Author Topic: Should I take the job?  (Read 4030 times)

sb_NoVA

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Should I take the job?
« on: April 19, 2015, 07:52:47 PM »
Current job:  15 miles from home (40-45 mins commute), 110k salary, 3% 401k match, HSA plan, no employer contribution, 26 days paid time off

New job offered:  22 miles from home (60 mins commute and $1 toll), 120k salary, 12% 401k match, $600 HSA employer contribution, 21 days paid time off

I know benefits are not the only thing when considering jobs, but if MMM community could assume that both jobs are same and decision had to be solely based on the factors outlined above, what would you suggest?  I can't relocate and extra 20-25 mins commute does bother me a bit.

About me: 
Primary residence:  $250k paid off condo
Investment residence:  $500k house rented at $2300/m.  $300k loan outstanding; therefore $200k equity
Stash:  $250k
Single, Age 30.
« Last Edit: April 19, 2015, 07:55:59 PM by sb_NoVA »

Zinsch

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Re: Should I take the job?
« Reply #1 on: April 19, 2015, 08:01:37 PM »
Given that your net worth is 700k, I'd say you should make the decision as if the two jobs were paying exactly the same.
Thus, the shorter commute and one more week off wins.
« Last Edit: April 19, 2015, 08:03:27 PM by Zinsch »

sb_NoVA

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Re: Should I take the job?
« Reply #2 on: April 19, 2015, 08:10:15 PM »
How do you rate 12% 401k match vs. 3% at present employer?

Given that I am single and have no dependents, I end up paying lot of money in taxes.  I was thinking that this extra 8% difference would make a lot of difference in helping me get to FIRE sooner.  Regardless of how frugal I get, it's a challenge to save extra 8% after tax. 

Cococola

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Re: Should I take the job?
« Reply #3 on: April 19, 2015, 09:05:13 PM »
Factor in the extra commuting time all year, 5 days less vacation, and see whether it's worth the extra 10k and 8% extra matching,

mxt0133

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Re: Should I take the job?
« Reply #4 on: April 19, 2015, 09:23:10 PM »
If pay were equal which job would you prefer?   I would start with that and try to convince yourself why you wouldn't take it.  Just because mathematically right now one job pays more now which do you see yourself enjoying and possibly having more growth opportunities at?  Which one will expand your skill and make you marketable in the future?

Plus you haven't told us your FIRE plans, which could have a significant impact on your decision criteria.  If you plan on FIREing in a few years then the risk of a new job might not be worth it.  But if you have a longer time horizon and plan to start a family then the new job, if it had higher growth potential might be the better option in the long run.

We need more details to consider.

Zinsch

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Re: Should I take the job?
« Reply #5 on: April 19, 2015, 09:37:30 PM »
I was thinking that this extra 8% difference would make a lot of difference in helping me get to FIRE sooner.
How much do you want for FIRE? You have to realize that you already have quite a lot of wealth. If you'd use your stash to pay the debt (not saying that's smart or possible, just for illustration, and yes, there is a 50k difference), then you would live rent free with a 2,300 income every month.

sb_NoVA

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Re: Should I take the job?
« Reply #6 on: April 21, 2015, 08:11:46 PM »
I made a few mistakes.   Most of my savings is in 529 plans (stupid I know - facepunch).  So, let's assume my 250k stash comprises of 150k 401k, 10k roth, and 90k 529 plan.  I don't really have anything in taxable accounts - I paid off my condo aggressively.   For emergencies, I have heloc on both my condo and investment property.  So, even though that net worth number looks high at 700k, most of it is locked away rather intangibly.  I won't prepay my mortgage on investment property 300k@3.35%/30year. 

My annual expense are about 40k (high for 1 person, mostly spent eating out on weekdays - I'm working on reducing these) 

So, that really sums up my position.  I'd like to FIRE after I accumulate about $1M net worth.  But I do plan to do some part - time freelance consulting work for 2-3 months in an year so that should help me get by if my taxable account stash is low when I FIRE.

Sent from my SAMSUNG-SGH-I337 using Tapatalk


mandy_2002

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Re: Should I take the job?
« Reply #7 on: April 22, 2015, 11:22:37 AM »
What is the reason for the impossible relocation?  I assumed you had kids in school when you said that, but this doesn't seem to be the case.  Did your condo fall in value and you're waiting for it to come back up?  Are both of your work areas (current and potential future) far greater cost of living, or in very bad parts of town?  If not, it seems like more of a mental block, since the condo is paid off. 

I just moved 5 miles closer to work, and it is fantastic.  Luckily my commute has always been cross traffic (driving away from the city, while everyone else is driving towards it), but when a back-up occurs in my direction, it's typically right after my new exit.  I love it. 

sb_NoVA

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Re: Should I take the job?
« Reply #8 on: April 22, 2015, 02:04:10 PM »
"Are both of your work areas (current and potential future) far greater cost of living, or in very bad parts of town?  If not, it seems like more of a mental block, since the condo is paid off."

This is the reason.  Current condo is 250k, if I tried to move closer to present job, it would cost me $450k for 2 bd/bath or $550k for similar place near potential future job.  Also, present condo is perfect place to FIRE, property taxes are low, condo fees are very reasonable, and schools are excellent (in case I have children in the future).  The location is off of the edge of a major metropolitan area, part-urban / part-rural and close to an airport.  Grocery store is walking/biking distance as well.


Also, the reason I have 90k in 529 plans is because I always planned to do an MBA at some point.  I am no longer interested in doing that.  I should have instead put that money in Roth IRA, but bygones are bygones.  I figure I'd just have to let it sit for now.  Maybe when I FIRE, I'd go back to community college to learn carpentry or something with that money.
« Last Edit: April 22, 2015, 02:09:54 PM by sb_NoVA »

mm1970

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Re: Should I take the job?
« Reply #9 on: April 22, 2015, 04:03:08 PM »
Gain:
+$10k salary
+$600 HSA
+ 401k match(sorry, I can't do that math, I don't get a match)

Total gains $10,600 + 401k

Losses:
-$2116 one week vacation (at your current salary)
-$239 for tolls (or is that just one way?)
-$6319 commute time (30 minutes a day, times 239 work days a year, times your current hourly rate)
- extra gas for the commute

Result:
+$1926 plus 401k minus gas
after taxes, less than that

I dunno, is it worth it?

Ocinfo

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Re: Should I take the job?
« Reply #10 on: April 22, 2015, 04:28:49 PM »
Out of curiosity, does the new employers name start with an "M"?

Cougar

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Re: Should I take the job?
« Reply #11 on: April 22, 2015, 05:30:27 PM »
Given that your net worth is 700k, I'd say you should make the decision as if the two jobs were paying exactly the same.
Thus, the shorter commute and one more week off wins.

second that.

where your current level is, the increase shouldnt make a big enough difference over time.

i know, i have run numbers myself and $1000 a month sounds like a lot, but it doesnt turn into much of a gain in 5 or ten years.

i'd focus on cutting expenses.

sb_NoVA

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Re: Should I take the job?
« Reply #12 on: April 23, 2015, 07:38:19 AM »
Seems like you are suffering a bit from sunk cost fallacy in relation to the 529.

Income taxes and the 10% penalty would only be due on your EARNINGS on the account, not on your original contributions.  If you make a non-qualified withdrawal, they calculate the contributions/earnings as a proportion of the entire account values.  So if you contributed 60k and have earned 30k to make up your current account balance, you would pay income tax/penalty only on 33.3% of the total of whatever you withdrew.

See http://www.savingforcollege.com/intro_to_529s/what-is-the-penalty-on-an-unused-529-plan.php for more infor

As you leave the money in the account, the proportion of earnings to contributions is probably only going to rise.  So you might be better off starting to make withdrawals now.   Or I guess you could wait until the market crashes again and you basically have no earnings. 

Re:  your condo -- could you rent it out and use the money you get from that to rent a place in the new location for a simlar price?  Might not be as nice as your own place, but you would lose that nasty commute.  As a single person you don't really need a 2br 2 bath, right?  So maybe rent a smaller place closer to work for the time being, and still have the condo to go back to once you FIRE.

Thanks.  I'll just leave the money in 529 and let it grow for future kids, grand-kids, charity....or gifts to friend's kids.  I figured it's a great idea gifting slices from 529 rather than buying electronic toys with diminishing value.  My state makes it easy to split 529 accounts in smaller pieces.

Your suggestion to rent out my current place and rent a smaller one makes lot of sense.  I mentioned 2bd/bath because I was thinking of just renting out the other bedroom if I buy a 2bd/bath condo.  I shamelessly admit that I have accumulated tonnes of 'stuff' that I need to part with.  This condo has garage and storage space that is full of cheap stuff from Amazon that I need to sell/donate. 

sb_NoVA

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Re: Should I take the job?
« Reply #13 on: April 23, 2015, 07:40:09 AM »
Out of curiosity, does the new employers name start with an "M"?

Sure does.  You got me.  Although I won't be doing the same work you do.  PM me if you have any words of wisdom.

sb_NoVA

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Re: Should I take the job?
« Reply #14 on: April 23, 2015, 07:43:41 AM »

I tend to agree, with increased commute my expenses will only increase.  Less time to pack food etc.  I just learnt that I may also have to commute to client locations, that travel will be reimbursed, but there's less clarity on what that might entail.  So, I have to go in the city in the morning, that might be 90mins to an hour - quite painful. 

Given that your net worth is 700k, I'd say you should make the decision as if the two jobs were paying exactly the same.
Thus, the shorter commute and one more week off wins.

second that.

where your current level is, the increase shouldnt make a big enough difference over time.

i know, i have run numbers myself and $1000 a month sounds like a lot, but it doesnt turn into much of a gain in 5 or ten years.

i'd focus on cutting expenses.

Josiecat

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Re: Should I take the job?
« Reply #15 on: April 23, 2015, 10:39:04 AM »
I assume you are in Northern VA.  I wouldn't recommend a job with a commute that is WORSE.

Have you considered negotiating telecommuting a few days a week to compensate? 


sb_NoVA

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Re: Should I take the job?
« Reply #16 on: April 24, 2015, 11:28:36 AM »
Thanks all.  Great response and gives me a lot to think about.