Learning, Sharing, and Teaching > Case Studies
Wanting a Change
Mr. Freedom:
I guess I’m generally looking for some input or guidance on things to consider on my situation that may be I’m missing or haven’t thought of.
I apologize, I think my topic might be more appropriate for the Ask a Mustachian section. My focus is probably more on job change-related matters as opposed to questions about financial management in multiple areas.
Like some other people on here, I really hate my job. I’ve been married for over 15 years and have two school-aged kids. I’ve been working at a large healthcare organization for over 10 years. I went into the field to do direct patient care and found that the only way to get more money was to go into management. I stumbled upon that reality when I asked for a raise several years ago after a program they had me create really took off. They presented me with a manager’s position that still had clinical responsibilities and having had a very young family at the time and a mortgage, I went with it.
About 4 years ago I was promoted into a director’s role which happened unexpectedly in the wake of some disruptive events with staffing. The pay increase that went along with the promotion was substantially more money than I ever expected to earn in this field, but the role is not anything that I ever wanted to do at all. It really was a major crisis for me at the time. I did not see an alternative for a different career at the time and I wanted to maintain an income and health insurance for my family without interruption, so again I went with it.
I’m four years in now and in many ways it has proved to be even more stressful than what I thought it would be. I am no longer involved in direct patient care, nor do I ever want to be again. I generally believe that while I was interested in aspects of this field going into it, I probably am much better suited to doing something like accounting. Working with budgets is probably the most interesting and intrinsically rewarding aspect of the job, but it is a relatively small part. At this point, I couldn’t care less about the rest and don’t identify with my job. So I wouldn’t want to leave this job to do anything else within the same field or anything that involved management.
A lot has happened and there has been tremendous growth in all of the departments that roll up under me over the past 4 years. I’ve had multiple departments roll up under me and have had as high as the mid-50’s for a direct report count. That is now down to just over 20 with some recent promotions of managers underneath me, but 20 is still too many for what is expected of my role which is supposed to be a “manager of mangers” instead of having an additional throng of frontline providers.
There is also so much government involvement/regulation at the state and federal level for this field. That's a major source of stress. There’s also a great deal of role confusion for me. There wasn’t much in place as the person before me had a hard time in this position and I quickly found all the HR-type responsibilities for the large number of direct reports I had and just day-to-day problems that come up in multiple departments has consumed most of my time. There was no useful orientation or mentoring for me to be in this role and with the high volume of work coming at me on day one from multiple directions, there is now so much that has accumulated that is not finished and that really looms over my head. That probably generates some of the most intense stress related to the job. Just about every day brings new significant problems and projects too.
It really feels like each day there is just another day to get through. I would love to resign. I fantasize about it quite a bit. It’s the golden handcuff thing though. I can’t see making anywhere close to this much money doing something else near-term. But I know I do want to leave this field in general.
Continuing there is helping me to pay down debt at an accelerated rate and continue to have a relatively high savings rate; however, the costs are that I truly dread going to work essentially every day and have many weekends and evenings that are ruined due to projects with deadlines that require time and effort that can’t be contained to work hours during the week. I frequently experience extended periods where I have persistent early morning awakening (e.g., 3:30 AM) and can’t fall back asleep and I know it is work stress-related. Despite this, I remain functional although much less than optimal. So I am asking myself is the money really worth this? If so, for how much longer?
Late last year I started to get acquainted with principles of FIRE and for really all of 2018 I’ve been persistently pursuing it with no real setbacks. I’ve coached my wife on FIRE and she is fully on board and wants the same thing. We are in the same field and both have advanced degrees. I managed to get through all the schooling without debt whereas she had quite a lot. She has started in a role similar to mine with one department and a much smaller staff at another organization earlier this year and she really hates it too.
Financial specifics:
• Our taxable income for this past year was a little over $200,000. I’ve gotten some larger bonuses in the past 2 to 3 years which have helped but with what is going on in healthcare I’m not sure if that will continue. Her income has increased this year with her promotion which is a good thing. She is just about but not quite full-time which works for having school-aged kids.
• Mortgage is currently at $163,000 with a tad over 15 years left on it. Our house is valued at around $530,000. Monthly payments are a little under $1,200. I’ve made a lot of pre-payments since learning about FIRE. This year alone I put an extra $60,000 toward the principle. It was apparent under the new tax law that I would no longer be able to deduct the mortgage interest. Interest rate is 3.375%. It is rewarding to see how much more of our regular monthly payments are now going toward principle.
• Wife still has about $84,000 of student loan debt which she racked up before we were married with an interest rate that is slightly lower than the mortgage interest rate. Her monthly payments are currently $640, but that is on a graduated schedule that increases every 2 years with the top payments in a few years being over $1,000 before the loan is paid off. We would continue to focus on paying down the mortgage first before doing any pre-payments on the student loan.
• No other debt – we never carry any credit card debt.
• UTMA account for each kid $33k+ each.
• Investments (all index fund portfolio: 401k’s, Roth IRA’s and Taxable account) approximately $740,000. We both contribute to our 401ks throughout the year. I get a small company match, she does not.
• Current cash $27,000. I’m considering suspending mortgage pre-payments and focusing on building up cash reserves for now. I do have access to a home equity line of credit in the event of an emergency and otherwise have a plan for which investments to sell first if the need for cash arose abruptly.
* Health Insurance: I use a high deductible plan through work that is tied to a Health Savings Account. I do pay for medical expenses with those pre-tax dollars throughout the year and typically use it all.
*
So far this year, our savings rate has hovered between 47% and 50%. We've never been wasteful spenders, but I'm amazed at how we're doing now with having two kids. I’m hoping our expenses can go even a little lower for the remainder of the year. Here are some of the changes I made this year that have helped increase our savings rate:
• Changed from satellite to a streaming service
• Dropped a health club membership we weren’t using
• Groceries – stopped going to a more conveniently located but more expensive chain in favor of a using a blend of Costco for meats, Aldi and Walmart Grocery pick-up with 3% rewards. Takes more planning but we’re seeing a major monthly savings with this.
• I really dodged a bullet with my transportation. I was very close to buying a new SUV late last year but after learning about FIRE, I decided to keep driving my soon-to-be 14-year-old car which has been unbelievably solid. I bought it outright back in late 2004. I’ve always purchased my cars with no loans. I’m so glad I didn’t go with the new car and, in fact, I know now that I will never buy new again.
• Hypermiling for me and my wife – more significant monthly savings.
• I’ve dropped a relatively expensive hobby all together and have sold a lot of my stuff for that hobby on the internet for an additional several thousand dollars and have more to sell yet as kind of a current side hustle. I am totally fine with dropping this hobby given our lifestyle change.
• I have taken a lunch to work all year and generally our family eats out (usually with deals on fast food) just once a week as a treat. Lots of savings there.
• I’ve run the house in a much more energy efficient manner and have saved hundreds of dollars that way too so far this year.
• I now do lots of DIY around the house and that has saved a few thousand so far as well.
I am very fortunate in that I’ll be getting an inheritance probably before the end of the year which could probably take care of most or all of the balance of my mortgage if I wanted to use it that way. I have slowed down on making pre-payments to the mortgage in recent weeks to start to shore up cash reserves as I’ve started thinking more about what to do about my job. On the one hand, I would love to get rid of my mortgage and erase that monthly expense. Alternatively, I might consider using some of the inheritance to pay for schooling to do something else like accounting or even to have a buffer while I perhaps apply for other jobs I might consider. Sometimes I even think about being in a trade like carpentry or something like that – something more hands on. I’d also like to continue to explore some other way to be self-employed if that would be possible. I want to learn about investing in multi-family real estate and things of that nature for passive income.
I anticipate another decent inheritance of a few hundred thousand dollars probably sometime in the next 5 to 10 years. I’m not banking on that for anything, but the likelihood of it happening is high.
I’m accepting that I will most likely continue to do some kind of work for the rest of my life because I want to stay engaged and continue to have a stream of income. I don’t expect that to somehow be a dream job, but just something I find more tolerable that feels less like mandatory work and doesn't spill over into detracting from the rest of my life. I just need to figure out what kind of work that would be.
I’m so grateful for what I’ve learned on MMM’s blog and on this forum, which has helped me to make a permanent lifestyle change for the better.
Again, I’d appreciate input or guidance.
Thank you!
FrugalFisherman10:
To be honest, as I was reading the first couple paragraphs of your situation (the level of stress it causes you, the title "Director", the number of people reporting to you, the field being 'healthcare'), then I get down to your income numbers...I expected you to say your income number was MUCH higher. I don't mean that to put you down, but to perhaps pull your head above the waves a bit and help you know what you sound like.
you sound like you are in some sort of position that should pay you even more.
Perhaps you're not..perhaps the field you are in only pays as much as your making for your type of role. And it's just that this type of position stresses you out this much. That's ok - maybe you're not the type who excels while managing people, and therefore you're hitting the nail on the head..you should move into accounting/finance and do some number stuff, with less people management. If that would give you some more breathing room and you think you would enjoy it, go for it!
There's plenty of money to be made in other fields (accounting/finance) by the way . The following may be true, but long term you will be fine:
--- Quote --- I can’t see making anywhere close to this much money doing something else near-term.
--- End quote ---
second caveat: Perhaps I've just been jaded by reading some of the HCOL case studies on here recently where people are pulling down $300k+ each year, with both spouses making crazy money, etc. So I don't think you should compare yourself to them (they get to take home a lot less if the spending/costs are high in their area).
Are you in a HCOL area or a low cost?
---
Also, if you like working with 'budgets'...look for jobs more in "Finance". Finance is the key word there..not accounting. Accounting will have you looking backwards, as in accounting for the stuff that happened already (potentially that means Journal Entries, Reconciliations). Finance on the other hand is forward-looking, i.e. budgeting for what's going to happen. Perhaps not a huge distinction, and you would enjoy either one. Source: I work in "finance" in a budgeting position. My two degrees are in accounting.
RWD:
--- Quote from: Mr. Freedom on June 20, 2018, 05:32:31 AM ---This year alone I put an extra $60,000 toward the principle. [...] Interest rate is 3.375%.
--- End quote ---
Your interest rate is super low and you should focus on investing more instead of making extra principal payments. See the Investment Order post.
With the amount you have invested you already have FU money. Trying to change careers at this point is pretty low [financial] risk, high [mental] reward. Go for it!
Mr. Freedom:
Thanks for your perspective FrugalFisherman10. No offense taken on our earnings. To be more specific, I am in the Behavioral Healthcare division of a very large healthcare organization so salaries overall there are relatively lower. So that probably largely accounts for it as there's supposedly value to a larger healthcare organization to offer behavioral health for medical cost offset purposes, but it is not directly a big moneymaker for the organization by any stretch. My salary is proportionally higher than all those who report to me and I'm actually pretty close to the mid-point of my pay range. My wife was also working fewer hours last year and she did get the promotion at the start of this year so actually we should be doing even better this year now that I think about it.
Also, for the geographic location I'm working in, we're about 3% lower than the national average for cost of living.
Thanks for the guidance on looking more generally in "finance." I appreciate the encouragement as far as earnings potential in another field. I was considering possibly pursuing education in accounting in some cost-efficient way like through Western Governors University online. You mentioned you have two degrees in accounting and work in finance. I was reading some job satisfaction survey articles and finance/accounting was I think at the top of the list. I was wondering how you like it and how well it fits with enjoying the rest of your life? I'd appreciate other thoughts or guidance you might have on possibly transitioning into finance based on your experience. Thanks again for taking the time to respond to my post.
Mr. Freedom:
Thanks RWD for your input on the mortgage pre-payments vs. invest issue and I appreciate the "Investing Order" resource. I was back and forth on that issue of paying it down, reading many FIRE vignettes of those who knew it'd probably be better to invest but still paid it off just for the sense of financial freedom it may provide. I think I am going to do what you recommended there though and shift of off additional pre-payments, especially now that I am looking at perhaps changing careers. It's nice because I don't regret the pre-payment on the mortgage. It's just psychologically nice to know it's gone from 24 years to 15 and to see monthly how much more is going toward principal versus interest.
Thanks too on the assessment of already having FU money and the encouragement that a career change is possible relative to the risks involved for where I'm at. That is what I'm going to focus on here moving forward. Thank you!
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