Risky/cool career move, short-term pay cut? (Or: First-world problems.)

[schneider]

My partner and I are in our early 30s and live in an expensive city in the US. Due mostly to luck we make kind of a lot of money at the moment — something like $175K jointly — and our savings are high too (call it $70K). If nothing changes about our financial situation, we'll be financially independent by the time we're 40, but it would be a little silly to expect that nothing will change; Glassdoor tells me that I'm pretty near the upper end of the pay range in my (tech-related) industry, recessions happen, and rent is increasing where we are at an alarming rate. But still, things are good for now.

At the behest of a former colleague, I am interviewing for what seems like a very cool job that, if they wound up hiring me, would involve us picking up and moving to a very nice part of Europe. I'm nowhere near the stage of the application process where they make me an offer, and I'm not arrogant enough to assume that I'll get one, but it's hard not to think about. The job would look great on my résumé and should really help me develop my skills, living in another country for a few years would be a lot of fun, and I'm optimistic about the fit… but it seems unlikely that they would be able to match my current salary, and they might not even be able to come close, just because tech salaries are generally quite a bit lower in Europe.

My partner could surely find a job in this city is in and is interested in trying something new, but might have to look for a while in a country where English is not the official language, so there could easily be a decrease in pay there too.

We're trying to figure out how much of a pay cut we could stand for this kind of opportunity, and how to weigh that against the fact that, if we don't do anything new, someday I am liable to have to take a pay cut anyway. Clearly we could live very comfortably on half of what we currently make, even less, but it seems like we should probably not voluntarily cut our gross savings rate by too much.

I should emphasize that, in my mind, this is ultimately a gross-savings question — I'm pretty comfortable comparing the cost of housing, healthcare, taxes, etc to get a number out at the end, but I don't have a clear picture of how small we can let that number get without seriously compromising future security.

An Outrageously Optimistic person would probably say not to worry about the money and go for the life experience, right? My own lived experience is more that money is hard to come by and you need a lot of it to have any measure of security and dignity in the US. Having this job under my belt should increase my earning potential here in the US, but taking a cut now in hopes that it gets you a gain in the future is a heck of a gamble. Right?

Has anyone else out there ever taken a pay cut for a risky/cool career move? Did it work out financially? Should I hold on for dear life for my high-earning job?

[2Cent]

Which country? What job?

Salaries are not the only part of the equation. Depending on where in Europe you live COL can be much lower. But why not become FI first and then move to Europe with no money worries. I'm pretty sure that if salary is not an issue, you could find hundreds of cool jobs there. Especially in the tech sector.

A friend of mine got an even better deal. He worked for an American company that sent him to Europe for a few years. So they kept the salary and got their housing and everything arranged by the company. He loved it so much he didn't want to leave.

Going to Europe with no money is also an adventure, but can be pretty frustrating since you can pretty much say goodbye to FIRE.

[Villanelle]

Are you sure your partner would be able to find work?  As a trailing spouse, make sure you look in to what her visa status would be and whether/under what conditions s/he'd be able to work.

Also, it's so, so difficult to compare salaries when looking at such a drastically different living situation. I will say that my partner and I lived in Europe for 3 years (his work) and it was an incredible experience for people who love travel.  We traveled our asses off and had experiences I only dreamed I might someday get.  It probably set us back slightly financially (in our case not because of a lower salary, but because I wasn't able to work and because we spent a lot on travel), but it was 100% worth it. 

[havregryn]

In the EU it will generally not be a problem to have an open work permit for a partner of someone on a work contract but finding a job might become a challenge with no knowledge of the local language unless your partner is also in tech.

Also something to consider, it is actually really hard to anticipate all of the expenses that turn up related to an international move. We've been in our new country for 17 months now and our spending has still not really normalized to the level we expected (and is realistic assuming day to day life here once actually settled in). There is always something. Luckily my job came with a really generous relocation package, make sure you get that as well.

And another thing, the data on Numbeo on rents in the two HCOL cities we have been based in (Stockholm and Luxembourg) are optimistic to say the least. You are likely to end up paying a lot more than such websites would have you believe. It might be the same for other major cities. Make sure to get first hand information from someone who has local experience and a down to earth world view before making estimates on how much a move is actually going to cost you.

[schneider]

Which country? What job?

Which country: One of those social-democratic northern European countries my mother warned me about. You know the drill: high COL (maybe lower than where I am, maybe not), low unemployment, world-beating quality of life (but people on this forum are mostly going to have a good quality of life anywhere).

What job: what tech folks tend to call "backend stuff", the sort of thing you hear about people at Google making $180K doing (while never seeing their families because they work all the time). This opportunity is a good one because of specific decisions whoever they hire will be responsible for making and specific deliverables that person will be producing, so I'm hoping it will turn my kind-of interesting résumé into a stellar one. That's a major part of the temptation. Otherwise, waiting until we're FI before we did anything big would be the obvious choice. Though, actuarily, we're going to hit FI not too many years before our (currently healthy!) parents require full-time care. I digress.

Are you sure your partner would be able to find work?  As a trailing spouse, make sure you look in to what her visa status would be and whether/under what conditions s/he'd be able to work.

Legally, as havregryn mentioned, it seems like that's a "yes, definitely". But it might be hard to find something for which the qualifications match the job requirements (my partner is not in tech). That, unfortunately, is an unquantifiable risk at this point.

I will say that my partner and I lived in Europe for 3 years (his work) and it was an incredible experience for people who love travel.  We traveled our asses off and had experiences I only dreamed I might someday get. 

This definitely describes us, regardless of whether MMM would approve or not. :) It's basically impossible to put a price tag on life experiences, isn't it? That would tempt us to lean toward taking the plunge and worrying about the consequences later. But, being in tech, there's always the fear of my skills going stale, so every year I don't have to work is a year I don't have to worry about finding work. So I'm trying to think of it as a math problem, even though life totally isn't one.

And another thing, the data on Numbeo on rents in the two HCOL cities we have been based in (Stockholm and Luxembourg) are optimistic to say the least. You are likely to end up paying a lot more than such websites would have you believe. It might be the same for other major cities. Make sure to get first hand information from someone who has local experience and a down to earth world view before making estimates on how much a move is actually going to cost you.

Yikes, I was totally assuming Numbeo was representative! Thanks!

[havregryn]

Which country: One of those social-democratic northern European countries my mother warned me about. You know the drill: high COL (maybe lower than where I am, maybe not), low unemployment, world-beating quality of life (but people on this forum are mostly going to have a good quality of life anywhere).

In all honesty, if you don't have children or a health condition that is expensive to treat you might not get all that many benefits from that kind of a place ;) Also, do some SERIOUS research into job options for partner and evaluate the option in which he/she doesn't work at all from a financial and emotional point of view. If that is a no go...proceed with caution.

Yikes, I was totally assuming Numbeo was representative! Thanks!

It might be representative of the overall situation (i.e. including people with contracts dating back to the 60s) but it is not representative of what to expect as a newcomer. First hand examples. Numbeo wants you to believe that a three bedroom apartment outside of city center in Stockholm rents out for an average of 11 700 sek. We rented out our entirely average two bedroom apartment in a suburb for 15 000 in less than a month and for 12 700 in two days (we were too relaxed about it so in the last minute to avoid having a vacancy and burdening family with viewings we agreed to rent it out for 13 000 which we then lowered another 300 when we couldn't secure a parking spot for the tenants as the building management claimed that it was not possible to rent out a parking space, with or without apartment). 
For Luxembourg, where we had to rent, the numbers are also way too far on the optimistic side. It would have to be one hell of a dump to get a 3 bedroom for 1700€ anywhere within 20km of the city, let alone in it.

[jezsh]

One thing that might be interesting for you to look into is whether expats receive any tax breaks in the country you're looking at. Where I live, expats who earn above a certain salary are eligible for 30% tax-free earnings, which makes an enormous difference. If only I had been eligible when I first moved here!

On the flip side, it might also be worthwhile look into how you'll be taxed whilst living abroad. Somewhere that frustrates me about where I live is that all my savings over 20k are taxed at 4%, regardless of whether they earned any interest. Since your concerns are primarily financial, you'll probably want to know if something like that is lurking around the corner.

Regardless, living abroad will be a life-changing experience. You'll be able to travel at relatively little cost to places you might otherwise not get to see and will also experience an entirely different culture and learn a new way of looking at the world. For me, so long as the salary cut is not too great, that makes the whole thing worthwhile already. In your case, you say there's also a decent chance the move will make you more employable and increase your earning potential in the long run, which is another point in favour of the move.

Of course, there are no guarantees, but it sounds like you've thought things through and would be taking a calculated risk by moving with both potential short-term and long-term benefits to offset the decrease in salary.

[havregryn]

Oh, and also, if you work for a few years and then leave the EU area, you can take a lot of your pension contributions with you but I'm not 100% sure how that works nowadays.  Ask about it if you take the position.

Anyway,  I think you should probably go for it for the experience but be prepared for not being able to save money for a while. It's not the end of the world (even though I shouldn't be talking, it makes me super anxious to go down in income to take parental leave lol) and you can benefit a lot.
Maybe slightly subjective, my main concern would actually be your partner. I can speak from experience only from Sweden but I guess all these countries are alike (but in many objectively measurable ways Sweden is the worst, so the other two are better for sure :D). It is not only difficult to find a suitable job for an educated non-tech immigrant, there is also a lot of folklore involved that feels humiliating. These are socialist countries and they won't let you forget that. Your partner would be expected to sign up with a governmental agency to assist in job search and the overall ambiance there is just soul crushing for someone not used to it. I am pretty sure the only reason we moved was that I was getting seriously depressed by the whole thing and simply had to get out of there.

But, if you resign yourself to low income for a while, your partner can use the opportunity to get some free education. I did another Master in Sweden just to fill the gap as it seemed impossible to find a suitable job and now it is the main driver of my career opportunities.

[schneider]

One thing that might be interesting for you to look into is whether expats receive any tax breaks in the country you're looking at. Where I live, expats who earn above a certain salary are eligible for 30% tax-free earnings, which makes an enormous difference. If only I had been eligible when I first moved here!

On the flip side, it might also be worthwhile look into how you'll be taxed whilst living abroad. Somewhere that frustrates me about where I live is that all my savings over 20k are taxed at 4%, regardless of whether they earned any interest. Since your concerns are primarily financial, you'll probably want to know if something like that is lurking around the corner.

That never occurred to me, thanks for the tip. A quick Google suggests that there's probably not going to be anything like that for me, but I'll definitely ask HR if we get to that point.

In all honesty, if you don't have children or a health condition that is expensive to treat you might not get all that many benefits from that kind of a place ;)

You know, I had noticed that. We are, by US standards, way over on the extreme left end of the spectrum and are generally fine with paying taxes, but paying into a social system we will probably not stick around to get anything out of might be more generous than we can afford.

Maybe slightly subjective, my main concern would actually be your partner. I can speak from experience only from Sweden but I guess all these countries are alike (but in many objectively measurable ways Sweden is the worst, so the other two are better for sure :D). It is not only difficult to find a suitable job for an educated non-tech immigrant, there is also a lot of folklore involved that feels humiliating. These are socialist countries and they won't let you forget that. Your partner would be expected to sign up with a governmental agency to assist in job search and the overall ambiance there is just soul crushing for someone not used to it. I am pretty sure the only reason we moved was that I was getting seriously depressed by the whole thing and simply had to get out of there.

I think that you're completely right about this, at least for our situation, and I appreciate the warning.

Money-wise, I think it is calculated risk with a lot of upside and some small risk of disaster (isn't that how it always goes?), but dragging someone to a country where they can't find a job is another matter entirely; even though we could financially survive being being a one-income household indefinitely, I don't think either of us would be happy without some sort of meaningful work to do. We'll definitely need to do more research on this before we go too much farther.

[havregryn]

You know, I had noticed that. We are, by US standards, way over on the extreme left end of the spectrum and are generally fine with paying taxes, but paying into a social system we will probably not stick around to get anything out of might be more generous than we can afford.

I used to be quite a socialist. After experiencing Sweden I am not so sure lol. I still believe we should help the unfortunate and not everything can be determined by the free market but I think that the only way to design effective policy is to be slightly cynical about human nature.

As for partner, it will be a difficult decision to make. I don't want to discourage you as just as it can turn out awful it can turn out great. It's probably in any case worth giving it a shot if you can relatively easily return to where you were or migrate elsewhere. Your partner might not be able to find a job but on the other hand mind get a taste of what early retirement would be like. That is my one biggest regret about my time in Sweden - not seeing it as a rehearsal for not having to work but thinking only about me never having meaningful work again and being forever doomed and useless at age 30.
It was a stupid assumption but at the time it felt real. So instead of doing the most out of my free time (as husband made more than enough to live on and we owned our place there with relatively low debt on it which with their interest rates cost peanuts) I just wasted time growing increasingly depressed. Then after taking the least bit of an effort to actually put myself out there I got offered a phenomenal job in Luxembourg (as I have skills and experience that are worth a lot pretty much everywhere except in Scandinavia and the only reason I ever set foot there was because I am married to a native) so we moved. Ironically now it is the husband who'd rather die than return to his little communist homeland, while I am ambivalent to a degree. While it is beyond any doubt that my professional and financial future is a lot brighter here (or pretty much anywhere) than there, in retrospect I regret not seeing it as a challenge and beating the system as opposed to just running away from it, all the while enjoying all the good stuff they have to offer (I do have kids and I will NEVER get over their childcare system).

[schneider]

An update for posterity's sake: I did get an offer, but we couldn't come to terms.

A few lessons I learned:

• If your goal is to accumulate enough dollars to be financially independent, it doesn't appear that there's any country in the world that's remotely competitive with the USA if you're in tech (or some other field where six-figure incomes are not considered extremely rare), if you are frugal already, and if you can live with our healthcare system. Research suggests that the offer I received was very competitive by regional standards, and it was roughly in line with a good entry-level job in the city I live in; I've researched this some for other European countries and found roughly the same. Given how hard it is to get an H1-B and how many people go through the hassle, this shouldn't really be a surprise. I think that MMM had a blog post somewhere about how cheap the USA is, if you do it right (most people obviously don't), but I can't find it now.
• My impression is that the median person living in Northern Europe has a lifestyle that is one heck of a lot more mustachian than the median person living in the USA. (The fact that there are state pensions and socialized healthcare makes the financial side of things extremely hard to compare.) I would also guess that earning a median salary over there is a lot less stressful than here! If you're young, single (or a parent!), making under — I dunno — $60K(?), and are curious, you should check it out. (And if you have an expensive long-term health problem, I hope you’re gone already.)
• Probably, I would have taken the job offer even though it would have been a major pay cut if my partner had been able to work remotely, or if we had been able to really convince ourselves that it would not have been hard to find a new job in a new country. In our case, we decided we could live with being a one-income household indefinitely if my salary were above $X. I would guess that's the best any couple could do; managing multiple careers is a really hard problem.

Thanks to everyone for the input; it was really helpful.