How Much Are You Willing To Sacrifice To Change Your Career?

How to change careers more effectively

How many times have you or someone you know said, “I hate my job. I wish I was doing something else instead,“? Probably a lot. But change is hard. Taking the first step towards change can be the hardest and a lot of people just don't know where to begin even if they're miserable. If you find yourself in this boat, what's nice is there are a lot of free resources out there that can help if you simply start looking.

My site is one example. Capital One is another example. They sponsored me to attend one of their free career workshops in San Francisco the other day. Before diving into the key points of the workshop below, I wanted to share a story of a friend who took a risk everybody thought was absurd at the time.

Andrea had been in institutional equity sales for 10 years and grew tired of it. She was a Vice President who made a healthy $200,000 a year salary and a bonus that ranged from $0 – $200,000. She lived in a modest one bedroom apartment in a nice part of town and took the bus to work. Most people in their early 30s would never risk leaving so much money on the table. But Andrea did.

Andrea came into the office one day and told her manager that she was leaving. Everybody was shocked since she was a lovely person who was well-liked by her clients and by her colleagues. When asked whether she planned to go to a competitor, like so many have before her, she said, “Nope! I plan to go to baking school!”

Everybody was shocked! Baking school? What the heck? Even I was thinking what a curiously strange move to make when she could just practice at home after work and on the weekends.

Andrea was determined. For years, she had been dreaming of digging her hands into bowls of dough and watching her own scrumptious delights turn golden brown. If she was going to be a baker, she wanted to be the best baker possible by learning all the culinary secrets at a top school.

Surely a career doing what she loved would be less stressful and provide much more meaning to her day-to-day life. Even with the $8,000 cost to attend baking school, and the subsequent much lower salary, she believed this dramatic change would be worth it.

But once she finished school and got her first real baking job, reality hit hard. Being a baker wasn't anywhere near as stress free as she imagined. She regularly had to work the graveyard shift in order for all her baked goods to be fresh the same day. When she worked dinner hours, she was constantly berated by the head chef, just like how Gordon Ramsey would yell at all the contestants on Hell's Kitchen. “Hurry up you slackers!”, “Do you want me to fire you? Or are you going to fire the créme brulée because it surely isn't going to fire itself!” It was non stop pressure in the kitchen.

After several months of work, Andrea said something I'll never forget, “Sam I can't take it anymore. If I'm going to get yelled at every day at work I might as well make six-figures getting yelled at every day instead of a lousy $15/hour!”

Andrea ended up giving up her dream as a master baker and going back into banking the following year. Years later she told me, “I have no regrets because I went after what I thought I wanted. I'm a much better baker now than before. And although I still don't love my job, I have a much greater appreciation. The greatest regret would have been to never try.”

Related: Do You Want To Be Rich Or Do You Want To Be Free?

Career Change Workshop Recap

If you're thinking about changing your career, make sure you really think through all of the risks before taking a leap. A lot of time and money is at stake! Here's a summary of some helpful tips that were covered in the career change workshop I attended that you may find helpful.

The career workshop was hosted by Gwen Lane, an ex-marketer who decided to focus on building her own website and earn money as a product ambassador and Megan Lathrop, a money coach who used to work in investment management.

The most salient notes from the workshop:

  • 77% of us take jobs not aligned with our values. Sound familiar?
  • Personal branding is key – who you are, what are your values, what are your interests.
  • Identify people you respect and look to emulate their brand, but also create your own.
  • Ask yourself what you want others to think when they speak your name.
  • Create your mission statement.
  • Identify your values and find a career that's in alignment once you've developed a financial base.

The 1.5 hour session was one part coaching one part therapy. We broke into groups to give and get feedback about our personal branding and values. I met one woman looking to get into social media marketing, but felt stuck because she didn't have the three year common prerequisite. Another woman was looking to become a COO for a startup after 20 years of running a 100 person office. It was time for her to finally take some risks, she told me.

It's really good to meet working folks or folks looking to do something new because I've been living in my solopreneur bubble for five years now. Despite a booming Bay Area economy, competition is still stiff to land a coveted job.

Your Brand Is Your Secret Weapon

Branding is vital to everyone's career and business success. In a sea of homogeneity, you must develop some type of personal trademark that makes you stand out from the crowd. Be known for something.

With Financial Samurai, I've purposefully chosen a red, black, and silver color scheme. The colors are meant to convey a level of ferocity when it comes to tackling all of money's mysteries. The mask is a universal mask that represents all of us, not just me, in our quest for achieving financial independence sooner, rather than later. My objective is for people to come away from my site feeling smarter and with more perspective than before they came.

Really take some time to think about what your personal brand says about you today and what you'd like for it to say about you in the future. The career workshop was a good reminder for participants to stay on brand. I often go off the rails with my posts because I'm bored or feel a little spicy. This workshop helped me focus on my site's core values.

Related: How To Build A Stronger Brand For Your Career, Website, Or Business

Other Career Change Tips

From a financial perspective, map out all the costs associated with doing a career change. For example, one common path many young folks take is to go back to business school full-time for two years. But I'm not exactly sure how many attendees actually add up the total cost of business school + the forgone salary + lost time and compare the total cost to the potential income + happiness increase.

The worst financial decision is when someone goes to graduate school and then ends up not working shortly after graduation. The cost is guaranteed. The income and happiness are not.

More often than not, you'll have to take a step down in pay if you transition to a new career. Therefore, it's best to thoroughly sit down with a veteran in the space you want to join first and talk about all the pros and cons. If Andrea got to know more restaurant bakers, she might not have been so shocked by her treatment.

I knew about the pitfalls of the online media world before I left my full-time job because I had been moonlighting for a couple years already. Try as much as possible before you buy.

It is very common to be disappointed after a career change if you don't have proper expectations. The more you can align your values with your work, the happier you will be.

My New Co-Working Space!

What I realized from my latest visit is that a Capital One Café is a great free co-working space whenever I start getting cabin fever. Downtown SF is a mad house nowadays, so being able to have a place to host business development meetings, go to the restroom, charge my devices, relax, stuff my face with pastries, do some banking or just chat up with random hustlers is great.

A different type of banking branch

Further, all the workshops have catered food and drinks as well, which is great for all those frugal folks out there! When our workshop ended, the caterers started setting up dinner food and beverages for the 5pm – 6:30pm entrepreneurship workshop.

For more expert insight on Mapping Your Own Career Path, you can also check out Capital One’s recent #CapXTalk panel discussion to hear how executives from companies like LinkedIn, Zappos Insights, The LA Girl, and Times 10 tapped into their personal values to achieve their career goals, and what advice they have for others who are looking to make a change.

Here's a snapshot example of some free upcoming events in SF.

Thanks again Capital One 360 for helping keep the lights on here at Financial Samurai. It's always fun to get out of the house once in a while and meet new folks and learn new things.

Recommendation If You Want To Move On

If you want to leave a job you no longer enjoy, I recommend you negotiate a severance instead of quit. 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.

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Updated for 2020 and beyond.

69 thoughts on “How Much Are You Willing To Sacrifice To Change Your Career?”

  1. I’m in the same position and if you asked me a year ago, I would’ve said keep at it, make yourself coping mechanisms; I’ve got a subtle countdown timer on my desktop and whenever things get too much at work, I look at it or get the work done with tears of frustration.

    But now I’ve been diagnosed with an adenoma and I don’t know. I’m dependent on my job for my healthcare. I wonder if my stubbornness to keep going at work for FI cause my adenoma which has now made me dependent on the healthcare provided by my employer? Was it worth it?

  2. My husband is in a high stress job that leaves him little to no time to explore other jobs or career options. He still has student loans for law school and his current job is helping us pay these down, but it’s become an endless spiral of stress and no sleep in addition to his values not aligning with the company he works for.

    Would you recommend keeping this job for a few more years to pay down debt or attempt to explore other jobs while working or quit and dedicate his full attention to a job search. We realize that a new job might mean a lower salary for him, but at what point is the stress not worth it?

  3. Now this article hit home, but not in the way you may think. I was never able to pursue what I wentto college for because the Recession was in full swing when I graduated. At the time I was desperate to get a job – any job- that would help me repay my student loan debt. I was homeless in college and due to my skin color received a crappy Pell grant ONLY when I was sleeping in my car. College is worthless to most people now because the ROI isn’t there.

    Living in poverty after working so hard to fulfill something you’re passionate about and good at can crush you. I saw the entire industry change that I worked so hard to be a part of and found out that STEM jobs aren’t anywhere near as ‘safe’ as people assume they are. Other classmates who made it were replaced by foreign workers (immigrants) and wages were slashed. This was ssuming that the jobs weren’t just moved overseas for cheaper labor since Americans overpay for an education that just isn’t worth it.

    I was forced to start over four times. With each job I thought I’d be able to build a career around it but that’s a all out lie when you have to rely on an incompetent business owner for a paycheck. After taking intiative and learning key fundamental skills on my own to prove my worth (women are generally hated in male dominated industries) I was still told that they just don’t hire women because it’s “men’s work”. I was refused work in machine shops even when I could demonstrate G-code and understood the processes. Automotive companies laughed at me, welding specialists were pissed I could even MIG and arc weld. Factories refused to offer more than $8/hr for foundry work that I learned and even showed the shift supervisor my sprue networks on my own projects. I know rejection in the most intimate way and how constant rejection can make you doubt your self worth as a person.

    Imagine how horrible it is to live in a country where immigrants rip your work from you, where you can be legally discriminated against, you’re paid less as a woman (I’m underpaid now at – $1.06/hr compared to men at my job with no experience or certifications), have been denied training and opportunities, and am considered a freak as I don’t conform to the typical woman in the town. The area I live in (and will be leaving next year) is a dump where 67 – 69% of the residents are on some kind of welfare. I have a degree. I don’t have kids with different fathers, I work harder than everyone at my job, I’m not married, and I try to leave every place I’ve worked at in a better way/condition than when I got there. I also don’t take shit from anyone. Talk down to me and I return the favor.

    Yet when I stand up for myself I’M PUNISHED. I stood up to a coworker creating a hostile work envrionment and wouldn’t you know it that men in their 20’s and 30’s can’t stand it when a woman is right. Threatening to beat a coworker is wrong but my manager didn’t care. The guy is incompetent, never on time, loud, sexist, curses all the time and more. He can steal MY food but when something of his goes missing then everyone gets interrogated. It’s insane and why I’m leaving that pew jumper’s paradise for a larger city with actual opportunities. After literally exhuasting all of the options where I’m scraping by, that eureka moment finally hit me. I have exhausted every possibility and dealt with death threats from members of the local Chamber of Commerce when trying to create a competitive company.

    It hit me hard. Why throw away my skillset on morons who will never pay me what I’m worth? Why not pivot those skills into my own brand, build a business aroud it, and pursue my obsession where I can actually live and be treated like the human being I am? If horrible crazy people who openly discriminate against women can make it I know I can definitely run a business. After taking a class in a larger city hours away, I’ve been working on my business plan, have created the sitemap for my website, the color schemes, and have my own logo finished. While many people may give up entirely take the time to learn a skill, no matter what you are doing, and improve on it. If that skill translates into something else that will help you pursue your main goal then you’ve just made yourself more valuable and brought yourself one step closer to acheiving that long term goal.

    As a result I’m at the point where I found the best place to move to, but need a bit more experience and certifications in order to ensure my move is successful. There’s no point in moving to a city if you can’t afford the rent.

    During my class I met people that I was at ease talking to and actually had SEVERAL things in common! I felt at home with them and realized it was where I belonged. There wasn’t a nasty snide remark those two entire days, no threats, no yelling, no hostile behavior. We can either be dissapointed when we learn how those careers we fantasized about as kids really work or you can pivot and exploit what you see. Either way I’d rather be doing what I actually enjoy and do the work I currently do as a backup of sorts as it compliments my true end goal to be financially independent. During that time I took off work I realized it was also the first vacation in my life. The area I travelled to has amazing work spaces, tool libraries, and communities (plural) where people actually want you to excel!

    No matter how bad it is focus on what you can do, what you can actually change (even if it’s just you), and give yourself realistic goals with acheivable deadlines. Don’t overload yourself with so much work that you can’t finish anything (personal experience). This has helped me tremendously and I wrote it not to be just another online rant, but to let people know that if you walk away from bad experiences make sure you take away something useful from each of those experiences. Don’t walk away from anything empty-handed if you can help it.

    No matter how hard life gets you can train yourself to see a realistic opportunity in what you are dealt. I refuse to give up and really enjoyed this article. Don’t let other people define who you are and make sure you take time to invest in yourself.

  4. I had a career transition that required grad school. Even with the significant debt I took on, it was absolute worth it. My earning potential is much higher and I am more satisfied in my field. I also was able to start my own business within a niche in it. My branding narrowly targets a subset within a subset and I am starting to become nationally known as an expert.

  5. I studied computer engineering all through high school and then college, but didn’t feel like a career in Informatics would suit me. So I ended up majoring in Social Work.

    Total career makeover!

    However, after graduation.. I went back to working in front of a computer. (Just like Andrea)

    I’m not sorry though, I’m really glad I took a chance on studying something I actually enjoyed.

  6. Yea, it’s time to make a change. What’s the point of making money without happiness or drive? Risks need to be taken in life if you want to get anywhere! Also, long time reader and love your work, but please do me a favor, get an SSL cert! That’s why I don’t comment on more things!

  7. No career change for me as I am one of the lucky ones to be in a job that I love, that pays adequately for me to live a simple life. It is not without its pitfalls and the salary I get paid is nowhere in proportion to what I put in, but the love and the mental rewards I gain from my job greatly plays a role.

    I’m with Andrea. At least she gave it a go, rather than forever wondering “what if?” Of course, more research and asking within the industry would have brought to light the reality of graveyard shifts and low salaries, but until you are in that position would you truly know if you can or cannot handle something?

  8. If Happiness = Expectations – Reality , then that would explain why Andrea was not happy as a baker. If she knew about the yelling and the hours going in, but she accepted that as temporary and that it would get better once she has her own business, then she might’ve stuck with it.

    It seems like a lot times people follow their dreams, not knowing about all the pitfalls that come with it, and get blind-sighted. It always makes me wonder, if they knew what they were getting into, had a strategic plan for the end goal, and accepted the fact that they’d have to go through this pitfalls to get to the end goal, would they have stuck to it. Or maybe they could’ve diversified like you did, by working at a career that pays well, and working on their passion on the side.

    When I read this quote from Andrea “although I still don’t love my job, I have a much greater appreciation. The greatest regret would have been to never try”, I’m happy that she’s no longer thinking “what if”, but I’m wondering if the fact that she still doesn’t love her job will continue to haunt her. You can’t run away from something, you can only run towards something better. Sooner or later, she may try to run again, but hopefully expectations will meet reality next time and it will be towards something better.

  9. Just a quick comment and question for those on the board since it seems relevant to the subject (remotely)…
    I’ve led a pretty successful life. I have enough that I could probably quit now and be fine. I have a job that puts me in the top 2% in terms of income. Good wife that I love, great kids.
    I don’t feel grateful all the time. I’ve always been a risk taker and pushed myself. I don’t find that I can do that every day anymore…I think about my kids and what I need to do for them and now bite my tongue or go with the flow all the time. But sometimes, usually once a year I take insane risk. Like life ending risk, or marriage ending risk, or sitting in my house waiting for the cops to show up risk. I don’t enjoy the things I do to get in these situations but I do enjoy the feeling of gratitude after, the realization that I have great fortune and could have lost it all. It floods me and I can keep it together for a long time after that, then I start to slide back and pretty soon I’m doing something really stupid and with the intent of facing what is almost complete loss.
    I’ve looked for this on the internet and can’t find anything, I can’t discuss what I’ve done with friends and feel no desire to boast or brag about it (probably why I’ve slipped by so far) so I don’t know if they have the same thing going on. But I know the numbers will catch up with me one day.
    Is anybody else familiar with this or feel a bit the same? I’m not cutting my wrists or literally playing Russian roulette and I have no desire to actually pay the consequences of my action but just to feel the sense of being on the edge of disaster to really feel what I have.
    Anyway, that’s it.
    Sam the email etc is fake but didn’t want to put the real one on there so you can leave this out if you want but I’d really like to know if I’m the only one that does this.

    1. What the heck, when you say life ending risk do you mean doing drugs or going on binges? Doesn’t sound normal dude. get some help. I mean you’re willing to throw it all away for a cheap high. Either that or this is a troll.

  10. This article resonated with me because I’ve done several complete career switches, from: law –> management consulting –> private equity investing –> startup founder –> product management in the tech industry.

    I would say these transitions have generally “worked out” (eventually) but they have definitely been very challenging to pull off, I’ve encountered plenty of bumps along the way, which has made me self-reflect intensely about career change strategies and how to systematically increase one’s probability of being successful at doing them.

    I’ve also seen this from many others’ perspectives, too, because I have coached many peers and friends on how to do the same. (If you’re interested, I profiled some pretty amazing career switchers on my website before, including people who now work in entertainment, business, politics, tech startups, finance, and more…who transitioned from just about every walk of life; I don’t create these interview profiles anymore, but many readers still find value in them so I’ve left those posts up on my site.)

    As for how I pulled off my own transitions, I did not attend any workshops or go back to school: instead, I sacrificed nights and weekends pretty continuously for 10 years (at this point) to learn new skills that I would need and to build connections to help make my transitions successful. Sometimes I have wondered if that much pain and sacrifice was worth it. And while it’s not possible to know what my alternative universe would have been like had I not sacrificed so much of my 20s and 30s doing this (e.g., would I have been happier by this point), the biggest psychological benefit I gained is being pretty darn recession-resistant, geography-unconstrained, and industry-unconstrained. In other words: peace of mind. That’s been huge: now, I feel truly confident that, if I want/need to, I can find meaningful, reasonably interesting work in nearly any industry, geographic location, up-or-down economy…and thrive economically (e.g., at least six-figure income). That is because, through hard work and self-sacrifice preparation, I have developed strong writing and communication skills, strategic / financial analysis skills (across multiple industries), strong technical chops related to software and tech, and team leadership / direct people management skills.

    That means I’m not beholden to any job, company, location…and, most importantly, whims of any boss. I never feel stuck or forced to work for someone I can’t stand, or for a company I despise because, frankly, at this point I don’t have to.

  11. Charles Sarahan II

    My wife and I both work for Uncle Sam. In 2011, she changed careers leaving one federal agency to work at another. She was very unhappy in her job and was being prevented from leaving or getting details by her boss. Before she did, I mapped out the cost due to the salary decrease and where we should cut spending to limit the financial bleeding. It hurt and it took us six years but we have finally made up for the monetary loss and then some. The biggest gain however is that she likes her job and that is priceless. The key point I think is to map all the costs and potential benefits (financial and otherwise). Make sure you have enough information to make an informed choice.

  12. I don’t know if I’d say I did a TOTAL career change because it’s still relevant to my major. I started my career working as an auditor with one of the big four accounting firms. When in undergrad I never wanted to do it because of the horror stories, but I applied anyway and low and behold, I was offered a position and took it.

    Burnout hit me hard. I last a little over a year before I began looking for another job. I decided to take a position as a financial analyst with a Fortune 100 company that was a 10 minute commute (my prior was over an hour combined with grueling hours), but due to a horrible boss I was even more miserable there.

    This is when I decided I wanted to work in non-profit. The opposite stress level and hours of my previous two jobs. I’ve now been at my job for about 2 years and I’m really happy. Plenty of vacation time, school holidays, Fridays off in the summer, much shorter hours. Only caveat- I took a pay cut. After a year and a half of working there, I started making what I was making when I started at the Fortune 100 company.

    My husband, on the other hand, is still at the big four firm we both started at together. Sometimes I get disappointed in myself/jealous that he’s making so much more because I know if I stayed I’d be making the same. But in the end, I think I made the right choice for myself. I was constantly sick (I have Ulcerative Colitis so you can imagine how stress affects my body). I know money isn’t worth the happiness or illness.

  13. I attended social media week in Los Angeles and they said the exact same thing about brand. Even if you don’t have a tangible business or product, having a person brand is equally as important, and that can be a simple as just knowing what things you value most in life. As soon as you start trying to be someone you’re not, it leads to unhappiness, or in the case of a product or business, less success.

  14. Funny I used to work with someone who wanted to be a baker as well. She was always bringing in cookies and cupcakes for us. She decided not to pursue it as a career though and just found a new office job that had more seniority and better pay when she left our company.

  15. Duncan's Dividends

    I’ve definitely thought of career changes as well. I’m not really enjoying my current role/political games of my current employer. It’s amazing sometimes how we get anything done when people are not will to work on problems that are barriers to the customer experience because we’re worried how it will break our reporting. Pretty sure reporting should follow what’s best for the customer and someone can change their excel document to figure out what the slight system tweak was that can shave a day off of an insurance claim, saving us on rental costs and improving the customer experience, but apparently that’s asking too much.

    I think I have to wait a few more year s for the change though, it’s tough when you haven’t hit the financial freedom moment and have enough in your F-it fund to jump from a six figure income for some of us. I wouldn’t mind it if I was in your position, but I only started in the six figure income in the last few years so I’m playing catch up a bit in my mid 30s. Not that I’m struggling with a net worth over $500,000, but most of my investments are in retirement accounts and not accessible at this point in my life.

    1. Perhaps set a target: $1,000,000 net worth, before making the leap. It’ll make you more motivated and focused. If you just started making six figures, definitely try to take advantage as long as possible. Starting in a new career earning six figures may be difficult.

  16. Wow, that’s a great co-working space. Free? That’s even better. I don’t think we have anything like that here in Portland. Really neat.
    I think Andrea did the right thing. You never know unless you try. It’s been 5 years since I quit engineering and became a SAHD/blogger. If it didn’t work out, I would have gone back in the first year or two. Fortunately, I love this lifestyle and we are doing well financially so it’s all good.

  17. I am going through this now. 3 decades in mostly Chip HW Engineering/Program Management. Left my employer (single employer all this time) last year. I have not retired nor do I consider myself FIRE yet nor mentally ready to abandon my geek-brain productivity.

    I am in the job market but my level of positions are more scarce. I am considering doing something for a living I always had a curiosity for; Software. I’d have to go back to school for an accelerated second BS. I have some limited knowledge of SW because Hi Tech requires Engineers to at least do some basic programming at some point in their life.

    I’d have to fund this on my own, while not having a W2 income. At the other end of the rainbow, I could see myself either working as an entry level SW coder or as an SW Project Manager. Later on, when I am ready to cut wy back on work, I could do occasional contracting. I believe SW is so hot nowadays that it also gives you choices about where you really want to live.

    1. What about going to a technical bootcamp school. There are a lot in SF, like where you got for 3 months and they guarantee you a job in your area of study or your money back.

      I’m not feeling too hot about you going back to get a second BS.

      1. The thing about Coding Bootcamps is there seems to be a concern about the hire-ability. Good Coding Camps cost $10K or more. The BS I’m looking at ~$30k. I’d rather not move away from AZ to go to a Camp. I have read these schools are not strong on algorithms and data structures, which a BS in Computer Science will cover.

        This Computer Science BS can be accomplished in either 1 yr, 2 yr, 3 yr, or 4 yr tracks depending on whether one is working and what the workload is. It is also Online. I could start it, then if in the meantime I get re-hired as a Program Manager or Eng Manager (previous line of work) I could slow it down and even check if the employer will pay for the rest of it. So I could go for the BS and still be looking for jobs. As far as work, for that, I will consider moving to California, and I am interviewing with California companies.

        1. If you can do it online in 1-2 years, I guess that’s not bad, especially if you don’t have to miss work. When there is a guarantee or your money back, I’m not as concerned if I attend one of the coding bootcamps, but I never have.

          It’s worth being flexible at a younger age for career opportunities. But it’s up to you at the end of the day.

          I wish I moved one more time from SF to Asia for several years of work. That would be a great adventure that I can no longer experience now that I have a little one.

          1. Just to be clear, I’m unemployed at the moment, first time ever.

            That word age…. I’m a young 57. :)

  18. Terrific article! For career changes, it seems wise to test out the waters by working nights and/or weekends shadowing or part-time work doing what you would actually be doing (like how Sam started Financial Samurai). If you are truly a good match for the change, it won’t feel too burdensome or tiring to take on the extra effort. This can be much lower risk than going all in with a switch — though, admittedly, at some point you have to take the leap of faith.

    In my experience, colleagues with the most successful careers have tended to lock into a direction early on and pursue that track aggressively. While broad experiences are helpful, the earlier that you can decide on a track that is fulfilling enough, pays enough, and is interesting enough, the further you get sooner. Then just save and save to get your freedom back after 10-15 years! At that point, you can redirect in any direction you want.

  19. Ten Bucks a Week

    Currently I am in the middle of an MBA in Europe because I decided it was time to try something new and foreign. It is a sacrifice to forego the income, but not often do you get to do something life-changing while you are young.

    The brand I am trying to put out there is a data-centered businessman. Fortunately I love data and that seems to be a hot area in the economy these days.

      1. Ten Bucks a Week

        Yes, only one year and less than half the price. I figure all said and done I’ll come out $170,000 better than if I had gone to a US program.

  20. Grant @ Life Prep Couple

    I have had three jobs but all in the engineering field. As far as jobs go I find it to be quite rewarding to create new things that help people. Sometimes my work involves putting people out of work (automation usually) but I have come to respect that as an overall good for society.

    I have considered pursuing something that I’m more passionate about like opening a gym but I am always quick to talk myself out of it for all the common reasons/excuses. I plan to keep my head down and keep working my current job until I get some FU money then pursue some passionate work.

    Big respect to anyone who is willing to go for it.

  21. I went through this process about 3.5 years ago, although it was something that was on my mind many years prior.

    I was 29 years old, working in commercial banking, living in Oklahoma and was earning $150k-$200k per year with extremely strong outlook to maintain and grow that income over time. Given my age and location, I “had it made”.

    However, I had always desired to own and run my own business. So in late 2013 when my smaller bank was acquired by a much larger bank with out of state leadership, I decided it was time to get serious about jumping out and doing my own thing.

    Ultimately, my analytical banker mind led me to do the following (one of which was fairly lucky):

    1. Rather than going 100% out on my own, I sought advice from a mentor who so happened to be a successful business owner client. In seeking this advice, he shared an immediate opportunity he was looking at to purchase another business. I was given the opportunity to run this business (a turnaround situation) and become partners with a very experienced, financially strong partner. This was a bit lucky, but in hindsight, I created this luck by stepping up and talking to people who were much more experienced than I was, and who were doing what I wanted to be doing. This opened an important door for me.

    2. I thoroughly analyzed my downside. In my particular case, I was not going all in with my capital base, so that felt good. Also, the career field that I was leaving is constantly in need of people who are experienced and can do the job well. I had developed a solid track record and developed very good relationships with many very senior people in the industry. Ultimately I decided if this new venture did not work out, I could likely back track to my former career track at a level of pay and responsibility that was similar to what I was leaving. At worst, this new venture would be a 2-5 year pause in my banking career. This seemed like a prudent risk to take in order to answer the burning question I had: “Do I have what it takes to run my own business and be successful”.

    As a banker, the mistake I often saw people make was this. They made decisions on passion without also doing a thorough analysis. “I love to cook, so I am going to start a restaurant – without doing my homework to know for sure if it can really be successful”.

    I believe that the current tech boom and the internet causes people to glorify risk taking, and to glaze over the fact that planning and analyzing is prudent. But those stories are not sexy, and don’t told very often.

    From someone who spent 8 years working with owners of small businesses and saw why they succeeded or failed, and now as someone who owns and runs a fairly successful small business, please do this:

    1. Quantify your downside and actively decide if you can accept it, if it comes to that.
    2. Make a plan, poke holes in it, ask others to poke holes in it, refine it, etc.
    3. If you complete 1 and 2 and still feel your plan is the right thing to do – please, do it. You will regret not doing it.

    Leaving my comfort zone after careful planning and analysis made me who I am today, and I get terrified when I think about where I might be if I had not gone for it.

    1. Such a great comment with great advice. I hope others read this! In fact, I may just republish your comment as a post or in my newsletter, it’s that good.

      Making $150,000 – $200,000 in Oklahoma at 29 is definitely making it! How did you get that job, what is your education background, and what was the upside? I am very impressed you walked away from that situation at that age. Is your income greater now? How about the fulfillment?

      I just had TWO friends quit their multiple six figure jobs to team up and start their own business. Oh man….. I think they are each walking away from ~$300,000 – $400,000 a year in their early 30s. I wish them good luck! Startup life is brutally difficult to succeed.

      Related Post: Joining A Startup? Sleep With One Eye Open

      1. Sam,

        I’ve been reading your site since the beginning, and rarely comment (used to use the moniker “Bogey”). Thanks for the compliment, it means a lot. Actually, my goal when I wrote the comment was to eventually turn the story into a very detailed guest post for you. I’ve got nothing to gain by doing that, but I do feel that I’ve learned some things that would be valuable to others, and some specific situations that I really have not seen talked about on the internet.

        Let me answer your questions.

        Education background was valedictorian of my high school in small town Oklahoma, undergraduate degree in Finance with minors in Accounting and Economics from Oklahoma State University (3.9 GPA – full disclosure, school was fairly easy for me).

        The largest bank in our state had a rotational training program that I was aware of about 2 years prior to college graduation so I networked like crazy and my sole focus was to get into that program after graduation. And I did. Having formal credit analysis/banking sales training is pretty much the end all for people in this area who want a successful and fast tracked career in commercial banking (commercial loan officer).

        I stayed with this large bank for 3 years and went to a smaller, more or less start up type bank for the last several years of my banking career. That bank was bought by an out of state publicly traded bank in 2013 and that set me in motion to leave.

        My income is less now, mainly because we are aggressively growing the business (2 acquisitions since the original company purchase 2.5 years ago). Due to some financial engineering used on those acquisitions, our cash flow is fairly tight for the next 4 years or so. At that point, my income should basically match the previous level.

        Ultimately my goal is to work around 20 hours a week in a big picture strategy and CFO type role and hire someone to replace me as the day to day GM of the business. I’m 33 now and I’d like to ultimately scale my time commitment to this business back by age 40, and fill that time with other business ventures, golf, or who knows.

        My fulfillment is much greater now, even with much less income. In banking, especially in a large publicly traded bank based out of state, I was not free to make decisions. The people making decisions also did not know my customers (and in 99% of cases had not ever met them).

        I knew that I was a smart, motivated and decisive person, so I wanted to be in a situation where I could see what needed to be done, and just do it without 5 layers of approval. I am also free to take care of my people in the way that I see fit. I can do anything that I deem necessary to win a new customer or take care of an existing customer. We can move at lightening speed.

        To me this is heaven.

        If you believe your readers could benefit, I’d love to share my full story. Thanks for the value that you provide through this blog.


  22. A year ago I switched careers, went from working for federal government to construction. I gave up a comfortable position that would have yielded six figures in a few years, and I had great job security but the potential upside was extremely limited. I spent about 8 months going over pros/cons of going into construction. I found Tim Ferris’ example of imagining worst case scenario to be helpful because then you realize it’s not that bad.

    A year in and the pay is not as good, the hours are longer and I’ve got more responsibilities but my job is much more fulfilling and I’ve got much more room to grow and expand. Additionally my confidence has greatly increased from surviving sink or swim situations. All in all I’m glad I did it and this will likely accelerate our ability to reach financial Independence in 5-10 years

    1. Sounds like your new role has a lot more upside! Yes, it is very empowering to survive sink or swim situations. The biggest sink or swim situation is becoming an entrepreneur! Talk about being through into the middle of the ocean.

  23. Career changes are scary. You’ve gone to school, invested money, trained, and thought about the job you’ve wanted for years. Even after doing it for a few years and realizing that it’s not what you wanted it’s hard to admit that changing could possibly make you happier.

    I can relate to Andrea’s example. I’ve put alot of time and effort into the job I have and it’s incredibly scary to consider changing jobs. Ultimately I want to build a side income (rentals, online income, consulting income) so I can find my true passion for work.

  24. Mr. Freaky Frugal

    I’m FIREd now, but I’ve done my share of career changes.

    I always give the same advice to people that ask me about starting or changing a career. I tell them that you need to find a career that

    1) You have an aptitude for.
    2) You like doing.
    3) You can make a decent living at.

    Anything you can do to help validate your assumptions (like interviewing others already in your potential career or working part-time in your new potential career) helps.

  25. This is always a catch-22…you work hard for many years at a job you don’t like, finally get to a respectable income level, and then realize you’d rather be free instead. The paradox is that your freedom comes at the price of working longer at that job you now realize you don’t want, because the income it generates is the best guarantee you have to earn that freedom.

    I’m 40 years old and now earn a high income. I could theoretically jump ship after 15+ years with my company, but would be walking away from $1M in banked income every 5 years. How can I justify doing that with a family that depends on me? My solution is to find a balance/compromise. Invest 5 more years and bank the $1M, and then walk away to “something”. Hopefully I’ll figure the something out before the 5 years are out!

    1. It’s a tough call indeed. In five years, I promise you, you will suffer from the “one more year syndrome,” because you will probably be making even MORE money.

      Therefore, the key is to start your side hustle/moonlighting now while also aggressively investing your income.

  26. Ms. Conviviality

    For the past several years I’ve been moonlighting as a “florist” while working full time as an internal auditor. I’m actually doing a wedding this weekend and my flowers are coming in tomorrow. I’m so excited that I woke in the middle of the night here, reading FS, since I can’t get back to sleep! It’s been beneficial doing the business on the side since I bump into other flower/small business owners who are surprised that it’s possible to do a flower business without having a brick and mortar store. I’ve shared my reservations in running a full scale business and they’ve confirmed my concerns: dealing with too demanding brides has taken the fun out of it (luckily I haven’t had any bridezillas yet since my clients have been friends of family/friends), lack of vacations, less pay (at least in my small town), and managing employees who may be unreliable which will add to the stress when there’s thousands of flower stems to arrange (I only take on small wedding, around 100 guests, orders at the moment that I can manage myself). I would be taking a 50% pay cut, lose 6 weeks of vacation/holidays, and delay my pension benefits until age 62 rather than 52. I love doing flowers but for me to make comparable income I would need to do one wedding every weekend which would take away quality time with family/friends who we usually see on weekends and it’s physically tiring transporting/setting up for weddings. It’s SO SATISFYING to see all the flower arrangements in place at the end but it’s also nice to have time to recuperate before the next wedding. The plan is to hold out for another 15 years to get the pension benefits at 52 or reach FIRE before then and do as many or little weddings as I want because I don’t need the income.

    1. That’s a great side hustle! I like your idea of holding on for 15 more years for the golden pension and then doing more work on your side hustle. Just think, in 15 years, you will have 15 more years of florist experience! How could your business NOT blossom with that many more successful clients?

      1. Ms. Conviviality

        The flowers turned out wonderfully for the wedding yesterday :). I have been going back and forth between being extremely frugal to reach FIRE in 10 years or hold on for the pension since that would be 15 years with not that much difference in time frames. You have mentioned previously that if something is painful enough then it would be natural to take action to change the situation. The thing is, I like internal auditing and work with a really great group of people. Life outside of work is really fun too because we have the money and time (6 weeks vacation which I use up every year) to go do things with friends/family. There isn’t a great incentive for me to change but your blog has helped me to manage our savings in a smarter way. Glad that you think I should go with the pension plan. Funny that you mention how my business could blossom in 15 more years because “Blooming” is part of my business’ name.

  27. Sam!

    This hits home for me because I’ve been looking to do an 180-degree career change! After I retired from the Army 3 yrs ago, my current job nearly fell in my lap but is coming to an end this year. I’ve been debating whether or not I should chase money while I can or go for fulfillment. I’m definitely leaning towards fulfillment and am willing to make significantly less if I do something worthwhile.

    It’s too bad Capital One doesn’t have anything like this around Seattle according to the link you provided.

    1. I was actually w/ Capital One in Seattle last year, so they should be opening up a Capital One Cafe there soon, very soon!

      Fulfillment is fulfilling. So long as you make enough to save for retirement, I would go for fulfillment.

      1. Great! If you hear anything about Capital One Cafe in Seattle, please tweet it, would you? Thank you Sam!

  28. Mrs. Adventure Rich

    Both my husband and I have been in the same career since college (I’m with my original employer, he is with his second), but we have recently considered the possibility of pivoting (more so for him than me…). This outline seems like a great start as we consider our options for the future!

  29. That comment about doing something that aligns with your values really caught my eye. In many industries, I imagine values change slowly – which can be a problem in industries that still allow (or turn a blind eye to) sexism and discrimination. But what if what you work in has had rapid value changes over the past decade? And worse, you are now flatfooted on the wrong side of those changes? I have an example in mind, but I want to see if anyone else has had similar yet different experiences.

    1. I think many of us experience the, “After so many years doing one thing, what transferable skills do I have to do something new?” syndrome. I was thinking this way for a couple years, which is why I was afraid to leave finance.

      The reality is, unless the job is super technical, it is relatively easy to make a switch b/c most things are learned on the job. The core of having good communication, team work, problem solving, execution skills remains the same. And also being a general good all around person.

  30. Adam and Jane

    Jane LOVES baking! She attended the French Culinary Institute in 2003. She took a 20 weeks pastry course with a certificate which cost more than my 4.5 years of City College tuition. Friends and family suggested that Jane open her own bakery. I said No freaking way! My family are first generation immigrants and they all had they own businesses and all worked long hours. I used to work in a bakery cleaning up while I was in high school for min wage. It was hard work. I told my wife to just work part time in a bakery for fun but not to have it as her own business. Fortunately for us that she felt the same. In 2003, we made 250K combined and it is tough to walk way from her 115K salary. We could afford to buy pastries. Why bother making your own?

    Jane wanted to leave the company about 10 years ago and I said “That’s stupid. Why do want you to do that for?”. She had 20 years of service and she hated her boss. I knew that our company was stable and we have pensions. I mentioned to her that not many companies have pensions and that the grass is NOT always greener. She is a manager in application development. We had to adjust our minds to cope with stress and stupidity at work by taking more vacations like going to HAWAII!! A couple of years later her boss, all senior mgmt and a total of 350 people were laid off in 2012. It was rough for her since she had a series of bad managers. In 2016, my wife was shocked that she got laid off along with 500 people. We always thought that I would get laid off before her. She got a 234K severance, 52K pension and 8K yearly for company Aetna healthcare. I think she made a good choice staying. She is retired now age 52 collecting her pension and medical. She is SO HAPPY! Now, she bakes, cooks and test new recipes at home. She is loving retirement!!

    I wanted to be a computer programmer at age 13. I picked the public high school and the city college for the computer science program. Fast forward 30 years in the same company and I no longer develop programs which is what I love. Through the years, I am forced to manage and to support different systems not of my choice. I am still doing 24×7 on call and for the last 28 years. I am burnt out. I traded happiness for a decent salary with a pension. I sold my soul for a 70K pension and 8K yearly for medical for life when I reach 55 in 2.2 years. Quite frankly, I really don’t what else I want to do for a living if I got out of IT. I make 196K including bonus working from home to support obsolete IT systems doing 10-20 hours a week. Compared to what our parents did for a living, our jobs are easy so we should not complain even though we hate our jobs. To cope, I have been spending thousands on my vintage toy cars collection this year.

    Our passive income is $225K at 55 from muni bond and pensions. $305K at 59 from munis, pensions and 401K interest. $341K at 62 when we also collect SS. Our current expenses are $55K a year. I think that for 2 people that attended city colleges we did OK.


    1. You guys are doing very well indeed! It does make sense to hold on for 2.2 years to get that fat pension.

      What are the reasons why you guys don’t spend more given your income? Is it just part of your DNA to spend ~$55k/year after so many years?

      I have a tough time living it up as well, but I did finally lock down my mid-life crisis car and don’t feel a bit of guilt. Maybe it’s b/c 15 years ago, I spent even more on a new car!

      1. Adam and Jane

        Hi Sam,

        It is part of our DNA to save 50% of our incomes since we got married 25 years ago.

        We started to save 75-85% of our incomes starting in 2010 after we heard rumours of a re-org that will affect me negatively and also rumours of future laid offs.

        All of the rumours came true in 2012, 2016 and 2017, resulting in 1,000 people getting laid off. We are so fortunate that we took action to buy muni bonds to generate passive income to cover all expenses since we expected to be laid off before age 55 in the company which reduces our pensions.

        Our expenses from the last 7 years were 40-45K in preparation for laid offs. Now that the laids actually occurred and our incomes from munis and pensions are more defined, we actually loosen up starting this year and will spend at least 55-60K.

        I just told Jane recently that we don’t need to accumulate anymore and we are now free to spend. 2/3 or 3/4 of our lives are already over and it made me realized that life is short! We are still driving a 19 year old american car with 93K miles, a real sleeper.

        Congrats deciding on your mid-life crisis car! You have written several post on it and I always wondered what car/SUV will you get. You worked so hard to create your online business from the ground up and generated so much passive income from other sources, YOU SHOULD HAVE NO GUILT!! Enjoy it! I hope you can share it in a future post!! TESLA or Range Rover are my guesses.

        My dream car since age 16 is the Mercedes SL. Maybe one day but it is NOT stealth wealth. Maybe buy a used 560 SL. I love that classic body style with the chrome bumpers. We prefer to NOT attact any attention to indicate wealth. I am thinking of getting an american muscle car when I retire…maybe an orange Camaro SS with black stripes or an orange or crazy plum purple Dodge Challenger. This is just the kid in me talking since we want to travel after we retire. it does not make sense to have a new car sitting around.

        The goal is to get to Oahu, Hawaii….probably rent and live there part time. Since we love cruising, the other plan is to take 2-4 months world cruises. We actually would like to live permanently on a ship.


        1. Go for Hawaii. It is amazing. But I have a question for you. Are you finding it hard to uproot and go to Hawaii? I am, despite having family there b/c my network is here in San Francisco. I have no connections in Honolulu. I guess I don’t need connections, but they are nice to have in terms of helping my son get into a school. But maybe that’s really it. Well… there is so much business opportunity in SF that I wouldn’t be able to have if I went to Honolulu.

          1. Adam and Jane

            I totally agree with you since we have family all on the east coast and also no connections in Hawaii. That is why the wife wants to just rent 1-2 months in Hawaii. Our moms are close to 80 so we have to be close by should anything happen.

            You have a great life in SF, connections, business opportunities and should definitely keep a home base there but just rent in Hawaii too for a couple of months to relax.

            I like that you are willing to sell your one rental in SF to simplify your life, to lessen your stress and to focus on your family instead.

            I love having our own place around the Hilton Village Hotel. I like that area since we can walk to many places for food. I just love the idea of having our own place. I don’t have to unpack and to use a bed used by other people. Deep down I know that buying a place in Hawaii or anywhere else is not practical but I am sure my friends, co-workers and family will come to visit to stay at our place for free.

            We just have to rent a place with 2 bedrooms unless it is too expensive.

            Buying a place in Hawaii our pipe dream. I actually see us staying on a cruise ship for 3-4 months more than living in Hawaii. It is more practical for us. On the ship, we dont have to cook and clean. Over 10 years ago, we actually considered buying a condo on a ship.


    2. Wow. This is impressive. Made me wonder enough to look for companies and government jobs which provide pension. A $100K+ in combined pension as passive income would take easily over $2M to generate that kind of income. Why did pensions die in US? Pension is probably the MOST under-rated retirement passive income stream.

      Besides pension, what lese provides you $225K passive income, if I may dare to request to know?

      whoa, indeed. And Thank you for sharing!

      1. Adam and Jane

        Definitely look for companies and govt jobs with a pension! You are correct. Need 2.5M of tax free 4% municipal bonds to generate 100K.

        Our 225K passive income is from pensions & medical (52K+70K+8K+8K=138K) and remaining 87K is from our 4-5% individual municipal bonds portfolio. We have NO money in the stock market. I have a Fidelity account and I pick my own muni bonds since a financial advisor at a bank or at a brokerage firm will charge 2% more for each bond. Sam wrote a zero coupon muni bond post and I replied with the criterias on how we buy muni bonds. Don’t buy a bond fund. We buy the bond for the interest and we will hold it until it matures or gets called so that we alway get back our face value of the bonds.

        “Why did pensions die in the US?” Because is it financially Expensive for companies to generate that much money for each employee. That is the reason why our company laid off 1,000 workers from 2012-2017 and replaced them with cheaper employees from India!


        1. Hi Adam,

          Thanks so much for your reply.

          I guess most of us are illiterate when it comes to Pension, as we have always believed that it does not exist. I did work for US Military, for 2 years, albeit as a contractor. Now, you made me wonder if I should spend last 10 years of intended work life back there.

          I could google, but would prefer to know from you re: pensions:

          1. How many minimum years you have to work to get pension?
          2. If I get pension, but if I die, will my spouse get anything on my behalf?
          3. What stops a company/govt to layoff a person just before that become eligible for pension? Is there any protection against such a practice?
          4. Anything else relevant to pension one should know?

          I think you are uniquely unique to have such a high passive income without having stocks or even RE in your portfolio, which is truly 100% passive, and on top of it 100% RISK FREE!

          I bow down to you Sir, I wish I met you 20 years ago :-)

          I shall learn about your ways of choosing bonds. I am certainly underweight in bonds, and just invest in VG Total Bond (BND), mostly.

          Kind regards.

          1. Adam and Jane

            CuriousOne, below are the replies to your questions.

            1. How many minimum years you have to work to get pension?

            1A. In our company, you have to work 5 years before you are eligible for a pension. To manage cost, our company don’t have the traditional pension plan like mine for new employees. They changed this over 5 years ago and employees with is plan gets a lot less money now. You need to see how is the pension calculated at your new employer. New employees also get 4% 401K matching whereas we get 3%.

            2. If I get pension, but if I die, will my spouse get anything on my behalf?

            2A. Yes, for example I get a pension of 70K (75% to my wife) when I reach age working age 55. When I retire, I can choose different options. Default is 75% to the spouse. I can choose 0% for the wife but my pension will be about 5K more per year BUT spouse will need to sign and get it notarized to approve it. It think this option is STUPID! Other options are 50% which is also financially stupid too. As shown below is my pension estimate at age 55. 75% is the best option to protect the spouse.
            Me Wife
            Option 1: 0% to spouse $75K $0
            Option 2: 75% to spouse $70K $52K
            Option 3: 50% to spouse $72K $35K

            3. What stops a company/govt to layoff a person just before that become eligible for pension? Is there any protection against such a practice?

            3A. Protection? LOL. Companies has many lawyers to protect them! In our company, they laid off a ranged of workers before age 50 and after 50 so that it does not seems to descriminate against any one group. They have spreadsheets to ensure it looks good on paper to avoid law suits. Plus, they make you sign agreements to NOT talk about about the company, take any legal action, etc if you want the severance. They ain’t stupid! So many major companies did away with pensions and screwed the workers. I must say that our company was QUITE generous with the severances and pensions with people that were laid off.

            4. Anything else relevant to pension one should know?

            4A. If you find a company that has a traditional pension then run to that job and hang until you can retire! Consider being a teacher, police officer or in sanitation. My friend just got a city job in sanitation. In 22 years, he can retire with a pension. I have several friends that retired from the police force after 20 years from NYC. It is a dangerous job and the pension is great if you can survive. It is now 22 years for a new police officer to retire.

            “I think you are uniquely unique to have such a high passive income without having stocks or even RE in your portfolio, which is truly 100% passive, and on top of it 100% RISK FREE!”

            Reply: I think you are correct that we are so fortunate to have this passive income and a portfolio so conservative. I have not seen too many if any of Sam’s readers to be 100% stock/RE free. We have a starter home under 1,000 SQ FT mortage free. Our 401K at the company are invested in fixed interest investments earning over 4% risk free. Each of our 401Ks generate 40K each year as long as the interest rate greater than 4%. At 59.9, we can withdraw interest without affecting principle if the interest rate continues. If the interest is 0% then we will just draw down. At this stage, we can’t take the money with us when we die. We have no kids. Since we have 3 income streams and each stream covers our expenses separately we are financially secure. So that if 1-2 income streams are gone then we would still be OK. I am the youngest of my peers with 30 years of service. Most of my older peers retires at age 59-62. Actually most of them were laid off. At age 58 their pension is like 88K and over 100K at age 62. Pensions grows around 6K every year after age 55. I am happy with 70K at 55 and I will retire. I don’t need anymore work stress and am extremely content with my pension amt.

            “I bow down to you Sir, I wish I met you 20 years ago :-)”

            Reply: LOL.. I am just fortunate! But if you can’t find a job with a decent pension then consider buying individual municipal bonds if your State is financially strong. We increased our savings rate from 50% to 85% and saved like MAD! You can use your savings to buy muni bonds to create your own pension. That is what we did with our life’s saving when we prepared to not have a job anymore. Due to laid offs, our pensions will be reduced so we got tons of muni bonds to cover expenses instead of letting the money earn .15% in the bank.

            Since we are VERY financially conservative, I WISHED we knew about Municipal bonds 25 years ago!! My accountant said he has some that paid 7.5% tax free BUT he NEVER told me about them until we started buying them. A close family friend introduced them to us after he lost his kid’s college education fund with mutual funds. Now, my mentor only buys munis and corporate bonds. Because our mentor shown us a path to FI, we are SO GRATEFUL and we have been paying it forward sharing what little we know with friends, family, and readers to find a way to being Financially Independent.

            “I shall learn about your ways of choosing bonds. I am certainly underweight in bonds, and just invest in VG Total Bond (BND), mostly.”

            Reply: the main reason, we avoid a bond fund is that the NAV changes everyday. Since interest rates are low now and they will rise one day. As interest rises, the bonds in the bond fund may drop in value causing the NAV to drop. You may lose principle. That is why we ONLY buy individual municipal bonds that are 100% tax free. We buy the cow for the MILK!!! We hold the municipal bond until the end so that we don’t lose any face value principle. Some of our bonds go out to 2045 at 4% tax free. Some people say that is too long. I say so what! That is like a 6% CD at a bank. If your bonds out live you then before you die add your children name(s) to the account so that they will inherit your legacy.

            I look for muni bonds with a coupon of 4% or higher. I try pay PAR ($100) face value but since muni bonds are in higher demand, prices are higher. A 4% bond can go for $102 to $103. I try to not pay more than 6 months to one year of interest to break even. I look for bonds with YTW (Yield To Worst) greater than 3.5%. I buy bonds rated A and higher. Buy what you know.

            My Muni bonds criterias

            1. Ratings is extremely important. I tend to avoid investment grade which is a B. I look for bonds that are rated a min of upper med grade (single A).

            Best quality – AAA
            High Quality – AA
            Upper Med Grade – A

            See this site for the ratings chart –

            2. Buy what you know.

            I like MTA (mass transit), water, Dorm Authorities for schools and hospitals. Make sure the school and hospitals are well know. People will always need these facilities. Bonds will vary from state to state so buy what you know in your state.

            3. I only buy Revenue Bonds. I avoid GO (General Obligation) bonds. With revenue bonds, municipalities can increase revenues to pay back bond holders.

            I started out buying GO bonds because they were backed by taxes. Many thought that GO bonds were safe too until issues in Detriot and Puerto Rico. As a result, I now buy REV bonds. To be on the safe side, one can buy a mixture of GO and REV bonds but it comes down to financial stability of your state.

            4. Tax exemption. Make sure it is totally tax free. Check the bond details.
            Federally taxable – NO
            Subject to AMT – NO

            5. Insured

            If a muni bond is insured then the bond is safer. Insured bond are tough to find and they are usually a bit more expensive.

            6. YTW (Yield To Worst or Yield To Call) greater than 4%. In a 33% tax bracket, it is like a 6% CD.

            YTW is the min the bond will earn when a bond is called. Most bonds are callable after 10 years of being issued so I dont really pay attention to maturity date. Bond prices are currently dropping so I like to buy bonds in x amounts. Dont spend all your money on just one bond. Currently, I can easily buy a 4% bond below PAR. I am hoping to get 4.5% YTW next and then a 5% YTW bonds in the near future. In the end, just be happy with the yield and dont go crazy if the bond price drops. If you hold the bond until it is called or matures then you will get the face value back to avoid lost of principle except for the premium paid.

            I like to sort all the munis for my state with YTW in descending order which will display the highest yield at the top of the list. This makes it easier to select a bond.

            7. Call dates, mature dates and month interest is paid.

            You can buy bonds with different call dates and maturity dates to create a bond ladder. This way your bonds will return your principle at different years so that all of your money is not locked to a specifc year.

            I also look for bonds to pay on different months of the year so that I will get bond payment every month. This is not a show stopper but it is nice to get payments every month.

            8. Price of the bond.

            Try to buy bonds at face value of $100 (PAR) or less. If you have to pay a premium then pay at most 1-2 dollars. For example, a 4% bond at $102 will take 6 months to break even. When this bond is called or matures, only the face value is returned to you. If you paid a premium then it will result in a lost of principle. This is not a big deal if especially you are happy with the yield and the interest you received.

            1. Very helpful info about bonds! Thank you so much for spelling this out for us. I’m going to head over to Fidelity and check out my state’s munis. I’m super conservative and would like to invest a lot less in the stock market.

            2. Hi Adam,

              Thank you so much for taking the time to explain in detail. I also read Sam’s latest post, and it also had a link to his “Case for Bonds” post and I read your replies there as well.

              Bond market is less understood, but appears more…scientific, for the lack of a better term :-)

              I live in Colorado, and did search on the bonds, both at Fidelity and ETrade. Not sure if I found any.

              Bond Funds are definitely deceptive. For example, the most popular in CO happens to be HICOX. But it has a 4.75% Front Load Fee. Well, that is CO state tax to begin with. You pay the State tax to buy, and then hold it for a year to break even? Thats stupid.

              Anyways, I thank you again. I do hold an MBA degree, perhaps its time to dive into the intricacies of individual bonds, as I do have a lot of questions in picking individual bonds.

              Kind Regards.

  31. Mr. Smart Money

    I can definitely relate to the story of the banker->baker right now.

    There are definitely days where I wonder if I should have stayed instead of quitting my six figure job to pursue my dreams. I guess only time will tell :)

    Sidenote: That coworking space looks sick! I wish we had more of those around where I live.

  32. I have always wanted to follow my passion and be in business for myself. However, with two young kids and bills to pay, the trade offs is very risky. Secondly, as you mentioned, there is no guarantee that you will be happier. After some soul searching and analysis for a while I decided to develop a new appreciation for my job, work on my passion as a side hustle and try to reach FIRE in nine years. When I reach FIRE I can choose what I want to do without anything to hold me back.

    1. I think that’s a great strategy, Leo! I agree with you that when family duties call, it’s hard to just leave everything on the table to pursue your dream. My husband has been dreaming about being a historian, but he knows that getting a degree in History won’t be financially viable for our family. He told me he would take classes in History in the future to pursue one of his passions.

      I haven’t thought about changing my career, but I have thought about moving from the nonprofit sector to the private sector after 2 years of working in the former. It won’t be as drastic as Andrea’s story since my skills are transferable. But a lot of people have been warning me about the stress of pressure of working in a private company. I guess I can only find out once I give it a try.

    2. This is the exact plan my husband has. He’s a lot like Andrea!! He wants to be a master baker too (and I reap the fatty benefits hehe) but there’s no way it’d smart to give up his salary for a new baker with no following. It is in the works that after he FIRE he can take over my kitchen and bake as much as he wants ;)

  33. I’ve been through a couple of career changes. My first one was right out of college. I majored in business finance but hated it. What to do? I didn’t want to go into finance. I ended up reading and doing all the exercises in the book What Color Is My Parachute? and leaned that my values and skill set were more aligned with a career in marketing. So it was off to Marketing as a copywriter and then a marketing communications manager and finally a brief stint as a product manager. Now I’m a UX writer for mobile apps and websites.

    Looking back, I’ve had so much fun in the workforce. I’m glad I had the guts and knowledge at a young age to turn away from something that felt wrong (finance) and go into another area that suited me so much better (marketing, copywriting). If I had followed through with finance, I’m sure it would have taken me years to get back on track doing something I enjoyed. So here’s to What Color Is Your Parachute and following your gut — but do enough research first before taking the plunge.

  34. I haven’t thought about a full career change, but I have thought about moving into a different area in Finance & Accounting. Maybe something like forecasting or budgeting. That would be more in alignment with stuff I write about. However, the pay cut would be the biggest thing to consider to be honest. This Bank looks awesome; I wish my credit union was like this :-)

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