Cash Cushion, Career Conundrum at 25 years old

[quarterlifecrisis94]

Cash Cushion, Career Conundrum - Holding onto a career and a commute that I don't find sustainable but is a path to FI.

Life Situation: Single, 25 years old, live with parents in NYC area

Gross Salary/Wages: $85,000

Pre-Tax Deductions in 2020:
401k:               $19,500
Traditional IRA:   $6,000
HSA:                  $3,550
Mass Transit:      $2,160
Medical & Dental:   $390

Adjusted Gross Income: $53,400

Taxes:
FICA:     $6,500
State:    $3,000
Federal: $5,000

Current expenses (per year):
Gym Membership:    $252
Train Pass:            $2,480   ($310 a month with $270 deductible but only 8 months for quarantine)
Subway Fare:        $1,200
Healthcare:              $390
Discretionary:      $12,000 (~$1,000 month depending on travel and when there's no quarantine)

Assets:
Pre-Tax 401k:       $6,000
Traditional IRA:   $18,000
Roth IRA:            $19,500
CDs:                   $70,000 (2.2% average rate)
Car:                      $9,000 (paid off 2 years ago)
Inheritance:       $150,000 (incoming one time check)
HSA:                     $1,000

Liabilities:
Credit Card (Sapphire Reserve and Freedom Unlimited) that I pay off in full every month

Specific Question(s): How does career happiness fit into the FIRE equation and which is my best option? I never went into my first job thinking I would stay in this career. After 3 previous jobs and 3 sabbaticals (1 granted, 2 self created) within 4 years, I finally feel like the career is just good enough. I have great coworkers and good projected growth, but I am still struggling to convince myself that this career is for me. I always intended to go back to school for a JD/MBA hence why I only contributed to my IRAs and saved cash (401k contributions here and there) in my first 3 years working. I went to a state school for undergrad with no debt incurred when I had better options which always made a graduate degree an ego need. Now, resetting my net worth and potentially working more hours sounds like the last thing I need now. Still, I fear this career isn't my true calling and I will only be mediocre at it (hurting my earning potential). I lived on my own for a year and half and feel like the moment I move out again, the more I have to commit to this career and will not be able to save much more than my pre-tax contributions (rent on my own will be at least $1,700 a month). On my own, I felt like I was truly living my life but it also felt like a hamster wheel. I see marriage and kids getting in the way of the flexibility I currently have and it's why I'm anxious to figure this out now.

A family member recently died so I have another $150,000 of cash on the way. Especially with what I think will be a second leg of market decline, I really want to put the $150,000 and another $30,000 into a taxable brokerage in 2020. I could move to a cheaper market with this job and a similar income but I am afraid any move further pigeon holes me. Part of me wants to career change, stay at home, and open my own business with this cash. I am relatively new to the FIRE community and it sounds like a career is simply a vehicle to get to FI and not something that is to be enjoyed which is where I am right now. Thus, I am starting to think I should hold on, live at home as long as I can, and sprint toward financial independence, but I also see the merits to a fulfilling career. I see my options as:
1. Keep living at home with this job and stacking money until I either commit to the career and move out or move away from the career.
2. Move to a cheaper market with the job right now to fully live my life right now and only slightly increase my expenses ($1,300 a month rent, no state income taxes, minimal commuting costs).
3. Pivot to a different career and make less money while living at home.

[marty998]

$85,000 is a good wage for a 25 year old. I'm betting the NY job market is a lot like Sydney at the moment - lots of expats returning home and taking a job 1 or 2 rungs beneath their worth, just to tide them through. It's makes switching a little more difficult because you'll be competing with a lot of people a lot more qualified and experienced than you are.

So I'd say now isn't really the best time to be job hopping, especially if you have already have some sort of job security.

I felt the same way as you did at 25 - I had job hopped a bit and I was never going to become a CFO but you know what? Almost 10 years later with the same company I've more than doubled my salary from that age. You can still have a successful career without reaching the top, provided you find something you like doing.

I would advise against living at home for much longer. Even if it's a lot more expensive and delays your FIRE goals, I don't see how living with parents as an adult helps you become an independent adult. You'll always be a kid to them, and they'll always treat you as such.

An MBA is generally always a good thing to have. I would not advise against this, but I'd suggest it makes more sense to do when you have a bit more work experience behind you. No middle manager like me respects a hot shot 25 year old trying to dazzle them with corporate bullshit speak. But then again, you've probably got your sights set higher than us :)

[ysette9]

From what I’ve gathered MBAs have the best ROI if they are done when you are 10+ years into your career and when you got to a top school. Otherwise they are a dime a dozen.

Do you have a good idea of what you would like to do? I don’t get that sense from what you have written. I agree with others that hanging on to what you have right now is valuable in uncertain times. Especially right now if you can keep plowing $ into the stock market during a dip that will reap such amazing benefits later down the road. The crash of 2007/08 happened when I was in my early 20s and I’m FIREd today at 38 in part because I just kept steadily investing when others were panicking.

If available to you, working for a large company may be a good path to take. I did most of my career at a big company that let me rotate jobs every few years. Part of that I was in a formal leadership development program and for the rest of it I just worked with mentors to keep my career developing. It is much easier to find new positions within a company than to hop companies. That could help you explore and find a better fit while maintaining the stability of salary and benefits. I also got my big company to pay for my masters, saving me at least $75k.

You are obviously in a good position to save while living at home right now, but I agree you need to limit that and live your own life. I’d recommend setting yourself a deadline. Maybe you move out in 6 or 12 months and in the interim invest as much as humanly possible?

Good luck. These aren’t easy questions.

[Viking Thor]

Mba is definitely an early career thing. 10+ years in career accomplishment far outweighs the MBA.

I have an MBA and It worked for me but it's not always the best option.

I think it gets you in the door at major companies at a moderate level. If you have 10+ years experience you should already be at that level unless changing from totally different career.

[mistymoney]

the first thing you need to figure out is if you want financial independence, or the "ego need" of the JD/MBA.

You are in an excellent position to do either right now. But going down the education path may take up a lot of the money you currently have.

Is it worth it? You might find that after the education and getting into your desired job - it is just another hamster wheel. Maybe a nicer one, maybe a larger one, but work is still work. Even if you do your own business, it's still work.

Determine what you really want.

[wellactually]

I think you have a lot more options than the three you listed.

It worries me that you've been in the workforce for 4 years and felt enough dissatisfaction that you've changed jobs 3 times and taken 3 sabbaticals. That is certainly not a sustainable way to live your life. (Saying this as someone who worked at a job they *hated* for three extra years because the stability and health insurance was hard to let go of).

You shouldn't be making yourself miserable for X years just for FIRE, in my opinion. Especially when you seem positioned to make many other positive choices. You indicate you would be interested in marriage and children in the future. So anticipating how long you need to work is difficult right now when so much of how your life would look in retirement up in the air. That makes sticking it out in a bad job situation even more difficult because you don't really know what the finish line is.

I would advise you to think through what you like about your actual job responsibilities and what functions you wish you didn't have to do. Think about what you dislike about the setup of the job. Is the commute a big part of it or the culture of your organization or the work life balance, etc.

Are you open to moving for a different job? Do you have a connection to any other parts of the country or world which would help make a move easier? Could you tap back into your undergraduate network and put in a little time investigating opportunities and contacts available there? As you thought about what you actually like in your current role, consider what jobs or companies would allow you to do more of that and less of the things you dislike.

You are 25 with no debt and a ton of cash and no lease; you have tons of options.

[schoenbauer]

my 2 cents:

1. don't underestimate the psychological health risk staying in a dissatisfying job brings along. Nothing is won if your social life suffers, if you are mentally stressed or even slide in a depression just to FIRE earlier. For most people life quality is still more important than FIRE.
2. move out, it will be good for your personal development. I moved out too late (with on and offs at 26) from my parents and it has had an impact on me (uncritically copying their behaviours, etc.).

[LightStache]

I finally feel like the career is just good enough. I have great coworkers and good projected growth, but I am still struggling to convince myself that this career is for me.

Unfortunately most people are not engaged at work yet we are brought up in a "follow your passion" culture with celeb entrepreneurs talking about how "it doesn't feel like work." But it's really the attitude they bring to work, not the nature of the work itself, that makes them so successful. So there's this expectation that we are supposed to be passionate and fulfilled by our work even though most people aren't.

After trying three supposedly cool careers by 30, and not being fulfilled by any of them, I'm convinced that my job dissatisfaction is actually me, not the specific career. So I'm trying to work on acceptance and positivity. Maybe this applies to you too.

I always intended to go back to school for a JD/MBA hence why I only contributed to my IRAs and saved cash (401k contributions here and there) in my first 3 years working. Now, resetting my net worth and potentially working more hours sounds like the last thing I need now.

Well plans change because people change. If you're worried about working more hours, a JD is not the way to go.

I lived on my own for a year and half and feel like the moment I move out again, the more I have to commit to this career and will not be able to save much more than my pre-tax contributions (rent on my own will be at least $1,700 a month). On my own, I felt like I was truly living my life but it also felt like a hamster wheel. I see marriage and kids getting in the way of the flexibility I currently have and it's why I'm anxious to figure this out now.

That is not rational thinking. There is no relationship between your career and housing status. Also you don't need to commit to a career -- they tend to change and evolve over time. Lighten up on the FIRE stuff if it's causing you angst.