job away from my family, working with a bunch of not so nice people. I've been trying to save as much as possible, because I knew the unpleasantness of my job would catch up to me eventually.

Income: 500,000 after taxes from my job. I've had roughly this income for the last 2 years. I know, it's ridiculous. I work really hard for it, but it's not fair. My field is medical. We also get about 1,200 per month from a disability policy for my wife.

Current expenses: Used to be about 60,000 per year, but since reading this blog, we have gotten it down to 35-40,000 per year right now. Planning on moving in with parents temporarily if this job collapses (see below), which should lower expenses. I'm 36, wife is 34, we have a 3 month old. One 2006 Toyota Corolla, one 2011 Honda Accord, both paid off.

Breakdown of expenses over last three months - total = $8,300
Rent   $3,700 ($1230/mo)
Utilities   $1,300 ($430/mo)
Auto & Transport   $1,100 ($370/mo)
Food & Dining   $1,000 ($330/mo)
Travel   $700 (1 time cost - plane tickets for holidays)
Charity   $300 ($100/mo)
Baby supplies   $200 ($65/mo)

Expected ER expenses: I anticipate it to be lower, but it may go up as the baby gets older (college, etc)

Assets: Have saved 1,700,000, 100% of which is in index funds (20% global stock index and 80% S&P 500 index). Also own a paid-off house, worth about 200,000, in another state, which we are renting out for 1,500 per month.
Liabilities: none

Specific Question: On a daily basis, my job is stressful but fine. But the people who supervise me are unethical and frequently do things I am uncomfortable with (UPDATE: specifically, sexual harassment of employees and unnecessary procedures on patients to make more money). Recently, this has started bleeding into my daily work. There are poison pills written into my contract, so that if I quit before June 2014, I have to pay them about 100,000 as a lump sum. On the one hand, it hurts to pay that much money. On the other hand, I don't like my job, don't feel great about working with my bosses, feel like I have enough saved for FIRE, want the baby to grow up with her grandparents, want the help with childcare, and want to explore other non-medical passions. Should I grin and bear it and keep working until June 2014, or should I just pay the 100,000 to extricate myself from a bad situation and treat it as a life lesson?

UPDATE: Enough people have asked about what happens if I get fired that I decided to add to original post. Currently, I do not get paid until about two weeks after I complete each month of work. If I were to get fired, I would not get any money I had earned until the 15th of the next month. I assume they would probably try to take out as much of the 100,000 as they could from that paycheck and test me to see if I would get a lawyer. But I'm not 100% sure. Either way, I've never been even close to being fired from a job. It's not in my bones to actively do a bad job and try to get fired.

I appreciate any advice, please ask if anyone wants any more information.

[MilStachian]

Rubor,
Happy to hear about the great income, sorry you're in this predicament.

My recommendation?  I would leave.  If they are truly acting in an unethically, you're better off leaving now.  The most important is, as a man of character, staying there and watching them misbehave will drain the life out of you.  Second, what happens if this behavior catches up with them and you're caught up in the mess?

As to the poison pill; maybe use their unethical behavior to revise your contract and have them drop the June 2014 requirement.  You certainly don't want to be accused of blackmailing anyone, so you could just let them know you are incredibly uncomfortable with X, Y, and Z behaviors and would like to be released from your contract without penalty.  If they still resist, it may be worth hiring an attorney.  You might be out a few grand, but it's better than $100k.

My first instinct was to tell you to hang tough for another seven months.  But at the end of the day, if they are really doing something unethical and I did nothing, or participated in the madness, I couldn't look myself in the mirror anymore.

[Tyler]

Congrats -- you've worked hard and done a ridiculously good job of saving.  You have more than enough money to walk away today (even paying $100k for the right) and still be financially free for life.

At this point, do what makes you and your family happy.  You've earned it.

The $100k is a lot of money, but with your salary it's the equivalent of a 20% annual bonus or 5% of your net worth.  At your spending levels, it's not going to really affect your ability to live off the interest either way.  So it's up to you whether that's really worth hanging on for another 8 months.  Likewise, you could consider working another 10 weeks (1/5th of a year) to "pay for" your termination fee.  That will buy another half year of freedom without affecting your bank account as it stands today.   

While this may not be practical, I like the idea of packing the $100k in cash in a suitcase along with your resignation letter.  That should help drive home the point that your soul can't be bought.  ;)

[happy]

Congratulations on your stache. As long as you keep to your mustachian ways you are FI.

If I were in your shoes, I would politely resign (Tylers cash in a suitcase made me smile, but I  wouldn't do that) preferably for an eminently acceptable reason so as not to burn any bridges.  I would pay up the 100k and be done with it.  You can then take a break and consider whether you wish to retire or re-create your medical career in some less demanding and more family friendly direction: thats why I would leave on good terms in case I wanted/needed a reference.

[SnackDog]

Turn them in to the medical authorities in the jurisdiction in question once you have collected enough proof.  Keep written records of absolutely everything. Check the "whistle-blower" rules in your jurisdiction.  Do not pay the $100K - let them sue you for it.

[prosaic]

I'd consult a lawyer to find out possible options. Might cost $300 for an hour or so. If there's a legal way to get out of that $100K penalty, a few hundred bucks is totally worth it. Also, ask about the behaviors by your employer and whether you should report them.

[MissStache]

Yikes.  I would leave because of the unethical behavior regardless.  I think you are in a good enough place that you could easily let go of 100K, but I would agree with previous posters that you shouldn't let them have it easily. 

Whistleblowers are my heroes...

[TrulyStashin]

I'd consult a lawyer to find out possible options. Might cost $300 for an hour or so. If there's a legal way to get out of that $100K penalty, a few hundred bucks is totally worth it. Also, ask about the behaviors by your employer and whether you should report them.

+1,000

Lawyer posting here.  This raised the hair on my neck.  Talk to a lawyer who specializes in employment contracts before you do anything, including whistleblowing.  Whistleblowers often get totally screwed, despite laws intended to protect them.  First, you might be able to void the contract because of the illegal activity.  Second, your lawyer can (and should) do the talking for you if you decide to leave regardless of whether you pay the penalty.  Third, you might be implicated in some of their chicanery and a good lawyer will know how to protect you and/ or represent you to the authorities if necessary.  Fourth, if you decide to leave it will be an emotional roller coaster and your lawyer can do the rational thinking for you.

This is one of those situations that absolutely requires the counsel of a good lawyer.  Check with the voluntary bar association where you live for a lawyer who specializes in professional employment contracts (example:  "YourCity Bar Association").   Interview several before choosing.   Best wishes to you.

[dadof4]

This is a very personal decision. I'm usually the grin-and-bear type, especially considering your income. Are 7 months worth about $350k?  You could a lot of good in the world for $350k. Your quitting probably won't change your bosses' unethical behavior, they'll just get someone else to replace you and do it.

But you've certainly put yourself in an enviable position. At the very least, you can confront your bosses without any real fear of losing your job. Worst case, you quit/get fired and begin FIRE. Best case, their behavior changes and you can decide to keep working in a better situation, and quit on whenever the urge to retire strikes you.

[Bruised_Pepper]

There are poison pills written into my contract, so that if I quit before June 2014, I have to pay them about 100,000 as a lump sum.

Worst case, you quit/get fired and begin FIRE.

Hmmm...he didn't mention what would happen if he got fired.  OP, if you get fired, do you still have to pay?  If not, you could try to get fired--that would be fun, actually.  It's not like you have to worry about explaining it to your next employer. 

Cue images of George dragging the World Series trophy across the Yankee Stadium parking lot.

[zweipersona]

There are poison pills written into my contract, so that if I quit before June 2014, I have to pay them about 100,000 as a lump sum.

Worst case, you quit/get fired and begin FIRE.

Hmmm...he didn't mention what would happen if he got fired.  OP, if you get fired, do you still have to pay?  If not, you could try to get fired--that would be fun, actually.  It's not like you have to worry about explaining it to your next employer. 

Cue images of George dragging the World Series trophy across the Yankee Stadium parking lot.

My first thought when I read the OP thread was 'so just get fired'.  I'm sure they can't follow up by trying to get a dollar sum out of you (unless of course they gave it to you when you first started, or theyre assets, or something along those lines)

If that works, you should see how long you can stay and not do your work, still collecting your paycheck until you're fired.

[Dee18]

I would hesitate to either be a whistle blower or try to get fired....Both have potential long term, difficult consequences.  Consulting a lawyer seems like the most reasonable approach here.  Perhaps he or she can negotiate a more beneficial departure package.  I would be most concerned about whether the unethical conduct you've witnessed is exposing you to any liability.  If you want to act quickly though, you could just pay the money and say good-bye.  Sounds like you have more than enough....and of course lots of opportunity for part time work if you want it.

[SunshineGirl]

I don't understand why you'd feel you need to move in with your parents temporarily to save money if you leave this job, if your total expenses for the past three months is less than 9K? You earn that in, what, one week? Just keep a month of your salary in cash and you're set for a year.

I agree with the advice to actively look for a new job, and once you find one, make your decision based on that.

As far as should you stay or go just based on them being what you define as "unethical"...I don't know...Are they breaking laws, or just behaving badly? If they're breaking laws, I'd indeed get yourself to a lawyer and read over your umbrella insurance policy, because if you get sued and laws are being broken, all your hard work at savings could be at risk. I'd make sure you're protected as much as possible, and a lawyer should be able to help with this.

Otherwise, if they're just jerks, I think you should hang in there until your contract is up or leave if and only if you have another place luring you away. To just walk away and violate a contract could hurt you professionally.

[Fuzz]

Another lawyer here. TrulyStashin - has extremely excellent advice. Find a good lawyer who specializes in employment law. Interview several. Ask for references. Also, the initial consult should be free. Explain the stakes, ask for references.
Lawyer posting here.  This raised the hair on my neck.  Talk to a lawyer who specializes in employment contracts before you do anything, including whistleblowing.  Whistleblowers often get totally screwed, despite laws intended to protect them.  First, you might be able to void the contract because of the illegal activity.  Second, your lawyer can (and should) do the talking for you if you decide to leave regardless of whether you pay the penalty.  Third, you might be implicated in some of their chicanery and a good lawyer will know how to protect you and/ or represent you to the authorities if necessary.  Fourth, if you decide to leave it will be an emotional roller coaster and your lawyer can do the rational thinking for you.

[/quote]

[rubor]

Original poster here. Thanks for all the advice so far! Very helpful. I'll try to answer any questions raised. I also updated my OP to try to clarify some details.

I do not have an attorney at this point - sounds like I need to get one, or at least have a consultation with one. I probably have resisted this option because the thought of either suing someone or being sued seems extremely unappealing.

The unethical behaviors I'm referring to are sexual harassment of employees and doing unnecessary procedures on patients for extra money. Sad to say, but that is usually not something that the authorities (medical licensing board, insurance companies, government) are interested in dealing with right now. They are looking more for fraud, not abuse. However, I'm seriously uncomfortable with it, and with the sexual harassment, obviously. Have tried to quietly raise both issues with offending parties and human resources equivalent, and was told politely to buzz off.

The plan to live with parents temporarily was more for the grandparents being available aspect, but the cost savings is a nice bonus to a Mustachian. That would be until my wife and I made a more permanent decision on where to live in the area or somewhere else.

Packing the 100K in a suitcase made me laugh out loud. I will save that for my daydreams on a day when I need a smile.

[finallythere]

My 2 cents ... You are working away from your family, wife is disabled, and you dislike your job with unethical colleagues. No amount of money would be worth it to me - consult with a good lawyer, start looking for another job close to home, and be at peace with the great financial position you put yourself in. Wish you much more happiness with your next chapter. Now go! 

[chasesfish]

I would put up with it June.  Too much money on the table and you spread your income into next tax year. 

I'd also slow down your work at the same time, they seem procedure driven, so take the passive resistance approach.

[TrulyStashin]

So many people associate "lawyer" with "lawsuit" because that is the most visible connection and so they avoid finding a lawyer when they need one the most. 

Far more often than causing a lawsuit, a good lawyer prevents a lawsuit by either finding the loophole in the contract, drafting a contract so tight nobody could break it, or negotiating a kickass agreement in their client's favor.  A good lawyer sees the tiny details and the big picture at the same time and thus can help you navigate a course through the trickiest minefield.    Two of the toughest negotiators I've ever known are lawyers.  Many of us have a fierce love for justice and when a client we respect is in the crosshairs, we're like the proverbial Mama Grizzly.

That's who you want advising you right now.  You won't regret it.  Please let us know how it goes.

[ch12]

We also get about 1,200 per month from a disability policy for my wife.

Current expenses: Used to be about 60,000 per year, but since reading this blog, we have gotten it down to 35-40,000 per year right now.

Breakdown of expenses over last three months - total = $8,300

[me]Multiplied by four to get 33,200/year[/me]

Expected ER expenses: I anticipate it to be lower, but it may go up as the baby gets older (college, etc)

Assets: Have saved 1,700,000, 100% of which is in index funds (20% global stock index and 80% S&P 500 index). Also own a paid-off house, worth about 200,000, in another state, which we are renting out for 1,500 per month.
Liabilities: none

Two things: lawyers and early retirement

1) Lawyer up. This has been so adequately covered by everyone else that I'm not going into detail.

2) I'm reading that your income is $2,700 per month with $1500 rent and $1200 disability.  If I divide out your expenses over the last 3 months, then I get $2766.67 per month. That means that your shortfall between your income and average expenditure equals $66.67. Considering that you have a $1,900,000 net worth (1.7 MM in stocks, 200k in a house), I think that you can afford early retirement right now.

3) Even without the 1200 disability and 1500 rent income, a withdrawal rate of 3% on only your liquid investments would get you $51,000, very safely above your current expenditure level.  Even if you want to help your kid with college, I don't think that's going to raid your 'stash. Read http://www.mrmoneymustache.com/2011/05/12/the-coffee-machine-that-can-pay-for-a-university-education/

Correct me if I'm wrong here or if I've missed something.

[rubor]

OP here

Wanted to thank everyone for the advice, and give an update.

Based on the advice here, and after a lot of discussion with my family, I did decide to quit. I gave my notice shortly afterwards, and Dec. 31 was my last day of work.

I did end up paying the 100K, but negotiated it so that it was taken out of my paycheck over a few months as opposed to writing a lump sum. Psychologically, this actually was much less distressing. I did not talk to a lawyer - even though it was good advice - just felt like I would end up escalating things when I really wanted to just extricate myself.

I ended up leaving a lot of money on the table, but I feel great about my decision. That job made me feel gross on a daily basis, and I didn't feel as if I could change it. My stress level has dropped significantly, and I am excited to give early retirement a try!

Thanks again for all the advice, and Happy New Year to everyone!

[desrever]

Just a random thought, if you have over 500K in S&P 500, you might consider opening one of these accounts: https://www.wealthfront.com/tax-optimized-index-portfolio

[Dicey]

Holy shit! Diversify that portfolio right away!!!

Congratulations on freeing yourself from the bear trap relatively unscathed. I hope the new year is full of happy moments with your family.

[happy]

Congratulations and thanks for the update.

Hope you enjoy your ER, and we love to get updates from those who are free.

[MissStache]

What a wonderful way to start the New Year!  Congratulations and good luck!