Author Topic: Should I take a lower-paying job in a more volatile industry?  (Read 1130 times)

monstermonster

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I thought I would get the mustachian perspective on my current dilemma, as lots of people over at OMD have given some insight, but I think the more ER focused people might have different thoughts.

The simple question: Should I take a lower paying job in a more volatile industry?

Life Situation: Single, No dependents, 32 y/o, Oregon

INCOME: ~$69,400 working 3 jobs


Job #1 FT at $50,000 per year (20 days PTO/sick/holiday, 3% employer 401K contribution)

Job #2 is salaried at  $14,400 per year for 15 hours a week of work. (4 weeks of PTO, $200 per month health insurance reimbursement, State-run Roth IRA with no match, donít use it as it has high expense ratio)

Job #3: I run a business that grossed $35,000 last year, but last year I was working on it full-time. Now itís just a side hustle. This year it will probably gross about ~$15,000, but I will take home only about $5,000 as I am paying a lot of contractors. It does pay for a lot of my expenses, like phone, computer, camera, etc.

Adjusted Gross Income: Well, last year I got it all the way down to $6,743 AGI thanks to a traditional IRA, health care tax credit, saverís credit, business deductions, and moreÖ so maybe AGI isnít the best thing to ask here ;)

Taxes: State is around 7.45% effective tax rate.  How much my taxes are federally depends on income.

Current expenses: $18,000-$20,000 per year, give or take health care and travel. Full list here:

Household & Insurance Ė $8,389
 ē   Rent: $7,555 ($615 per month) I have a lease with a locked in rate through the end of November 2020, so this is pretty set.
 ē   Water, Commons, Sewer: $330 ($27.50 per month, level billing)
 ē   Trash: $90 ($7.50 per month, level billing)
 ē   Electricity: $396 ($33 per month average) This includes higher average bill in summer due to portable AC unit.
 ē   Renterís Insurance: $156 ($13 saved monthly in sinking funds)
 ē   Household Items (detergent, TP, toothpaste, razors, etc): $132  ($11 per month average)

Health Care: $960 - $2,400 depending on federal subsidy, etc.

Food & Coffee for Home Ė $1,830 ($152 per month) This was only $100 average in 2019, but I traveled for a 1/4 of the year.

Transport: $170 Bike tune up, local transit

Figure Skating: $2,606 Iím a competitive figure skater and this sport is hella expense. But also Iím really good and some people pay $217 per month for a gym membership and even more for therapy so fuck it.
Looking Good: $832 Haircuts, Makeup, Skin Care, Clothing
Food & Drink Out: $300 When I travel, I eat out but that is either covered by the business or in the work travel.
Giving/Gifts: $1,000 Charitable donations, weddings, birthdays
Flotsam: $450 Entertainment, Camping, Spending Money
Travel:  $2,115 I go to about 4-13 countries a year, pretty good at travel hacking and budget travel.

Assets: Current NW is $35,000, give or take a market hit, combination of cash and Roth IRA/Traditional IRA/SEP 401K. I am not counting my business as an asset but it does have inventory and resale value.

Liabilities: $0, other than credit cards I pay off each month.

Specific Question(s):

Currently I work three jobs: one in a creative field I enjoy in a small nonprofit (15 hours a week), one in a 20-person company doing database work (full time, billed hours), and I run my own small business related to my creative job (about ~10-15 hours a week).

My nonprofit creative job has asked me to go full-time, flexible on when that would happen, and I infinitely enjoy the work there more than the work at the database job. Should I take it?!?

HOWEVER, the database job is pretty recession-proof, and the work is fine, but not *exciting*. I am allowed to work remote 36 hours a week, though I do have a high billable hours requirement. I get nice things, like a work laptop and free transit (though I donít really use it since I bike to work).

I love the nonprofit creative job and would love to do it full-time. Itís stressful, but in a way I thrive on. That being said, itís for a nonprofit and in the media industry. Neither of which are very recession proof or stable.

If I leave the database job and move to the creative job full time, it would represent a $10K pay cut (from $50K to $40K), plus losing access to an employer retirement contribution of 3% ($1,500 per year).

It would also represent an even bigger loss in immediate savings because I'd no longer be working 3 jobs (but also I might get to do fun stuff and see friends again that would be nice.) I am currently saving about 69% of my take-home income as my income is currently very high between the three jobs. Iím working too many hours though (averaging 66-72 a week), and I canít do this forever.

My big savings goals right now, other than trying to catch up on retirement contributions while the market is down (at least 20% of gross income), is putting about $25,000 in cash away for a possible year-long trip in 2021 - or for doing a masters abroad in London. Essentially, I want a massive cash cushion for ~life choices~.

Not planning on ER, just FI. This significantly slows down my savings timeline and moves me into a more volatile industry.  Like the chances that the organization has the budget to up my wages is extremely unlikely, as some staff are currently paid $14/hr. I'd be the second highest paid out of 8 staff.

But I could possibly gain more experience to stepping stone to a better paying position if I was willing to move out of Portland (most of the better paying jobs are in NYC and LA). The job is also, more fun? Like stressful but fun?

Halp?
« Last Edit: March 10, 2020, 06:27:19 PM by monstermonster »

former player

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Re: Should I take a lower-paying job in a more volatile industry?
« Reply #1 on: March 10, 2020, 06:46:10 PM »
If you want to leave the database job, rather than go to employment that pays less why don't you work full time on your own business, which would pay you much the same and have a bigger future upside in terms of room to grow and create profits/capital?

monstermonster

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Re: Should I take a lower-paying job in a more volatile industry?
« Reply #2 on: March 10, 2020, 06:48:13 PM »
If you want to leave the database job, rather than go to employment that pays less why don't you work full time on your own business, which would pay you much the same and have a bigger future upside in terms of room to grow and create profits/capital?
I worked full-time on my business last year, and I didn't like the lifestyle of being a FT entrepreneur. Not having coworkers, a commute, the volatility of income, etc. I ended up wanting a job just for lifestyle reasons.  I like it better as a side hustle than as a FT income.

**it also doesn't pay me the same. I GROSSED $35K, but I have high COGS. So I took home much less.

FINate

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Re: Should I take a lower-paying job in a more volatile industry?
« Reply #3 on: March 10, 2020, 09:30:01 PM »
In the world of finance volatility == risk, and a premium is required to compensate for taking on more risk. Taking a pay cut for increased risk is moving in the wrong direction. But maybe this is just me. I was pretty mercenary when it came to paid employment. For me a job/career wasn't about enjoyment or fulfillment but rather a means to FIRE ASAP. YMMV if you have a different expectations.

monstermonster

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Re: Should I take a lower-paying job in a more volatile industry?
« Reply #4 on: March 10, 2020, 10:42:37 PM »
For me a job/career wasn't about enjoyment or fulfillment but rather a means to FIRE ASAP. YMMV if you have a different expectations.
I donít see any point in FIREing ASAP if my goals in fire are the same as my goals in paid employment - make educational  media that helps people and travel. Iíve seen far too many burnt out lawyers and engineers race towards FIRE and then get to the other side and ?? Blog? Podcast? Volunteer to teach homeless youth finance? Travel and vlog about it? Aka All the things I do for my job?

FINate

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Re: Should I take a lower-paying job in a more volatile industry?
« Reply #5 on: March 10, 2020, 10:46:22 PM »
For me a job/career wasn't about enjoyment or fulfillment but rather a means to FIRE ASAP. YMMV if you have a different expectations.
I donít see any point in FIREing ASAP if my goals in fire are the same as my goals in paid employment - make educational  media that helps people and travel. Iíve seen far too many burnt out lawyers and engineers race towards FIRE and then get to the other side and ?? Blog? Podcast? Volunteer to teach homeless youth finance? Travel and vlog about it? Aka All the things I do for my job?

Well there you go, sound like you have your answer :) As long as you can smooth out the volatility, e.g. you have enough savings to ride out a recession or period of unemployment then you should be fine.