One of the funniest things I’ve come across are people who want to gain experience, but aren’t willing to sacrifice. Changing jobs or industries means you’ll likely need to take a pay cut and put in a lot of time.
Several years ago, there was a lot of debate regarding employers taking advantage of their free interns. So, like any good Big Government would do, the US Department of Labor stepped in. They established the Internship Programs Under The Fair Labor Standards Act to protect these poor interns.
The “unintended consequence” of course is that there may be fewer opportunities for eager beavers to gain experience. Why? Employers might as well hire qualified, full-time employees if they have to pay!
Take A Pay Cut And Like It
The $4.25 an hour job at McDonald’s was the worst job I ever had. The manager was abusive. He yelled at us when we spoke Spanish and never told us we did a good job. You try making six Egg McMuffins in a row under pressure. I guarantee you’ll mess up once in a while!
But getting to work at 6am to open up the store made me think about changing jobs a lot. In addition, never feeling the love of a superior also helped prepare me for a much more lucrative job in finance.
5:30am start times weren’t a big deal once I graduated from college. Getting yelled at for making a mistake on a presentation slide was just par for the course. McDonald’s toughened me up and eradicated any feelings of entitlement I would otherwise have!
Trying Things Out Again
I could have found another job in traditional finance the first two years after I left in 2012. But I didn’t want to go back. Instead, I applied to probably a hundred tech/internet jobs.
I hardly got a response from anybody until I took a part-time consulting job at Personal Capital in 2013. The pay was not bad, but it was a 60%+ pay cut, even on an annualized income if I were to work there full-time.
Personal Capital was seeded with $2 million in 2009 by CEO, Bill Harris. It grew into one of the leaders in the financial technology space. They have over $120 million in funding and $1.3 billion+ in managed assets and growing.
Clearly, I was fortunate enough to pick a winner to grow with. Now, every time I reach out to a company in the fintech space I always at least get a courtesy response, instead of a classic ignore.
Changing Jobs Is Exciting
But after 16 years in some finance related occupation, I thought it might be interesting to explore a new industry. My interests in changing jobs went to startup land since content marketing is scaleable across multiple industries.
One of my blogging buddies at WSPB commented in my post on “How To Get Hired If You Are Overqualified,”
Some of your posts are downright hilarious. You’re successful enough that working for $135K or even considering it, is lunacy.
Again going to stick with my guns, you don’t want a new career/job… You are simply bored. This is why we chose the “start a product company” option from one of your posts 1-2 weeks back.
It makes more sense.
More Pay Cuts When Changing Jobs
He’s right. I wanted to try something new, and to do so, would require another massive pay cut. But that’s what having financial freedom allows.
You get to explore different things that may excite you with much less regard for what you’re getting paid. It’s kind of like an ex-NBA basketball player sportscasting for a major media network. They’re in the mix and have respect. And probably tell themselves all the time, “I can’t get believe I’m getting paid to do this job.”
$135,000 is not chump change, but everything is relative in finance. Accepting the job would mean cutting out consulting activity and taking another large pay cut.
Logically, taking a 50%+ pay cut is probably not a financially wise decision in the near term. But in the long-term, who knows? I was more curious to get to know the CEO. I wanted to understand his business model, and see if we could build a business relationship. Besides, I love to negotiate and share all these interesting stories with all of you!
Pivot To A New Industry
If I really want to pivot into a different industry, I need to take a cut. The same goes for most people. Nobody is going to hire someone with no experience, who they don’t know, for the same bucks, no matter how well you’ve performed elsewhere.
Through this particular job hunt process, I was able to write a post that might help overqualified people win a job they desire. In addition, I figured out where my own pay cut limitations lie. The idea of joining an exciting new company is interesting, but the economics have to be reasonable.
Main point: You don’t know your true risk tolerance until you start losing money in a bear market. In addition, you don’t really know how much less you are willing to “work for your passion” until you’re faced with making a very real decision.
I decided that taking a full-time job for less than $200,000 a year without good responsibility and great equity upside is not in my cards at the moment. I’d rather be completely free to work on my own online business and consult part-time.
Change Your Money-Making Time Horizon
Actor Jared Leto disappeared from the movie scene for years. Then he resurfaced as a sickly transgender character named Rayon in Dallas Buyers Club.
The film paid little, but he went on to win an Oscar for his incredible role in 2014. Then, he made around $7 million as The Joker in the new Batman movie!
Short-term thinking is limiting
Short-term thinking can really limit financial gain. If I didn’t keep Financial Samurai going for the first three years, I wouldn’t have been able to escape Corporate America.
By doing 25 hours of consulting work on the side for a year and a half, a huge opportunity to consult with dozens of startups has emerged. And by spending time learning about how startups from various funding stages operate, I might just try and do something bigger on my own.
It would be nice to go straight to the corner office in everything we want to do. Unfortunately, we’ve got to pay our dues. But once you’ve made some sacrifices, you’ll appreciate it so much more when you finally reach the top. Be willing to put in the effort and get excited about changing jobs!
Recommendation For Leaving A Job
If you want to leave a job you no longer enjoy, I recommend negotiating a severance instead of quitting. If you negotiate a severance like I did back in 2012, you not only get a severance check, but potentially subsidized healthcare, deferred compensation, and worker training.
When you get laid off, you’re also eligible for up to roughly 27 weeks of unemployment benefits. Having a financial runway is huge during your transition period.
Conversely, if you quit your job you get nothing. Check out, How To Engineer Your Layoff: Make A Small Fortune By Saying Goodbye.
It’s the only book that teaches you how to negotiate a severance. In addition, it was recently updated and expanded thanks to tremendous reader feedback and successful case studies.
Start Your Own Business And Make Money
The final way to build a fortune is to take matters into your own hand and start your own business online! It used to cost a fortune and a lot of employees to start your business. Now you can start it for next to nothing with Bluehost.
Brand yourself online, connect with like-minded people, find new consulting gigs, and potentially make a good amount of income online one day by selling your product or recommending other great products.
Not a day goes by where I’m not thankful for starting Financial Samurai in 2009. I have maximum freedom now thanks to working on my side-hustle while working for 2.5 years. You never know where your journey will take you!
Updated for 2020 and beyond.