Changing Careers and Choosing a 60% Pay Cut

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THIS POST MAY CONTAIN AFFILIATE LINKS. PLEASE SEE MY DISCLOSURE FOR MORE INFORMATION.

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.

Choosing a pay cut and going back to school may be worthwhile for you.
Another beautiful waterfall in the UP!

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:

Going back to school and shrinking your paycheck may be worth it, sometimes happiness trumps income.
After years of considering going back to school he’s taking the leap.

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.

Winding your way and changing careers may help you reach early retirement happily.
The path to financial independence can be windy.

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).

Fortunately, our emergency fund, high savings rate, and frugal spending allows the money to take second priority to happiness. Thanks for joining us on the journey!

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?

 

40 comments on “Changing Careers and Choosing a 60% Pay Cut”

  1. Hey, good luck going back to school! I admit that, if I were presented with this choice, it would be a tough one to swallow. But we all have to do what’s bets for our own happiness. The FIRE community talks about money a lot, sure, but we also focus on personal happiness. If this leg of your journey will give you happiness and you can make the finances work, enjoy. 🙂

    1. Reply

      Thanks for the support!

  2. Wow, congratulations on the big decision! Good luck with the new adventure!

    1. Reply

      Thanks for the support!

  3. How exciting! I’d like to go back to school one day for my PhD, but right now I can’t afford it. I always thought that would be a great thing to do once I was FIRE though.

    Do you guys live in the UP? I was born in Traverse City but lived in Newberry for a good part of my childhood. My aunt and uncle still live there and it’s one of my favorite places to visit in Michigan. I still miss the annual trips to deer camp outside of Escanaba. 😀

    1. Reply

      We went to school in the UP, but now live downstate. We miss it up there!

      I’m glad to hear I’m not the only crazy one interested in getting their PhD! In time! Fortunately, there’s grants/funding for my field.

  4. Congrats on taking the leap, Mr. Kiwi!

    Pursuing a PhD can be stressful and demoralizing at times (or most of the time). But if you like learning and doing research, I think it might be just the perfect career path for you regardless of how much you will make in the future. Even if things don’t work out (like what happened to me), you will still know what you are or are not passionate about.

    Best of luck with the doctoral program! 🙂

    1. Reply

      Thanks! Yes, it will be tough! After I finished my master’s I felt a calling to go back and get my PhD. Fortunately, we are prepared to stop if it isn’t the right fit (but I’m sure that decision would be excruciating).

  5. No judging here! Congratulations on choosing happiness, Mr. Kiwi. 🙂 Make sure your healthy habits are really solid now so that you don’t get derailed once you start school and feel the extra stress. Best wishes!

    1. Reply

      Thanks Amy! It’s been a crazy few months, and now I have a whole month off to vacation, enjoy the holidays, and get a few items off my to do list. Most importantly to decompress and experience the emotions of all of this change.

  6. Reply

    It is brave to consider a totally new path. Good luck on your journey.

    1. Reply

      Thanks!

  7. Living in the FI community for the past 6 months has me thinking about a similar decision. First, you start thinking about what you would do when you get to FI. Then you question why you should wait! Good for you for taking the leap. Good luck. I hope you love it!

    1. Reply

      Thanks! We’re excited about the options FI has offered!

  8. Good for you! The point of pursuing FIRE is to give yourself opportunities to live a happier life. If you have a way to live a happier life now, then you should absolutely do it. Part of the benefit of cutting back your spending is buying yourself the flexibility to make decisions like this.

    Congrats on stepping off the path and making your own decisions.

    1. Reply

      Thanks for the support!

  9. If it’s what you love, there’s no doubt an education (PhD, a free one) would pay off and cushion your career. This is more like an investment to me! Not a pay cut ^^

    1. Reply

      Haha, well it’s probably a horrible financial choice! Many of the private sector jobs don’t hire people with PhDs (overqualified), but we have our options! And hey, maybe a career in academia will be the best fit? We have a few years to figure this out!

  10. Congrats on the decision to go back to school!

    I took a 25% pay cut to have a better work-life balance which meant less hours. Since we are debt free we have less bills and expenses so I was able to take the opportunity. Like you said, money is a second priority to happiness 🙂

    1. Reply

      That’s awesome Nicole! Your debt payoff story is awesome!

  11. I think this is a smart decision 😉 I went back to get my administrative degree when I was 40 and then earned my doctorate (Ed.D.) when I was 44. I went up in salary for a few years and then WAY down when I left K-12 education to teach at the college level. It was half the amount of work though! I’ll be interested in following your journey!

    1. Reply

      Thanks Vicki! It’s a big move with a wide open future, and we are definitely thankful for building a good nest egg that may make some of those lower paying Ph.D. jobs more attractive when he finishes! I’m excited to see where our journey takes us (life was getting a little too boring 🙂 )!

  12. Congrats on going back to school! Having twice worked professionally in a college town, I have to say the lifestyle of a PhD professor could be pretty sweet. High quality benefits, okay pay, and 15+ weeks off a year. I’ve debated getting a PhD as a second career, hate being the non-doctor in the house

    1. Reply

      Thanks! Yeah, that life doesn’t look too bad! Always a good post-FI option too! Gotta catch up to your wife in degrees!

    • GYM
    • 2017-12-05
    Reply

    It’s nice to take a breather to go back to school. I felt that way when I did my masters. Congrats on the decision and good luck on the Doctoral program!

    1. Reply

      Thanks for the encouragement!

  13. Reply

    Best of luck in school! I don’t love everything about my job but I do find it stimulating at the moment. Those times when I haven’t were excruciating so can understand your desire to reset.

    1. Reply

      Thanks! And yes, there will always be a couple of less desirable parts of any job, but hopefully the good parts outweigh the bad and make it worth it! I’m glad you are being challenged at your current job!

  14. Congratulations and good luck! What an awesome decision! I totally agree that pursuing FIRE gives us options more than anything else. Chase your passions!

    For me, we were only a few years away from FI when I was hit with an unexpected layoff recently. Sure, it was disappointing, but I love that our lean budget means we can live off my severance for 2 years while I try to build the business I’ve always dreamed of, instead of feeling trapped.

    1. Reply

      I’m so sorry for the unexpected layoff, but you gotta love a lean budget! I’m happy your family is moving forward and I’m excited to watch your business grow!

  15. Reply

    I’ve changed careers at least once since starting. I’ve found something I enjoy so I won’t do it again, but I strongly recommend it if you are not happy today.

    1. Reply

      Congrats on finding something you enjoy! I hope this works out!

  16. Reply

    Love love love this!! Best of luck!! Life isn’t about acquiring money and never doing anything again! It’s about enjoying it, and feeling fulfilled. That is so much more valuable!

    1. Reply

      Thanks for the support!

  17. Reply

    Very cool! Mrs. Done by Forty has been pursuing her PhD pretty much the whole time that we’ve been working towards FIRE, and it’s not hurt us in any way trying to reach that goal. And one of the possible things I’d like to pursue post FIRE is to earn a PhD, maybe in Behavioral Economics. Who knows.

    The point of financial independence is somewhat devoid of any considerations of money: it’s about doing the things you feel you ought to be doing, and having any thoughts/worries/needs related to money removed from the equation.

    1. Reply

      Yay, congrats to Mrs. Done by Forty! Best of luck to her as she finishes her degree! We love getting to consider different options and breaking from the norm (even though it goes against our natural instincts).

  18. This is another one of those times where life wins over money. If you feel like you’re bored, wasting your time, and generally unfulfilled, that’s time you can’t get back! Good luck with the PhD!

    1. Reply

      Thanks and yes, wasting your life is no way to live! We all define “wasting” differently.

  19. Reply

    I have been thinking of going back to get my certification to become a certified financial planner. Haven’t decided to make the jump yet.

    Congratulations on making the decision to go and good luck! 🍀

    1. Reply

      Thanks for the encouragement! He took a few years to make the leap.

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