New job opportunity .. would you take and how to negotiate and invest

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Topic Author
joetro29
Posts: 18
Joined: Sat Dec 05, 2015 11:10 pm

New job opportunity .. would you take and how to negotiate and invest

Post by joetro29 » Wed May 20, 2020 10:20 pm

Hello,

A multi-part post:

Basics:
37 (as of today!), single, lives in Texas. 4 miles from folks, both with chronic and major medical conditions. Very close to them. Only child. Will inherit after they pass on. Do not want to think about that for ages :)
22% federal tax due to how much of my salary (just over 100K) I shelter. Also a lot of my income is through dividends and capital gains, taxed at lower rate. No state income tax.

Taxable: About 1.3 million, split between some funds and a few individual stocks. Biggest holdings are Contrafund (22%), Vanguard Total Stock Market Index Admiral (14%) and Vanguard Mid Cap Index Admiral (12%). Also hold small cap index, midcap growth and total international index among other Vanguard funds. Tilt toward large/mid, growth and dividend payers. Did some TLH in March to get out of some underperforming funds and consolidate a bit. Have a lot of capital gains, so avoid selling whenever possible and instead rebalance a bit through dividends/capital gains.

Retirement:

Pension - Just under $15000 a year. Formula is 2.3% * average 5 highest salaries
Government 457b, traditional - $83000, all in T Rowe Price Dividend Growth
Government Roth 403b - $22000 - all in Fidelity Contrafund K Class
Roth IRA - About $84000 - split about 55/45 between Vanguard REIT Index and Vanguard Dividend Growth

Cash/CD/I Bonds/Intermediate Term Bond fund - about 110K , although 40K of this is due to a recent mutual fund sale that I have not yet reinvested in Vanguard MIdcap Growth Index. Used to save for new car and maybe downpayment if ever buy a small condo or townhome (love renting for now and maybe for ages).

Expenses about 2-3K per month, less now due to no travel and reduced eating/bars. Rent about 1200.

Contribute to my pension (7.7% but going up to 8 in September - started out paying like 6.2 or 6.4 in 2012), max out Roth IRA depending on donuts hole/income, 19500 each to 457b and 403b. Started 403b recently by not reinvesting contrafund dividends and capital gains.

Employed as psychologist in academic medicine. Am board-certified, which is rare among psychologists (3%). State employee. Been there 7 years, 5 as faculty. Due to a few reasons, I've been looking for 50% clinical work to shift partially away from research. On the most clinical track for promotion. Promotion timeline generally 7 years and confers $5000 salary increase. Been looking to shift partially away from the boss for a few reasons. As of yesterday, a few faculty told they are being let go. I'm more secure but do not want to work for boss 100% as of September.

Been hunting for direct clinical where I work, no good bites, started applying for a few jobs, have a defacto offer at a group private practice. Thinking of staying 50% at state job and 50% at group practice.

Group practice is very unique - minimum salary, offers some paid leave and holidays, over time earn more of percentage per client (start at 60%, then 65, then max out at 70) and then profit sharing and part ownership. Owner is the only full-time psychologist, 70, and looking to expand practice and find a succession plan. Clients a mix of mostly insurance and also private pay. No retirement or health insurance offered but could over time if expands enough. 1 week paid leave after first year, 2 weeks Years 2-4, 3 weeks 5 and beyond. Working part-time means would probably get half of that. Already at 3 weeks vacation at current job.

Downsides - would have to pay $320 a month to keep medical benefits, would still earn pension credit but not be able to replace lower income years, would not be able to max out both retirement accounts as would not earn enough if only working 50% job. Could also mess up promotion timeline (might take longer if working half time, might have to change promotion tracks, which takes 3 additional years). Could potentially earn more in salary, especially over time, but generally practice starts out a bit slowly. Is obviously risky (if don't see/bring in patients, don't make money). Owner seems like a well-liked and good businessmen with a backlog of clients to be seen from medical practices (i.e. insurance clients, where I would earn less than private pay but have more consistent caseload).

After a lot of thinking, I think I would like to take the job offer. Have a few other preliminary interviews, including with a premier, larger group practice in town where I know the co-owners, but not as far along in interview process. Just been a lot of interpersonal drama at work and tough culture. Ready for a change, but enjoy research and the variety. Do not want to give up benefits either.

Questions:

1) Is taking the job a poor idea now? Had there not been the big financial stress at current job, I'd feel a little more secure, but things are really tight in soft money. Therapy has changed with COVID with more shift to online.
2) What if anything is it worth negotiating for (I have never negotiated before!)? Owner has been very transparent. I could imagine asking for a little more vacation leave, maybe a professional development day, and maybe a little professional development money. The most obvious thing would be to ask to start at a higher cut, but I'm not sure he would go for that. Really, the best way to earn more is to build the practice faster and to fill up my caseload faster.
3) If I do take the job, I couldn't put away the 39K between the two retirement accounts. Should I prioritize the traditional or the Roth?

Thank you all!
Last edited by joetro29 on Thu May 21, 2020 5:34 pm, edited 1 time in total.

Olemiss540
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Re: New job opportunity .. would you take and how to negotiate and invest

Post by Olemiss540 » Thu May 21, 2020 7:12 am

It appears you could almost retire TODAY given your level of assets and current spending.

Amazing that you saved so much by 37. You have earned the right to do whatever the heck you believe you will enjoy the most. Goodbye drama, hello private practice. Not going to be much help on the negotiating side of things but am sure you will be fine regardless. Happy Birthday!
I hold index funds because I do not overestimate my ability to pick stocks OR stock pickers.

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Watty
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Re: New job opportunity .. would you take and how to negotiate and invest

Post by Watty » Thu May 21, 2020 7:29 am

joetro29 wrote:
Wed May 20, 2020 10:20 pm
As of yesterday, a few faculty told they are being let go. I'm more secure but do not want to work for boss 100% as of September.
Between not getting along well with your boss and going part time I would be concerned that if there are more cutbacks that you could be targeted if there are future layoffs.
joetro29 wrote:
Wed May 20, 2020 10:20 pm
Owner is the only full-time psychologist, 70, and looking to expand practice and find a succession plan.
He or she should have been working on a succession plan 20 years ago. There were not many details but if they died tomorrow then would the business even continue? If you have not checked it out yet you should ask your question over on the White Coat Investor web site which is run by a doctor who is a regular poster here.

https://www.whitecoatinvestor.com/

Jack FFR1846
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Location: 26 miles, 385 yards west of Copley Square

Re: New job opportunity .. would you take and how to negotiate and invest

Post by Jack FFR1846 » Thu May 21, 2020 7:35 am

What about opening up your own practice? Where I am, people like you are impossible to get appointments with and are full up with work with the "not accepting new patients" sign on the door.
Bogle: Smart Beta is stupid

Topic Author
joetro29
Posts: 18
Joined: Sat Dec 05, 2015 11:10 pm

Re: New job opportunity .. would you take and how to negotiate and invest

Post by joetro29 » Thu May 21, 2020 12:20 pm

Thanks, all. This is very helpful. A couple of points and responses:

I'm fortunate in that I had some parental help with investments when I was very young, but I've also worked hard to save well and invest into Roth even from high school earnings.

I do not aspire to own my own practice or start my own practice at this point. I would miss the benefits and interaction with others, and I do really enjoy research and the variety so am not ready to go 100% clinical at this point.

I like WCI and read it often.

I understand that on the one hand 50% is more vulnerable, but I actually tend to see it as being more secure. I'd have a clear funding line on projects 2020-2021 for this time and if my June grant hits would pretty much be solidified for 50% until early 2024.

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BolderBoy
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Location: Colorado

Re: New job opportunity .. would you take and how to negotiate and invest

Post by BolderBoy » Thu May 21, 2020 5:02 pm

joetro29 wrote:
Wed May 20, 2020 10:20 pm
... lives in Texas.

22% state tax...
???
"Never underestimate one's capacity to overestimate one's abilities" - The Dunning-Kruger Effect

fabdog
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Location: Williamsburg VA

Re: New job opportunity .. would you take and how to negotiate and invest

Post by fabdog » Thu May 21, 2020 5:21 pm

Thinking of staying 50% at state job and 50% at group practice
Do you have that option, more specifically will the state job allow you to drop to 50% and have an outside employer?

I agree with the posters above, you are in a good position to do what makes you happy

Mike

NewMoneyMustBeSmart
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Joined: Sat Jun 01, 2019 10:28 pm

Re: New job opportunity .. would you take and how to negotiate and invest

Post by NewMoneyMustBeSmart » Thu May 21, 2020 9:18 pm

BolderBoy wrote:
Thu May 21, 2020 5:02 pm
joetro29 wrote:
Wed May 20, 2020 10:20 pm
... lives in Texas.

22% state tax...
???
Last edited by joetro29 on Thu May 21, 2020 5:34 pm, edited 1 time in total.

Topic Author
joetro29
Posts: 18
Joined: Sat Dec 05, 2015 11:10 pm

Re: New job opportunity .. would you take and how to negotiate and invest

Post by joetro29 » Fri May 22, 2020 9:19 pm

Curious on other opinions on the negotiations and investing pieces?

Topic Author
joetro29
Posts: 18
Joined: Sat Dec 05, 2015 11:10 pm

Re: New job opportunity .. would you take and how to negotiate and invest

Post by joetro29 » Sun May 24, 2020 10:54 am

Bumping

Topic Author
joetro29
Posts: 18
Joined: Sat Dec 05, 2015 11:10 pm

Re: New job opportunity .. would you take and how to negotiate and invest

Post by joetro29 » Thu Jun 04, 2020 12:31 pm

To close this loop ... I suddenly found at 3 am today that I was no longer considered a fit for the position, as they are looking for someone with private practice experience. This is conveniently after I sent a (very light) negotiation e-mail a few days ago and was never mentioned as a concern before.

So, the search continues. Thanks to all of you for your feedback.

CoAndy
Posts: 601
Joined: Thu Jun 06, 2013 4:45 pm

Re: New job opportunity .. would you take and how to negotiate and invest

Post by CoAndy » Thu Jun 04, 2020 2:20 pm

Sorry to hear that. Good luck to you!

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