Changing Careers and Choosing a 60% Pay Cut
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Story-time – Deciding to Take a Job with a Large Pay Cut
(Written by Mr. Kiwi)
It’s difficult for me to talk about my career and future without launching into my whole life story. It feels like maybe if I explain the whole thing maybe you’ll be able to help give me advice or at least understand why I’ve chosen what I have.
But maybe I’m just worried you’ll judge me.
I have a solid job with good pay and benefits. I’m using my degree. I believe in what I’m doing at my current job. Mrs. Kiwi works in the same building, so we get to commute, eat lunch, and take breaks together. It all seems to add up to a really positive work experience, right?
But I’m just so bored.
I really feel like I should be able to deal with it. A lot of (I’d wager most) people don’t like their jobs. But just because I know that Joe Schmoe can suck it up and manage a way to make it through his 40 hours a week doesn’t make me super thrilled to do it myself.
Financial independence early retirement (FIRE) has been helpful with this by giving me some sort of light at the end of the tunnel. It’s encouraged me to think about spending in terms of the time that I spend at work instead of dollars. [Because let’s be real – dollars don’t actually mean anything.] Plus, because of compound interest an hour at work now can be invested and will be worth a lot more later… I dunno. It all ads up to a convincing argument to make money now, then do whatever I want once we retire. Or delay going back to school until we are FI.
But then I try to think about what I want to do after retirement, and the whole argument completely falls apart if I can’t answer that question. I’ve thought about my hobbies: cycling, woodworking, reading, etc. I really DO have time for those activities now. I’ll probably do more of these things once we transition into FIRE, but what will I do with the rest of my time?
It’s taken me a long time to realize, but I want to fill my time learning things.
I know that’s painfully ambiguous, and I know I’m always learning. I could put a more serious effort into building a lab in my basement and start doing research on the side. But I want to make a habit of it. And I want to be good at it. And how am I going to get good at it? By surrounding myself with other people who love learning for the sake of learning.
I’ve decided to find those people, and starting in January I’ll be back in school pursuing my PhD. You may be wondering:
Is this a pay cut? Absolutely.
Will it delay retirement? No question.
Am I worried about the proposed tax plan? Hell yeah, I am.
But the fact of the matter is that this is a chance to try something that I think will be more fulfilling to me personally.
I could be wrong [I sure hope not!]. Maybe I’m going to hate this whole PhD thing. It’s a lot of work and stress, and it’s really going to push our FIRE date out into the horizon. It’s really scary thinking about jeopardizing the secure lives and anticipated future that we have now.
The way I see it, the whole point of FIRE is to build a safety net that lets you break free of the pressure to work a job you don’t like and to let you do whatever it is you love. Me going back to school will have a pretty big opportunity cost [The income differential over the 3-ish years I’ll be studying is pretty staggering]. But if I love what I’m doing that doesn’t matter.
The Financial Impacts of Going Back to School
If the fast path to FI isn’t for you, don’t forget there are other routes to achieve your financial independence early retirement (FIRE) goals. We don’t have to sacrifice our values or goals and sit in a cubicle all day to reach FIRE, you too, may elect to extend your journey.
After spending over a year of working to make this a reality I’m super excited to tell you that:
Mr. Kiwi is going back to school! Woo, future PhD student is in the home!
We had many personal and financial conversations before making the leap to greatly reduce our income. Our simple path to FIRE is getting a little more complicated. If you are considering taking a pay cut there are many considerations to make. And I plan to write about our journey to slash our income over the coming months.
Our total household income will be reduced by over 30% from this one choice, and upon graduating, according to Glassdoor it is likely the potential future Dr. Kiwi (there’s lots of work to complete before he will earn that title) will not secure a job with a higher salary than he is currently making. But it looks like the Ph.D. job market is improving (source).
Have you considered going back to school? Have you taken a pay cut before? Would you shift career paths before you reach FI? Any PhDs in the house? Any back to school advice?