Quality of Life Pay Cut vs. Second Job Income

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Quality of Life Pay Cut vs. Second Job Income

Post by cmb16 » Tue Jan 14, 2020 3:23 pm

Hi All,

Looking for some perspective from those who may have taken a cut in pay for quality of life.

Currently work in public service as my full-time career. Make approx. $100k working on average 55 hours per week. LOVE my job (biggest complaint is I can't work more). I also operate a side-business (3 years old) in accounting making approx. $30k (increasing every year), sometimes pretty stressful with time commitment, definitely doing it just for the money. I originally took a $20k pay cut to leave finance and go into public safety, and I don't regret that for a moment. I have a wife who is a SAHM, 2 kids under 6. We are 33/34 years old, our only debt is a mortgage at $150k (15 yr). Put approx. 20% into various retirement accounts and pension, plus save additional ~10% after-tax (more like delayed spending on assets/house improvements, etc). Our net worth is ~$450k. We take several vacations a year, and while live below our means, don't feel like we are living in poverty and are happy.

There is a promotional opportunity at my primary public service job that would bring an increase of approx. $40k in income, mostly due to increased overtime opportunities (more time away from home). This would push my average hours worked there to 70-80 hours/week. Plus, given the responsibility of the lives of the public and my co-workers, I would want dedicate more time to training, etc to ensure good performance, not get anybody killed. If I sold the business after the promotion, my income would be the same as it is now, which we are happy/comfortable with.

I'm conflicted about whether to keep the business going (maximize my potential revenue) vs. selling it. My concerns with continuing to operate it are the time commitment away from home getting worse due to the promotion and business growth, business taking time/attention away from time spent preparing/improving at my primary job, etc. My concerns with selling it are giving up income that is growing every year, especially with a spouse that stays at home.

I know there are many variables (when does SAHM go back to work, etc) so there is no clear-cut answer, but I guess just looking for some insight or clarification from those who may have dealt with something similar in terms of leaving income on the table for quality of life. Thanks.

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Re: Quality of Life Pay Cut vs. Second Job Income

Post by bloom2708 » Tue Jan 14, 2020 5:08 pm

I wouldn't trade 55 hours for 70-80 for anything.

70-80 + your extra side gig hours. When do you sleep and eat? :wink: How is your weight? Health? Exercising 5 times a week? Eating healthy?

Work (enough) to live. Don't live to work. Your kids will grow up before you know and you will be "at work". Where's dad? Working. :confused

Listen to "Cats In the Cradle" by Harry Chapin.

I would consider cutting the side gig down. If you can't live on $100k, then spending should be looked at.

Just my 2 cents. Good luck with your decisions.
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Re: Quality of Life Pay Cut vs. Second Job Income

Post by bovineplane » Tue Jan 14, 2020 5:27 pm

Not a chance Id take 25-30 more hours per week for $40k increase in pay. Unless I was only working 20 hours to start.

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Re: Quality of Life Pay Cut vs. Second Job Income

Post by GmanJeff » Tue Jan 14, 2020 5:38 pm

While fire departments have different models, typical would be 3 24-hour shifts, so that you'd work 24 hrs and then have 2 days off. If you are speaking of working a shift schedule like that, part of your time away from home would be when the family is asleep anyway, and you'd have a good amount of waking time with them, despite the large number of hours on duty during a typical week.

While your desire for additional training is admirable, a well-run and properly staffed department provides that during on-duty time, not as something which has to be added on to a standard work week. And, in a typical firehouse environment, you'd be able to do on-line training on duty from the station in between calls and station drills.

72 hrs/week under these circumstances is probably palatable, especially if it sets you up for a better schedule and better compensation in the future as a Station Commander, Battalion Chief, etc.
Last edited by GmanJeff on Tue Jan 14, 2020 6:11 pm, edited 3 times in total.

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Re: Quality of Life Pay Cut vs. Second Job Income

Post by geerhardusvos » Tue Jan 14, 2020 5:42 pm

If I were you (and I’m not), I would definitely be using this time to nurture your family/children, and working consistently over 55 hours a week does not sound sustainable. $100K is just fine to live on and be able to save a little bit and focus on what matters. I can’t imagine working over 60 hours a week, let alone 75 with little kids in my house that I only get 16 to 18 years with to nurture, love, teach, and invest in. I don’t work more than 45 hours a week and I have little kids and I feel like I work too much
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Re: Quality of Life Pay Cut vs. Second Job Income

Post by JoeRetire » Tue Jan 14, 2020 5:44 pm

cmb16 wrote:
Tue Jan 14, 2020 3:23 pm
Looking for some perspective from those who may have taken a cut in pay for quality of life.
Everyone makes choices all the time that impact them both financially and quality of life wise. There's no escaping it.

You have a job and a side business. You are trading time for money. Your wife stays at home. She is trading money for time.

Some folks do all their yard work. Others pay to have it done. Some folks clean their own home. Others pay to have it done.

You are faced with a promotional opportunity to trade more time for more money. And you are considering selling your business.

We all need to weigh these factors within the context of our own lives and come up with the compromise that works best for us.

Before we were married, my wife and I both worked two jobs each. That allowed us to save the money for our wedding, our furniture, and the deposit money for our first apartment. We entered married life with no debt. For us, the tradeoff was worth it.

Later, we were able to save enough money so that we could start a family and she could stay home with the children. We both worked hard to make that happen. For us, the tradeoff was worth it.

I then spent all my free time finishing my basement, putting in a family room and bathroom. I didn't all the work myself rather than paying to have it done. For us, the tradeoff was worth it.

When we had two children, I decided to go back to school and get a Masters degree while still working full time. It took up a large percentage of my free time for years. For us, the tradeoff was worth it.

Over my career, I averaged 55 hours per week. At the very beginning, I worked less. As my career advanced, I worked more. As I went up the ladder in management, I worked a lot more. When I was nearing the end of my career, I worked a bit less. Overall it averaged out to about 55 hours per week. For us, the tradeoff was worth it.

Think it over. Discuss it with your wife. You'll find that path that works for the two of you.
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Re: Quality of Life Pay Cut vs. Second Job Income

Post by dcop » Wed Jan 15, 2020 2:20 am

I've had 4 jobs in my 36 years of working post college then retired at 58 with a 1.8M net-worth. The most important factor to me each time I switched employment was to not work past 5pm and 40 hour weeks with over 40 hours only as occasional exceptions. Also never more than a 10 mile commute one way. I maxed out my 401k and IRA every year and when HSA's started much later maxed those out too. I had plenty of time with my family in my kids growing up years and also plenty of time with my fishing buddies. I don't regret any of it and feel it was the best route to quality of life. My highest annual salary: 68K. My retirement investment gain in 2019: 428K. I'm not saying you or anyone else in your situation would be happy at 40 hour weeks but there are other ways to accumulate wealth over the working years than by working many hours and multiple jobs.
Last edited by dcop on Thu Jan 16, 2020 12:31 pm, edited 1 time in total.

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Re: Quality of Life Pay Cut vs. Second Job Income

Post by cmb16 » Thu Jan 16, 2020 11:21 am

I appreciate the responses, they do help in re-framing my perspective on how much I currently work. Many of my peers end up working second jobs and put in just as many hours, so it becomes normal to a degree. But many of them also don't save anything, spend like crazy and aren't as financially stable. I guess its important to just remember that the finances are there to support your live, and not the other way around.

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Re: Quality of Life Pay Cut vs. Second Job Income

Post by StealthRabbit » Thu Jan 16, 2020 11:42 am

Yes, your income is just another tool to navigate life.

Family is important, and nothing equals the time you spend with them.

As toddlers / short term you could increase work hours IF as previously mentioned (EMS) they are 'sleeping' hours for your family anyway and you still have long extended times together.

I would organize optimum time at home, and align with spouse on objectives and reasonable review.

It could be a perpetual bad habit to aspire to work demands (BTDT).

If the side gig is a nice diversion and can grow into self supporting business, that may ultimately grow your financial independence from demanding employment.

Remember 'stuff happens'
1) you could get injured (or worse)
2) kids grow up (or get LT illnesses)
3) Spouse may have higher needs than you realize,
4) extended family may need your time or help.
5) your time may be more valuably invested in people rather than career.

But... I am not the one to give advice... I always worked 3 jobs (2 on weekends), lots of OT and night shift + homeschooled my kids and farmed during the day, and cared for a disabled father. Sleep is optional. This was not a good plan for supporting a healthy family.

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Re: Quality of Life Pay Cut vs. Second Job Income

Post by Mactheriverrat » Thu Jan 16, 2020 12:28 pm

More work . its a good way to get burned out. You won't get any pats on the back from a company that will have you replaced before your body is in the ground.

Quality of Life = Enjoying life.
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Re: Quality of Life Pay Cut vs. Second Job Income

Post by AerialWombat » Thu Jan 16, 2020 12:53 pm

cmb16 wrote:
Tue Jan 14, 2020 3:23 pm
I'm conflicted about whether to keep the business going (maximize my potential revenue) vs. selling it.
I just wanted to briefly address the business sale component. I obviously know nothing about the scope of work of your side hustle, but I can make an assumption. Most accounting side hustles are either doing monthly bookkeeping, or doing tax return preparation.

These days, the market value of such operations is low, and declining. Many of these are selling at multiple of 0.7x annual gross receipts, and that’s if the practitioner stays on for 1-2 years to transition the practice, with an earnout. For just a sale and leave, meaning you’re really just selling your “book” (client list), sale multiples are far lower.

If you have a traditional bookkeeping/tax prep business, it may not be worth a whole lot. I’d offer around 0.2x or 0.3x at best for such a biz these days, with you leaving.

Just wanted to point that out for you to take into consideration, in case the business sale money was in any way an important piece of the decision process.
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