The Curse Of Making Too Much Money And Not Pursuing Your Dreams

Photographer With Big LenseThe luckiest people on earth are perhaps those who don’t make a lot of money.  They’ve got very little downside and can really pursue their childhood dreams.  Imagine if from the moment you graduated college, you landed a plum corporate job that paid just enough to keep you motivated, but not enough to enjoy your freedom.  The longer you work the more you realize there’s really no escape, because there’s simply too much at stake.  This is the problem that plagues my friend, Lyndon.

THE STRATEGY CONSULTANT WHO MAKES BANK

Lyndon just turned 30 and is having a mid-life crisis.  He’s worked for 8 consecutive years at McKinsey & Co, one of the prominent management consulting firms in the world, and makes roughly $300,000 as an “Engagement Manager”.   Obama says he’s rich, but Lyndon isn’t buying it when his 1,200 square foot, two-bedroom apartment in New York City costs $5,000/month.  If he wanted to buy the condo, he’d have to shell out over $1,200,000, even in today’s market.  To add further injury, $300,000 is really only $180,000 or so after federal (33%), state (7%), and city (4%) taxes!

All Lyndon ever thinks about is being a National Geographic nature photographer.  Every single vacation is planned around some remote destination that takes two days to reach, and therefore another two days to return.  Yet as a consultant, Lyndon is at the mercy of his clients.  Instead of traveling to Mt. Kilamanjaro, he’s on a plane to Minneapolis in the middle of winter.

In 5 years, Lyndon knows he’ll probably continue to make more money and perhaps make millions as a partner in his 40′s.  But what’s the point if he’s not completely happy?  The 65 hour work weeks and minutiae are wearing his soul thin.  He wants out.  Yet, how does a 30 year old, who’s on a straight path to multiple-six figures rationally decide to quit his job and try and make it as a nature photographer?

NO SYMPATHY

An ant is playing the world’s smallest violin somewhere underground.  While millions are unemployed, Lyndon is on a path to financial freedom, with one of the most prestigious companies in the world, yet he’s unhappy.  He doesn’t feel the plight of the less fortunate, who in his eyes are just in temporary dislocation.  Everything to Lyndon is logical.  When markets crumble, people get dislocated, but eventually get relocated when the markets rebound.  Oh, how Lyndon too, wishes he was dislocated.

Unfortunately, nobody will give Lyndon much sympathy, except for his fellow well-to-do friends.  Ironically, it is the sympathy that Lyndon seeks, which makes him only hang out with people of his same socio-economic class.  He understands that most of America won’t understand him so he shuns most people.

ONE TEMPORARY SOLUTION

In two years, Lyndon will have served 10 years at McKinsey, a long enough period of time for him to not feel guilty about taking a sabbatical.  He’s never taken a 2 week vacation at once, and he’s never taken more than 4 weeks off for the entire year.  How could he, since the firm is paying him so much?  It wouldn’t be fair to his clients he justifies to himself.

The problem with taking a sabbatical in two years is that he still has to work for another two years!  He wants to see the world now.  He’s restless, with unwavering confidence that he can always come back to the industry of advice and fortune.  If he can’t and ends up spending most of his money, he can always get a temporary loan or work part-time to extend his dreams.

WALKING AWAY

Lyndon decides that one of his New Year’s resolution is to reboot.  After his bonus hits his bank account, he wants out, but is afraid to pursue his dreams.  He’ll have $250,000 in savings with no debt to his name if he quits.  Remember though, that if he works another year, he’ll save another $80,000, and then another $80,000+ every year forever.  The key issue is the word “forever.”

* UPDATE: To see Lyndon’s response, please read “Wealth Is An Illusion Of Happiness”

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Regards,

Sam @ Financial Samurai – “Slicing Through Money’s Mysteries”

Sam started Financial Samurai in 2009 during the depths of the financial crisis as a way to make sense of chaos. After 13 years working on Wall Street, Sam decided to retire in 2012 to utilize everything he learned in business school to focus on online entrepreneurship.

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Comments

  1. Retired Syd says

    Well I know exactly how he feels. But when I felt that way, I made a plan to escape. I started socking away some of that money so if I got really miserable I could leave. In the end, I decided I would be happier with a downsized life, living off the money I saved while unhappily working, and retired at 44. I still feel young and like I have my whole life in front of me. And Lyndon could be starting way before I got serious about escaping, getting out at an even earlier age.

    The trick is to keep the lifestyle inflation from creeping up while you work on your escape. It’s easy to use the money to self-medicate to treat your unhappiness. But if having the freedom to pursue whatever really thrills you is really important, you’ll be able to keep the focus.
    .-= Retired Syd´s last blog ..Living Well in Retirement =-.

  2. Matt says

    I’m going through a similar decision as Lyndon at the moment. However, after my contract is done at the end of this month, I am going to take a couple months off and work on my own projects. I make considerably less money than Lyndon but have about 12 months of expenses saved up to offset the risk.

    I have done freelancing before though, and since I live modestly, I can work part-time to cover my living expenses.

    This really comes down to a values decision for Lyndon. Right now, he values money more than his time and happiness. This is backwards as most people acquire money so it can be exchanged for time and happiness. Why not just skip over the middle part?

    If he’s worried about getting out of the “game,” he should try to line up some part-time consulting work as others have mentioned. If he is going to make the decision to quit, perhaps he can even approach his boss at McKinsey and offer to go part-time. If they reject, then he has nothing to lose as he was going to quit anyways.

    A book I recently read that helped me make this decision was “How I Found Freedom in an Unfree World” by Harry Browne. This book may help him as well. The author address the “Career Myth” that we have been fed our whole lives that may be holding back Lyndon from making the right decision.

    Best of luck to him.

  3. MossySF says

    I am a high earner and once in a while, I’ll declare in moment of frustration that it’s time to bail. Then my wife will slap some sense into me as she won’t have me lounging around the house doing nothing. The reality is I am a driven person and I am already doing the job I want as I’ve known I wanted to work with computers since I was 15.

    The advice I will offer is to cut away at the fat. There’s so much wasted money, time and effort on things we do just because of expectations and image. For example, we used to live in a 600sf apartment in San Francisco — while raising 2 kids in this space. People think you immediately more space once you have kids incoming and yet I feel like it was easier to keep track of them in a smaller space. (Does somebody single need 2 bedrooms 2 baths?)

    Not spending money on things we don’t care about let us saved up capital to pursue the avenues we do care about.

    • Edward - Entry Level Dilemma says

      My wife and I are in the process of involuntarily downsizing from 900sq ft to something in the 700-800 sq ft range, because this is the only complex in town in our price range of this size, everything else is just a bit smaller. It’s going to require getting rid of our nice big comfy sofa. :(
      Now do we need 2 bedrooms? Not really, but it does make things a little less cramped. I can’t imagine 4 people in 600sq ft.
      .-= Edward – Entry Level Dilemma´s last blog ..You need a mentor =-.

      • MossySF says

        I guess it depends on how you grew up. I came to the U.S. when I was very young and in our first apartment, we were stacked 6 into 300sf maybe. (We had our own toilet but had shared showers in the building.) Yet I don’t remember it being an unpleasant time. I remember running around the complex with other kids in the building exploring & playing games and waking up Saturday mornings to watch cartoons — it was a fun time. Of course, we must have been terrors for our parents with so many packed in a small area. :)

        In any case, I do live in a larger space now (bought a 1500sf condo overseas) and the reality is we don’t use half the space. We could live just like any local family here in 750sf and be just fine. But living in 600sf for the first 6 years let us save a nice chunk of money to give us the possibility to be in this position today.
        .-= MossySF´s last blog ..Tour group vacations =-.

  4. Ely says

    I know a Lyndon. I have sympathy up to a point; most of us go through stages of not knowing what the right choice is. But my friend “Lyndon” has been complaining about his job for as long as I’ve known him: 10+ years. For at least the last 5 he’s been saying next year, next year he’ll leave. Bitch and moan, whine about his $100k+ and his travel and his show-biz perks, ignore or shoot down all advice and helpful suggestions. I’ve long since run out of sympathy. At some point a guy’s gotta put on his big boy pants and take responsibility for his life. Hate the job? QUIT. Don’t want to quit? Then man up and quit bitching!!

    IMO $250k is plenty to start over in a new life, and FAIL. Repeatedly. He’s still young and single, he can do anything he wants! He might end up sorry if he leaves, but if he stays then sorry is guaranteed. Is all that money worth getting to the end of your life and knowing you never even tried to do what you love?

  5. Alex says

    I have a friend that makes about 500 thousand a year, still te unhappiest person I know, which is sad. Complains his job is so demanding he doesn’t have time to date, find the right woman n he’s lonely. I was making about 40 thousand a year n still saving over half my check and I’m happy to go to work everyday. It’s fun for me because I love what I do. I’m in the Navy for 8 years now and it’s a dream life. I couldn’t complain. Wish my friend would do what he loves and open up a gym.

    Lyndon should just go and worry about the consequences later. You don’t get back time.

  6. Kelley says

    There’s really no point in asking whether or not Lyndon deserves our sympathy. Really, does it matter whether or not we feel sympathy for him? It doesn’t change his situation.

    Even if Lyndon becomes a very successful photographer, he will never make $300,000 a year. Is he willing to give up such a huge income stream, or not? That’s really all there is to it.

    If he wants to find out, he can gradually ease himself into photography by going to photo shoots, classes, etc. But sitting around feeling angst for himself and sympathy from others isn’t going to help anything.
    .-= Kelley´s last blog ..The Epic Battle of Salt vs. Pepper =-.

  7. Another Lyndon says

    I am in a similar situation. Like Lyndon, I don’t expect other people to understand. While my job is not fulfilling, I don’t have a burning passion to fill the void. But I am still committed to getting out and making the most of my life. Many of my colleagues are in the same boat. Some have golden handcuffs; others have analysis paralysis.

    I decided to make a plan. Currently, I have ~$200k in non-retirement funds and ~$100K in retirement funds. I plan on significantly cutting living expenses so I can save $70K a year in non-retirement funds and $20K a year in retirement funds (likely going up every year). I am currently in my late-20s and anticipate living expenses under $30K a year. At a 4% withdrawal rate, I should be able to sustain myself at $30K a year until retirement age with a nest egg of $750K in non-retirement funds. firecalc.com says I can. I should be able to hit $750K in five years. When I hit retirement age, I expect that my $100K plus whatever I put in the next five years to grow significantly until I am 65, which hopefully will last for the rest of my life.

    Now people are undoubtedly going to say: what if you get married / have kids, etc.? I’m fine with working. I just don’t want to be tied to a high paying job I don’t like. If I have kids, I’ll work a $30K per year job and save everything I make and put it towards the kids. Hopefully that will be a part time gig so I can enjoy myself at the same time.

    There are other things I want to figure out. For example healthcare. Maybe I want to start a HSA with my employer’s high deductible plan now so I will have a decently sized HSA after five years.

    At least with this plan, I will have a solid financial foundation to pursue other interests.

  8. Jan says

    Lyndon- you are describing my jazz musician turned corporate lawyer brother in law. At 30 he had a good amount in the bank working for a great bank. At 40 he and his wife lived the high life (with the bass in the closet). At 50 he was dead. My sister now lives on the money he made- taking pictures of the cactus in a new backyard.
    Be careful about making it all about money!

  9. patrick says

    Lyndon is thinking in a binary fashion. He sees only two options: Quit, or, Stay. These are the extremes. He needs to consider option 3: Modify. He should see if he can negotiate an arrangement where he gets paid less but only works part time, in bursts. I.e. work for a month, vacation for a month. Work for a month, vacation for two months. or something similiar. Perhaps he can do this within McKinsey, or perhaps he would need to do it outside of McKinsey as a freelancer. Either way, has he considered this option? Would his work lend itself well to this project based format? It would seem to solve his quandry.

    Another thing: Does he need to be in New York to do his work? Is it possible to leverage the internet to enable him to work remotely? He could work 65 hours a week as he traveled (theoretically).

  10. Bankruptcy Ben says

    Lyndon doesn’t get a single bit of sympathy from me. Personally financial freedom is first. Put the money away THEN i’ll do what makes me happy, when i work that out. At the moment I’m 29 and 2 years away from owning my house outright. By 40 no paid work required for me!
    .-= Bankruptcy Ben´s last blog ..FFJ – 44 Ways to Save Money =-.

  11. Kirsi L says

    I thing working for 12 more years and retiring early is not going to make it for Lyndon. After that time, he’s so well adjusted to his lifestyle that he would have trouble filling the hours. I like the suggestion someone else made – make a commitment to have a photo portfolio in, say, 6 months. Make an idea to photograph something – like the effects of the housing bust, or something less obvious – and offer the series somewhere. Open a photo blog and see if that takes off. He could even write about his job – privately, or anonymously in a blog – just to clear his thoughts. To me, the situation sounds like he has not given it yet enough thought.

    I find it really weird that one could not start a passion as a hobby and later decide what to do. This way, the two years for sabbatical will be easier to bear.

    In any case, the guy needs a hobby ;)

    Ps. If someone is really, really fed up, there is no need for decision. Then, there will be only one choise.

  12. Jerry says

    This is a great topic and one that my wife and I recently discussed. I did it. I walked away from a stable job with health insurance for my family to go and pursue my dreams. I’m still in the midst of it and it’s not easy but I’m hopeful that it will lead to success. It’s a risk but isn’t anything worthwhile a risk?

    • admin says

      Jerry, good luck in your new venture! How long were you in your stable job for, and what was it that made you take the next step? How long were you thinking of doing your own thing?

  13. jon says

    Great post! Hits home with me. I remember an internship I had in the finance world and I learned this lesson then. The gusy around me were pulling in mid-six figures and up, some in the millions. They kept saying they’d quit once they made X or hit a certain age and then relax, coach high school sports, etc. Then the guys who were in their 50s and 60s said they’d thought about that once too but then this life became the only life they knew and it was too scary and lonely to leave, so they just kept on doing it. What good was all that money then?

    • admin says

      It really really is hard to leave all that money behind Jon. If you’re making say $500,000-$1million a year, all you gotta do is work 12 more months and collect that extra 500K-1mil! Hence, people just stick with it, b/c the money is too great to pass up! That is why I write it is a “curse”, but not really.

      I think most would be happy to make that much money!

  14. EveryPesoCounts says

    Just like uncle Ben in Spider Man said.. .With great power comes great responsibility. I feel for him as I find myself in the same trap. Yes, I get a decent salary over local standards but in my heart, I wanted to do more than just earn from what I currently do.

    I figured out that the more we earn from a high paying job, the more scared we get in pursuing our dreams. I try to get away from this thought. I want to believe that I’ll be free someday. It’s like going out of the matrix. It’s a mental challenge.

    At 25, a friend told me that I was already in midlife crisis. But I guess I should be happy that I’m realizing this early and there’s so much that I can still do about it. Every second, every hour, every day to me is important. I know that if I don’t act now, my dreams would forever be just a dream. I guess for Lyndon, he could keep himself motivated and optimistic towards his dream if he could find people who are there and has the same passion. Somehow, I think the windows of opportunity will open and get him there.

  15. Wirewalker says

    Sympathy for him? Yes. It is very difficult to be in such a position, what when you have surrounded yourself with family and friends who only know one way of living. Plus, you earn a LOT of money… but rarely get the time off to enjoy it. Well, he has to wake up and face his fears. I can really relate to him, being 30 myself, single and has had a long corporate stint. It took me 10 yrs to realize I’m the only one who’s keeping myself in prison.

    BUT… there’s a lot of truth in that zen saying “Leap and a net will appear.” It just takes a lot of courage and people would rather be where it’s comfortable. Life is challenging for a freelancer/artist/researcher — whatever project there is to conquer — but you know you’re in a good place when you have no time to complain coz you just love what you do and you’ll do it for free if only you didn’t have to eat. =)

  16. Ed says

    It really depends on what’s more important to him, money or happiness. I for one always follow happiness, but I’ve never made that kind of money a year, so I can’t really say if I’d leave the job or not. However, if he’s miserable, then I’d say go for what he’s always wanted to do. He has money saved to fall back on for a good while.

  17. Buck says

    No sympathy money wise, but some sympathy life and dream wise… I think he is slightly cursed. Society puts so much focus on money that dreams and being happy fall by the wayside. Since the grass is greener on the other side, almost everyone else around him won’t understand his plight as they are green with envy for his bank. However, he does have a choice. He can slowly ween himself off, take a lower position or maybe use his weekends to pursue his photography dream. It almost seems it’s all in or all out. Why not find a happy medium? The story does illustrate that money can’t buy happiness. Good lesson for everyone, except for poor Lyndon. Can’t wait to read the update. :)

  18. Concojones says

    Sympathy for Lyndon because I’ve been there too (entry-level in a related career).
    He also deserves a kick in the pants for not making a decision for 8 years. You get most out of life if you follow the adage “fail fast and often.” It’s about time Lyndon decides to either enjoy his current career or go do something else – ideally he would have done that 7.5 years ago, but it’s never too late.

    I guess Lyndon’s problem is that he can’t make a decision because photography is still a dream and not a real option. He has never tested that career, which is what he should do IMHO if he wants to make a good decision. Preferably while working at McKinsey. But even if he decides to quit, there’s always a way back in (into management consulting), assuming he’s prepared to take a step back on the career ladder.

    My advice: Lyndon, enjoy your job until you’ve got a REAL alternative; then decide which one career you’re going to enjoy next.

  19. Concojones says

    Sympathy for Lyndon, because I’ve been there (entry-level job in similar career).

    A kick in the pants for Lyndon for wasting 8 years in his state of paralysis. The lesson I learned is you decide to enjoy your current career until you’ve got a real alternative (which he has not yet); then you decide which of both careers you’re going to enjoy next.

    So try out that photography career, preferably while still at McKinsey, or quit if necessary(I’d think you can get back to your old career but you might have to take a step back on the career ladder). I don’t really like the option to wait 2 years for the official sabbatical because I believe you get most out of life if you “fail fast and often”.

  20. Tony says

    I’m only 27 but am I’m kind of in a similar situation and this post thread has brought some inspiration and perspective. I was doing B2B phone sales for a large and popular internet company. benefits were unbelievable and they did 401k matching. However, as time grew on I began to realize that I was living the middle class trap. I would worry about work when I was not at work and my level of fitness declined.

    During the same time, I was hit by a car. Luckily I got out in one piece despite 2 years of pain and suffering. but point is I wounded up with a settlement check of $280k. I have around $270k to live off of and let me tell you, getting this lump sum of money all at once can create fear and lots of other mixed emotions. fighting these emotions is one of the hardest things, which is why I think so many lottery winners become bankrupt.

    However, the “young” and youthful part of my brain says I now have what I need to pursue my own dreams. I took the biggest leap of faith I ever could do in my life by quitting a good job, rejecting offers for other high paying jobs and instead took a job paying minimum wage, but it does have potential to earn me more. Subsequently I can now take classes for my own interests that can lead the way to owning the business of my dreams in 3-5 years. Hopefully as I build up with my new job I can earn some income off investment capital.

    But at one level my heart feels a little more free and it gives me an outside perspective from how many people just go by and by working 8-5 every day without really stopping and thinking much.

    if anyone has advice for me that would be much appreciated!

    • Financial Samurai says

      Hi Tony! Thanks for sharing your story! Are you physically all good now, and still have $270,000? If so, do you feel you are better because of the experience? If you knew you would get $280,000 before the accident, would you be willing to go through the experience again?

      My advice to you is to do exactly what you want to do. Try it out for the next 3 years and see where you go. If you go nowhere, you still have the money and then can find something more practical to do. Good luck!

      How did you find this post btw? Thnx, Sam

      • Tony says

        haha! Would I do it all over again? Hmm, well I certainly wouldn’t jump in front of a car hoping to get hit and bounce off the hood, we’ll out it that way, lol.

        Yup,, I have most of the money still, but am living off of it right now since I did the crazy thing and illogical thing by quitting my 8-5 job as a cubical monkey. Right now, I’m focused on getting some part time work doing what I want to do and learning about investing so I can have some of that money grow.

        I found this post one frustrating afternoon by going to yahoo and typing in making a lot of money vs following your dreams. Put it this way, I gave up some very very good and lucrative sales jobs and go with my own conviction. Is it scary? Yes very, but I am banking on that I will look back 3 years from now and will be happy with my decision. Thanks for the advice!

  21. Life Coaching says

    Yes, I totally feel sorry for him.

    Before he started this job he probably believed that if he worked hard and made lots of money, that would in turn bring him happiness. But he’s now realised that it didn’t – so he’s now asking himself ‘what’s the point of it all’ and ‘what DO I have to do to be happy’. He has the beautiful home and the money in the bank, but his life still sucks! He’s finally realised that it’s not all about the things that we can by and to make it worse for him he’s working in a job that he doesn’t even enjoy!!

    This is actually much more common than we think. How many people do you know that seem to have lots of lovely material things, but they are deeply unhappy? How many people do you know that really HATE their job.

    The reason that this is so common is because people spend more time planning their weekly shopping list than they spend planning their life! If you don’t plan, things tend to happen by accident and probably not the things that you wanted to happen. Because they weren’t clear about what they REALLY wanted or what was truly important to them, they got what they thought they wanted (‘I want money’ ‘I want a new car’ etc). I did it too for many years, until one day the reality of this hit me!

    It’s not difficult to plan for your future. Just google the ‘be do have’ coaching method and give it a go. It will take you no more than a couple of hours maximum.

    Mel

  22. Büyü says

    Good stuff man. There are plenty more out there with practically no savings who quit their jobs and follow some dream, so with 270k in the bank, you should feel great!!

  23. sandy says

    great post and responses. i’ve been spending the last few weeks debating whether to travel before grad school or spend the next couple months saving. this has definitely helped me put things into perspective…i don’t sympathize with his situation –but i definitely understand it– because he has the power to change it.

    i’ve decided that it’s probably less risky for me to take the trip now before i accumulate more school debt and have a time/life-consuming 9-5.

  24. Chris says

    I’ve been there and I’ve done that. Owned a real estate company for 18 years, made great money, but really felt trapped. Everything depended on me being there or being involved even on vacations. Sold the company and followed my dream as a trainer, coach and mentor. Happiest I’ve ever been!

  25. Greg Miliates says

    Making a lot of money or having excellent employer benefits can certainly be golden handcuffs. But life goes on, and unless you’re OK deadening your soul, it’s wise to work your dreams into your lifestyle.

    The lifestyle business trend is all about developing a way to earn a living while pursuing your dreams. By creating work that pays the bills AND gives you the freedom to pursue your dreams, you have the best of both worlds. Typically, most people who pursue a lifestyle business have work that allows them to work when and where they choose–even from a cafe in Morocco–without having to put in crazy hours.

    One of the easier–and more profitable–ways to build a lifestyle business is by consulting, since a consulting business has:
    –>low start-up costs,
    –>flexible hours,
    –>high hourly pay rate, and
    –>you likely already have the expertise to get started.

    I’ve found that fear often stops aspiring consultants from starting a consulting business, and on my blog (http://www.StartMyConsultingBusiness.com), I talk about how to overcome those fears. I also talk about practical, concrete things you can do to start and run a successful consulting business, along with tools, tips, tricks, and techniques for automating your business and keeping costs to a minimum.

    One of the neat things about becoming a consultant is that you DON’T need a pile of cash to start a consulting business. For example, you can create a professional website for under $100–typically in an evening (I have a free ebook that shows you exactly how to do this, even if you’re not a techie).

    I started my consulting business over 4 years ago as a part-time way to make extra cash, and it’s grown into my full-time endeavor, where it’s the sole income for my family of 4 for over 2.5 years. I make several times what I used to make at my day job, and have much more flexibility.

  26. retiredearly says

    I started working for a Big 6 firm out of college and it ultimately led to a job in their overseas office. I made partner in 10 years and made a lot of money. I did not hate my job but certainly never loved it, seems as if I hardly liked it much of the time.

    I saved a huge chunk of what I made and retired at 40 and love it.

    I do not feel sorry at all for Lyndon. If he can resist the temptation to increase his lifestyle in sync with each raise/bonus, he can set his goals and get out while young.

  27. retiredearly says

    I never did the calculations to figure out what exact % I saved, I would guess 60-75%. I have always been frugal so I just kept it up and did not buy extravagant things. I travelled often with work and would try to add a day or two to these trips. I have been fortunate to see 30+ countries, most of these tied to work.

    It helps that my wife is more frugal than I plus that we spent most of the time living in poor countries. We have a child that occupies lots of our time so boredom has not been an issue. Also, I have easily dropped the extra pounds and am very active these days. Several health related issues seem to have disappeared…

    I was very fortunate and was paid well but I know many in the same boat that still slave away as they did not save…

  28. roy says

    FS you mentioned “I’m definitely curious, as $1.6 mil can provide $54,000/yr in risk free interest income at 4% now. ”
    Where can you get risk free 4% nowdays? I really need to figure out how much I can save and just live of interest. If I can live of ~50K/year how much do I need in savings. 5mil?

    • Financial Samurai says

      The fact of the matter is, you can’t without risk. I have 7 year CDs at 4% and 4.1% that have 3-4 years left on them. I will cross that bridge when they expire. The environment can be much different then.

  29. David says

    Not sure i get Lyndon. If he is so confident he can return to work and make the same or more $$ after a two year sabbatical, what’s his problem…or is it that he is afraid he WON’T be able to resume his prior earnings path?

    I am 53, have saved a chunk that is well in excess of anything in any of your savings charts on this site but still have a problem walking away. I recently made a deal with my company to take a 30% pay cut in return for less responsibility and more personal time but still have this craving to completely walk away. I think one reason for the inability to do so is simply the fear of what can go wrong after you give up a regular check (i wouldnt get it back at this point). I’m also a NYC resident so even though I’ve saved a lot, I would still need a pretty high yield to live more than a frugal existence (without taking on significant risk). $80k wouldn’t cut it without a significant lifestyle downgrade. Yeah, ok i’ll move to a big college town that has the best of culture and lower cost of living. I’ve read the MSN and Money slide show articles of best towns to retire……I don’t live in Magazine world… we dont all want to move to Austin TX or Madison, WI….

  30. Jim says

    I am somewhat in Lyndon’s shoes, but at the age of 48. I have finally reached a senior level position in a major corporation. My base is about $300,000, my annual bonus adds another $100,000, my LTI adds another $200,000 a year, a cash balance pension plan in which the company puts in 15% of my base, and a host of other nice perks. I have no debt, a paid off home worth $700,000, and over $2 million in savings. The problem is that I hate my job (due to a number of changes I will not go in to). I would love to let severed as the severance package is great, but that is not going to happen at my level and my position is critical to the business.

    My dream is to start my own company and it would be no problem to get the financial backing. However, several items hold me back. I was diagnosed with a melanoma 2 years ago. Getting insurance would be difficult. With a fear of a reoccurrence, it is great to have my current executive life insurance benefit that supplements my own term policies. Also, I have 4 kids to put through college (1 in already) and I also provide some support to aging parents.

    For now, I will put off the dream for another 5 years and then reassess.

    • Financial Samurai says

      Jim,

      Thanks or sharing. That is a great story, and hard to leave. I found a surprisingly no change in lifestyle after losing my income.

      You can absolutely engineer your layoff. See the book on the above right. You have more power than you think!

      Goodluck!

      Sam

  31. traineeinvestor says

    Sympathy? No.

    Lyndon has two things that a lot of people do not have:

    1. choice – the option of staying in his high paying job or taking a break without breaking the bank

    2. opportunity – the opportunity to either stay in a high paying job and become financially independent at a young age or to pursue his dreams for a while (but not for that long – his savings aren’t high enough).

    As a lawyer I havr been where Lyndon is. I opted to keep working until I had enough to retire forever. Having a wife and two young children and chosing to live in a very expensive city (Hong Kong) has meant that I will not be retireing until next year when I am 47 – not exactly young but young enough to pursue my dreams. Sure, it would have been nice to go (much) sooner, but if I had I would have been forced to look for work eventually with no certainty that I would find another high paying job. Like Lyndon and many others – I had choices. That’s not something to complain about.

    As the saying goes – you can have anything you want, you just can’t have everything you want.

  32. lhamo says

    To borrow a turn of phrase from Mr. Money Moustache: “Call in the waaaaah-mbulance….”

    Sorry, but I don’t have a lot of sympathy for Lyndon. He needs to decide what his real goal is, and then make a plan (financial as well as otherwise) for reaching that goal. Some questions to ponder:

    1) Overall, his savings rate is ridiculously low given his income. Doesn’t say if he has a spouse or kids, but if he’s got $180k post tax for just himself he could easily save half of that or more. He just isn’t trying very hard.

    2) Example of #1: Why spend $5000/month on an apartment in Manhattan if you are travelling most of the time anyway? Rent a studio in Queens, dude, and learn to take the subway. Or splurge on car service — you’ll still save more in rent. Better yet, use some of that cash nest egg to buy a place in Long Island City, Astoria, Jackson Heights or another relatively close in gentrifying neighborhood. You’ll reduce your out of pocket costs and those neighborhoods will continue to appreciate. You will make money if you buy a good piece of property in an up and coming neighborhood, and Queens is the next Brooklyn.

    3) Another example of #1: If his goal is to be a nature photographer, why does that necessitate making trips to remote and exotic places? He could perfect his nature photography by taking a trip on the subway to Central Park, Fort Tryon park, or the Bronx Zoo. Nature is everywhere. He needs to develop his technique first anyway, and that can be done just as easily in his backyard as halfway around the world.

    4) Given the amount of travelling he likely does for McKinsey, if he does still want to make a trip or two a year to a more exotic place he could totally be doing in on earned miles. He needs to run, not walk, to the Art of Nonconformity blog and get a primer on how to max frequent flyer opportunities.

    5) He needs to find different friends. Hang out with/learn from people who have similar interests and manage to have fun and rich lives without spending lots of money. He should look for hiking clubs, etc. where the focus is on nature (something he loves) but not necessarily with a lot of gadgetry (photography clubs are dangerous that way). Then again, if he starts hanging out with a bunch of rich photography buffs and control his impulses to be an early adopter, he could score a lot of lightly used, high end equipment as they trade up to the latest model and he picks up their second-hand stuff.

    6) He should start now practicing not just how to ply his craft, but how to teach it. That will be a second income stream he can rely on in addition to selling his photos. And he can explore other things around the margins — printmaking, graphic design, writing stories to go with his photos.

    7) Start developing networks that will help him in his new career. Get to know food/travel writers who work in the exotic places he wants to go — they could be possible collaborators on future stories. Get to know some travel outfits that plan tours to those same places who might be interested in offering a photography-focused tour (see, here’s a place where those teaching skills come in handy).

    Heck, I don’t make $300k a year and now I’m thinking I could have a nice second career at this! he can totally do this, but he needs to be realistic, cut way back on his spending, and have more of a nest egg before he tries it. Not that hard on his income, assuming he’s single. If he isn’t it is a whole different ball game — hard to have stable relationships/family situation if half the couple is gallavanting all over the world all the time. There are other ways to work it, though, like setting up a base overseas in an area he wants to work and branching out from there. Anything can work if you plan it right. But he should do a much better job of exploiting his current gig and saving all he can. That two year timeframe might not be a bad short-term goal. If he’s focused and makes a point of cutting his expenses to the bare bones he should be able to grow his current nest egg to at least $500k through savings and investment. That isn’t enough to be FI, but it is a good safety net while he explores the new career option. But he shouldn’t be starting from dream vapor there, either.

    Lots of work to do in two years, but better to take positive steps than to continue to ride on the “whaaaa”-mbulance, no?

    2)

  33. Mia says

    Wow. Some of the stories here are really moving especially the one by Tim, I do find it heart-wretching and respect that you bear so many responsibilities and sacrifice your choice for them.

    I am turning 29 in a few days and just got a job paying a six figure base salary. I am an Asian immigrant in Australia and doubled my income since landed on a sales job 2 years ago, and my plan is to double my income again in another 2 years by entering this tier 1 mining consulting firm on a business development role. Haven’t thought too much about my savings plan but I do realise my spending has increased as my income grows. Looking at stories here is great as it reminds me to remain humbled and plan for the long term. It also reminds me that there are so many things in life that are way more important than the earning-spending consumerism circle which will end up in vain.

    I used to save rigorously and largely compromised my lifestyle and social life. As income grew I found myself letting it go for a few reasons: 1, to compensate what I haven’t been able to do. I like being generous with people and not having to worry about money at all. 2, optimism that future income will grow further. 3, bad investment environment (high property price, slumping commodity prices, unstable stock market, doomed world economy) makes saving a bit aimless, and inflation will make my previous savings effort look like a joke. 4, hidden hope that finding a husband will reduce or remove the need for me to save. Shame on me I know, but which girl doesn’t?

    I realised when reading above posts though, that an overly extravegant lifestyle, unlike how we were made to believe by movies and ordinary people around us, is nothing to be proud of. It is short-sighted, unthoughtful, and sometimes desperate. It marks either an inherited or suspicious source of income (neither to be proud of, again), or a lack of ‘future intelligence’ which if hasn’t then will result in failure.

  34. Martavia says

    No, I don’t have sympathy for Lyndon. I’m sorry. There are millions of people working jobs that are not their passion. People don’t grow up wanting to work at McDonald’s. People don’t want to be janitors, garbage men, maids, etc… And they don’t make $300,000 a year, but they do what they have to do. This guy pays $5,000 a month for rent. Most Americans don’t make $5,000 a month. It sucks that he isn’t working his dream job, but he’s not broke, homeless, in debt, or starving. So I think that he’s truly blessed to have all the things that he has.

  35. Steffen says

    Funny, it is almost as if you wrote that article about me. I work in a job I hate and have saved pretty much exactly the mentioned amount, 250.000 (CHF). The only serious goal I have is getting out! I have already taken a sabbatical (8-9 months) to recharge. Amazing how guilty I felt the first 2 months or so for not being productive. Productive in a sense that I have spent enough time in an office to bill it to an employer. Not productive like producing something of value, because my IT jobs seem to consist of 80-90% sitting and waiting and maybe 10% producing. I have great sympathy for Lyndon, I hope for him he can make the transition to a meaningful life soon.

    Btw, how much savings is enough to live off passive income? By my calculation 250.000 will not be sufficient.

  36. BDog46 says

    Some of the posters here are fools. There is no way Lydon would fit in with McK&Co culture by “renting a studio in Queens’, and many have obviously never had high pressure jobs. I get why a guy in his shoes would be digging a change. Retire forever at 40 or lose your 30s? Hmm, I guess it depends. I’d like to cross-reference the posts that recommend he gut it out and stay miserable against poster age and true net worth. I bet there are many here who aren’t as far along as they’d like to be and feel that “retirement at 40″ and “making a lot of money when you are young” are indeed the most important things in life. I personally make a buck and a half running a software application, work 40-50 hours per week and don’t feel the need to strive to make $200-$250K like my MBA classmate, who is now burned out after 2 years at EY and trying, but so far failing, to conceive a child (due largely to stress). I’ll bet most of those who “have no sympathy” have never earned CLOSE to what Lydon makes nor had that opportunity. With that kind of income comes a stress and need to kiss so much ass that not many can take. I for one understand Lydon, and while I wish I wish that I wanted that kind of job, I would rather work/save and enjoy my life. You know, a little thing called BALANCE. Sounds like Lydon’s out of balance and needs to find his center. Good luck to him. And to the rest of the jackrabbits who “hate”, worry about yourself first, not some hypothetical strawman that FS set up for you to tear down, knowing in advance what your responses were likely to be so as to validate this blog.

    /Out.

  37. The Phroogal Jason says

    I worked as VP of marketing at a financial institution in Silicon Valley. Had great salary and benefits and stayed there for 3.5 years (10 years in banking). In fact, my relationship was great with the CEO and the Board but I realized it was time for me to pursue another chapter in my life. I finally took the leap and left. It took me 7 months to actually leave after my resignation. I gave my noticed and my last day kept getting extended. They were doing anything they can to keep me. Anyhow, I left and backpacked the world in 2012. Saw 20 countries in 12 months in 2012. Yes, not many people have the luxury to even think of making six-figure salary let alone debate leaving it for something else. But, you do get to a point where you ask yourself how much money is your time worth.

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