Turn down additional year overseas and $23-28k cash - Crazy?

[jzb11]

*edited to update the numbers and give more details*

Hello,

I am a thirty year old single man currently living in Brazil for my job. I am here for one year (started in Jan will end in December). I have a great relationship with my Brazilian "Boss" and he's made it clear that he would love to have me back next year. While I am here, I do not pay for my car, my home, or my gas. I also work on a contract and earn an hourly wage about 38% higher than the equivalent on a salary (although I don't have any paid vacation days, sick days, holidays, and pay my own health ins, disability, business ins, etc).

Anyway with a tax break I'll receive for being out of the USA next year, the lack of expenses, and the extra income, I'll walk away with a possible extra 30K next year if I stay. Financially this is a great opportunity. I am not in love with my work, but it's a great job otherwise. I work with good people, don't deal with political shenanigans etc.

The challenges here are that:

1.) It's a boring place, it's nothing like Sao Paulo or Rio which are metropolitan areas with lots to do and see.

2.) The language barrier makes life a bit more difficult. It's just not the same when you're not a native speaker. The jokes don't translate, you're always missing a part of the conversation, you're always the outsider.

3.) I find myself staying in a lot more than I'd like due to a lack of activities or the lack of accessibility.

4.) Establishing fulfilling and rich relationships with other singles has been a challenge as well (Brazilian girls aren't an issue).

5.) This isn't my first rodeo per se. I spent 6 months here last year (meant to be a full year, but visa issues prevented that). I've seen a lot (25 countries), and I spent about 50% of 2012 on the road for work (2-3 weeks at a time).  So there's a bit of fatigue setting in.
 
Anyway to the numbers. At the end of this year:

43K in my IRA
70K cash/stocks (taxable).
~113K total

If I go home:

80K Gross Income
17.5K into 401K
5500 into my IRA (though I don't think it will be deductible - but I have an IRA with vanguard, no roth currently)
57K gross income remaining * .69 (Rough estimate of total taxes)
39330 net income for the year
18-23K for living expenses for the year (depends how mustachian I go)
16330-21330 - cash

~+40-45K to my networth (with 23000 of that in tax sheltered accounts)

If I stay:

100K gross income (could be more or could be less - I don't get paid for vacation or sick days)
5500 to my IRA
~11K for self employment taxes (SS, Medicare, I have to pay both portions as a contractor)
84.5K-89.5k Net income
6000 for business insurances (health, emergency medical, dental, disability, liability, errors & omissions)
5K for living expenses in Brazil (food, cell phone, entertainment).
5K-10K for traveling

63.5K-68.5K into my networth (20K is tax exempt cash - instead of 17.5K into 401k)

I guess I'm asking the existential question to some extent - What is life and what does it mean to be happy. If I'm not happy and forcing myself to be here, is it worth it for 23-28k? Will it really change my life? Or would it be better to go home and really go back to enjoying life. So I see both sides of the coin in a sense - the pragmatic "don't waste the opportunity/you need to work to live" and the counterpoint "more to life than money, what does it mean to be happy" etc.

What are your thoughts?

[surfhb]

Personally I would suck it up for one more year.    You won't ever have this kind of opportunity again to rack up that kind of percentage to your net worth.   Imagine how sweet it will be to come home and go out for a night with your friends :)

[solon]

I hate to say this, jzb11, but I think this is a question only you can answer. The money is great, but so are your friendships. Only you can tell which has greater value.

[Numbers Man]

I think a girlfriend would change your disposition. Don't be a complainypants and start talking and getting involved with the native population.

[sobezen]

I think a girlfriend would change your disposition. Don't be a complainypants and start talking and getting involved with the native population.

+1

Find local groups that do activities you might enjoy (intermural sports, book clubs, etc) to build a small base of friends there.

+1

Before you decide to throw in the towel... go all out and really explore your environment!  Be open to any and all opportunities available.  When will you have a chance to live in this place again in the future?  You never know for certain, right?  So be BOLD, be brave and do something amazing!

[boy_bye]

I think a girlfriend would change your disposition. Don't be a complainypants and start talking and getting involved with the native population.

+1

Find local groups that do activities you might enjoy (intermural sports, book clubs, etc) to build a small base of friends there.

Yes! I don't know where you are in Brazil, but I work with lots of folks in Sao Paulo and I have found them to be incredibly warm and welcoming, so I'm surprised if your co-workers are just leaving you to fend for yourself... Is there anyone at work you could ask to show you around a bit?

[cbr shadow]

I think it depends on HOW unhappy you are, and if there are any opportunities for you in the states.
Is there anything you can do to make life more enjoyable while in Brazil?  Meetups for expats, join a cycling group, take surf lessons, something?

[jzb11]

I'm not in a metropolitan city like Sao Paulo or Rio. Development is rather new and so it's not the most exciting and/or fun place to be. I'm sure life in a city like Rio or SP would be a lot more fun/interesting.

I love to shoot back in the usa and am in the process of joining a shooting club here  - but it's not nearly as accessible or affordable. I.e $3 usd per round retail, about $.60 round if reloaded (that's 150 usd per 50 rounds at retail, vs 30 usd reloaded – the reloaded price is still 2.5x the cost of a box of 50 in the US).

I guess the equivalent would be something like living in rural Texas vs Austin. The rural Texas example is a bit extreme the comparison makes my point.

I’ll work for the same company back in the USA; I’ll go back to a salaried position making 80k or so. I’ll max my 401k and IRA with ease. The Midwest is inexpensive, especially for a young single guy.

I don't have a house so I'll need to find an apartment or buy something on the cheap (<50K assuming deals are still to be had).

[boy_bye]

hmm ... so what's the difference between your (projected) net worth in one year if you stay in brazil vs. if you go home? is it really $60K?

[NoraLenderbee]

You would be able to sock away nearly an entire year's salary. Rarely does one have that opportunity. Think about how many years  earlier you can get to FI if you have that 60K working for you.
Only you can decide, but I would stick it out for one more year, joining the gun club and doing whatever else I could to make it more pleasant.

[liberty53]

I spent many years living overseas in a situation similar to yours, and although there was some possible opportunity cost (missing out on tech and housing booms) I would never be FI at my age if I didn't take the overseas paycheck.

I tell young engineers that this is one of the best kept secrets. Live overseas and save at a ratio of at least 4:1 compared to living in the U.S.

Also, a lot of empty nester engineers do "retirement tours" overseas to burnish their retirement savings.

It sounds like you have a great opportunity to pad the bank account with only a modest amount of "suffering." I would say the only risk might be what happened to me - it was always "one more year" overseas.

[James81]

A year is nothing. It will go by so fast you won't even know why you asked this question.

I think if one year there would get you to FI a few years sooner, the pay off is worth it.

Plus, your experience doesn't have to be unhappy. While you are there, you can spend some time figuring out things you enjoy about the place.

[G-dog]

Depending on the answer to Madgeylou's question - which may change the fact pattern..

You can make it another year, it will go faster than you think. That said, is there any perk you can negotiate to make this better?  Maybe the time for a trip home ( or a business trip back to US location).

But, only you can answer this question. I would find it VERY hard to pass up $60k (but it is only money)

[Cressida]

A year is nothing. It will go by so fast you won't even know why you asked this question.

I largely agree with this. Of course, if you're truly unhappy, don't stay. But I do think a year is pretty short in the grand scheme.

[jzb11]

hmm ... so what's the difference between your (projected) net worth in one year if you stay in brazil vs. if you go home? is it really $60K?

I'll try to break it down. If I go home:

80K Gross Income
17.5K into 401K
5500 into my IRA (though I don't think it will be deductible - but I have an IRA with vanguard, no roth currently)

57K gross income remaining * .69 (Rough estimate of total taxes)
39330 net income for the year
18-23K for living expenses for the year (depends how mustachian I go)
16330-21330 - cash

So going home is:

~+40-45K to my networth (with 23000 of that in tax sheltered accounts)

If I stay:

100K gross income (could be more or could be less - I don't get paid for vacation or sick days)
I will not pay federal income tax due to exclusion - so that's 20k that goes straight to cash instead of 401k
5500 to my IRA
~11K for self employment taxes (SS, Medicare, I have to pay both portions as a contractor)

84.5K-89.5k Net income

6000 for business insurances (health, emergency medical, dental, disability, liability, errors & omissions)
5K for living expenses in Brazil (food, cell phone, entertainment).
5K-10K for traveling

63.5K-68.5K into my networth.

So if I break it down its about ~+$20-28.5K difference - not 60K.

I could invest in a SEP (20% of my income up to 50K max) but I don't think it makes sense unless I earn more than 100 (which is possible depending on overtime etc).

(thanks for asking, I actually hadn't run the numbers like that).

[breakfast]

stay the extra year

[Ftao93]

20 some k might not make that much difference overall.  Then again what you save is the bulk of what I make, before costs, investments, etc.

For 1 more year, it might be worth it.  Once you 'settle' its hard to travel, as you may have a spouse, kids, dogs, etc.  Be aware that even if you return home, you have an incredible salary that many will never make half of.  I was 30 10 years ago, and it went by FAST. 

If there's nothing to catch your interest, read.  You have the internet and can download any book imaginable.  Bolster your skills, flex your mind.  As you age, the mind can become less flexible.  The more you cram in there now, the easier it will be later (same with savings!).

If you're truly unhappy though, no amount of money will make that up.

[resy]

Yup, stay. It doesn't sound like you are in danger, depressed or anytjing extreme like that so I think its an awesone opportunity.
Who knows what lifestylr your friends have right now and how you would fit in? What if you left that money and found out that they were to busy that year? Idk just something to consider! I totally agree in immersing yourself in the culture, you'll have more stories to tell when you come back to the US

[jeffersonpita]

You could try getting envolved with the community. In which city do you live?

[TomTX]

Working one year in Brazil means you end up at FIRE earlier. You will be stashing an entire year's expenses. Having $25k extra at early in the accumulation phase means a LOT more than at the end of the accumulation phase. Compound growth.

[LonerMatt]

I'd never stay somewhere I was unhappy, even if I earned a bit more money. 80K isn't chump change, and if you know you'll be happier and more satisfied with life in the USA, then you just need to work out if $28k is worth being despondent, unsure and displeased.

Of course, you may end up finding your feet and loving the life, etc, but it doesn't seem that way.

Life isn't a series of steps until you're FI - that's shallow and relatively silly - why make yourself unhappier than you need to? For money? Isn't that exactly the logic we're fighting against here?

[jeffersonpita]

That's a good idea. Teaching English could help you to make friends and improve your Portuguese