- Reader Case: Choosing Between Health and FIRE - September 25, 2020
- Let’s Go Exploring! Singapore: Futuristic Foodie Paradise - September 18, 2020
- Will COVID Change The Nature of Work Permanently? - August 31, 2020
Today’s reader case comes from a pair of professionals that are high earning, but not high-happiness. Let’s dive into their story!
Apology in advance for the long email. I am a huge fan of your book and was really inspired by your candid stories. I have been hearing about FIRE movement 5 years ago but I never felt it would be possible for us to achieve until I read your book, especially the FI journey you detailed at the back of your book.
A little bit about us. My husband and I are both in our mid-30s. I work in finance, while my husband is a nurse. We are grateful to live comfortably and continue to work during the pandemic. Before I became serious about FI, I thought life is always about how much more pay rise I could get. So I jumped from one stressful job to another, but end up finding myself unhappy after a couple of years. In addition, I wasn’t the best in taking care of myself, physically or financially. I was always on a “work hard play harder” mentality. So I worked 70+ hours a week. Breakfast, lunch, and dinner usually happen at my office desk. I gained a significant amount of weight and was not being mindful of my spending. I did manage to pay off my law school debt of $80K within 4 years, and kept saving 30%+ of income as we were planning to buy a bigger apartment.
Until late last year, I suffered from chronic pain on my back, affected my hand mobility, due largely to stress, anxiety, and other health complication. My doctor recommended me to take a couple of months of medical leave. During the break, I realized how unhappy I was with my career and definitely do not see myself continue working there for another day. People who’ve worked there for 10-20 years, would just get let go in a snap. It was just not a sustainable place and trajectory for my health and sanity. Some days when my body was in a great deal of pain, I just wanted to submit my resignation and quit so I could take a break and explore my other interests, such as comedy writing. I have gotten better now, but the chronic pain will be a condition that I have to deal with for the future.
This is also when I discovered your book. I finished it within two days and I sat down to review our finance afterward. We scrapped the plan of buying a bigger apartment and started slowly investing our savings to ETF. The COVID lockdown also brought our expense way down, helping me to realize that it is possible to cut my spending, increased our 401(k)/403(b) contributions, save 60%+ of post-tax income and still live happily. I wish I have done this sooner, like way before I realized that I wanted to leave my high paying job.
The lockdown has also made the work less demanding, at least in the short term, since everyone is now working from home for the remainder of the year. I also have more time to explore my other interests in comedy writing, blogging, and most importantly, to take care of my body. My husband, on the other hand, has been pretty happy with his nursing job, and he is probably staying until he can collect a pension. I honestly don’t know how he does it, even with the pandemic he still comes home from the hospital every day with a smile, and yet I am miserable working from home all day. I guess that’s a good indication when one really likes his/her job.
I guess one thing I am hoping you can help me, is to decide whether should I just follow my heart and take the leap to quit to explore other writing opportunities now, or should do that after FI? Based on the calculation, and I could be wrong, is that we are somewhere 5-7 years away from FI assuming we keep our current income and expense low at the post COVID level, but I honestly don’t think I can continue to work in this industry for another year. I wonder if I am being too risk-averse for not quitting now. Is there another intermediary milestone I should look into to give me the comfort that I have enough to make the jump? Also, seeing how volatile the finance industry is, I wouldn’t be surprised if I get let go at some points. Perhaps I should stick it out until I get the chopped/ ask for lay off/until I have more clarity on where my next step is?
Latest gross/net annual family income – Gross: $265,000 / Net: $218,000
Husband: $109,000/Mine: $156,000
Monthly family spending – Pre COVID: $10,000-11,000 a month / Post COVID: $ 4,000-5,000
Any debts – Not really. Credit card debt that paid off every month
Any fixed assets (house, car, etc.)
Apartment ($700 monthly maintenance fee)
Investments or savings (cash, bonds, stocks, etc.)
401(K) – $114,000 / husband 403(B)- $20,000 / husband’s pension -? (maybe 20+ years to go?)
Tradition IRA – $6,000 (can’t really take the tax advantage for IRA, but will contribute another $6,000 this year)
Investment – $43,000 (20% BND, VEU 35%, VUG/VTI 45%)
Saving – $170,000 (stuck in some new saving/checking accounts I recently opened for sign-on bonuses. Once they are freed up later this year will move some of these to investment/or other new acc for more sign-on bonuses)
Lawyer in Pain/Smiley Nurse
This story struck a bit close to home for me. Like our reader, Wanderer and I were both in high-paying careers but our happiness level differed drastically. While Wanderer generally enjoyed his computer engineering career and the people he worked with, my experience was very similar to LawyerInPain. My job was not only high-stress requiring lots of overtime and pager support duty, the people I worked with were demanding and unreasonable. One time, a co-worker went on medical leave because of a stress-induced mental breakdown, so I had to step up and take on his project on top of my normal workload. Many stressful months later I had managed to rescue his project from the brink of failure, and instead of rewarding me my boss laughed at me and called me a sucker that got “tricked” into being overloaded. For some reason our relationship took a sharp nosedive after that. Shocking.
Even more eerily similar is that chronic pain that LawyerInPain is experiencing. Stress coupled with long nights spent tapping into a laptop in the dark does strange things to one’s body, and at the end of my career my wrist was in so much pain I had to wear a cast and go to physio. So when I say I feel our reader’s pain, I really mean it.
So on to big million dollar question: Should LawyerInPain quit her soul-sucking job? There are a few angles we could tackle this from, but as usual we will start with the math. What does the math say?
Math Shit Up!
First of all, and this is the ONLY context this sentence makes sense, thank goodness for COVID! Pre-COVID, our couple’s expenses were an astonishing $10k to $11k a month. That’s $120k to $132k a year, or more than 3x what we spend now! I get that a stressful job often means higher spending to unwind after work, but what were you two doing, racing Ferrarris?!?
So if this were a “normal” (does anyone even remember what normal is anymore?) reader case, that’s where our focus would be, but because of COVID forcing this couple to revisit their expenses, they’ve already done the hard work and have slashed their monthly expenses impressively all the way down to $4k to $5k per month, or $48k to $60k a year. Great job!
And here’s where I would normally calculate their FI number and start generating charts, but in this case it’s actually a lot more straightforward. LawyerInPain’s husband, SmileyNurse, enjoys his job and intends to keep working until they qualify for their pension. His pre-tax income of $109k (I’m guessing he’s a Nurse Practitioner or something) should become about $90k after taxes, which is more than enough to cover their living expenses and still save 33% of his salary, so this couple doesn’t need to become fully FI. And quite frankly, America as a nation needs every nurse they can get, so if he loves being a nurse (and by then way, thank you for all that you do!) by all means keep doing it!
So from a mathematical perspective, LawyerInPain can leave tomorrow and they’d be just fine from a financial perspective.
That’s what the math says. But in this case, the math isn’t the only picture…
The Importance of Identity
However what concerns me is how much of your identity is wrapped up right now in being a lawyer. I was also in that boat, with my only identity being a computer engineer (even though I hated it). The identity I wanted, like this reader, was as a writer, but that identity takes time to build. So what Wanderer and I did was we wrote during the evenings and weekends, taking night classes at a local community college to develop our skills as writers. Only when our first book, Little Miss Evil, got published did we quit our jobs. That way we were stepping from one identity as engineers into another identity as writers. We know many early retirees that simply gave up their existing identity without establishing a new one, and they were surprised to find that their stress levels didn’t decrease.
That being said, you’ve got to take care of your health first. Doesn’t matter how rich you are if you can’t move.
Fortunately, you’ve already done the difficult part of wresting your expenses under control. Because this couple is financially stable with just one income, LawyerInPain holds all the leverage.
That means now is the perfect time to negotiate a more reasonable schedule at work. Maybe you can move to part-time hours, or a 4-day work week. At the very least, stop signing up for more work projects! Once Wanderer and I got close enough to our FI number that if I got laid off, the severance and EI would take us over the finish line, you can bet I stopped saying “bring it on” to new projects.
When that same manager tried to “trick” me into “volunteering” for another project that was on fire, I just ignored him. He would send meeting invites to me and I just wouldn’t show up. Everyone was like “Ooooh, FIRECracker’s going to get in so much trouble,” but I didn’t give a shit. What were they going to do, lay me off and make me FI? Bring it, BE-ATCH!
Funnily enough, what ended up happening to me was…nothing. Even though everyone was killing themselves working 24/7 on that project, it still blew up, and they got blamed for the failure. No one blamed me for anything since I never agreed to be part of the project in the first place.
LawyerInPain is in an even stronger position than I was, because they don’t even need EI to make it. She holds all the cards. So she should use them to negotiate a less stressful schedule, or possibly change jobs to a lower-stress one like a non-profit. But she should also work on building up her second identity, whatever that is. Once her second identity is solid enough that she can step into it, only then should she quit her job as a lawyer.
So that’s my take on LawyerInPain’s situation. What would you to? If you were in her situation, would you quit your stressful job now? Or would you keep working until you made it in your side hustle?
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