So I’ve done it again, I’ve written about a subject that is far too long for one blog post, and so I’m going to split this one in two. Probably I am too wordy in places and for that I apologise! It’s just the way my mind works, I like to think through every aspect of a problem before coming to a conclusion. Anyway here you go, part one mainly concerns my reasons for staying in my current job, and part two looks at my reasons for potentially leaving.
I’ve been thinking about looking for another job recently. Actually I thought about it a lot a few years back and decided against it, but now the idea has resurfaced. Someone I work with has been talking about moving jobs to further her career, and it got me thinking – maybe that’s what I should be doing? I’ve been with my current employers for about five years and reached a bit of a dead end in terms of promotions so the logical next step is to move to a different company, or try and find another position internally.
But it’s never that simple is it? I bet there are lots of people out there in a similar situation. Reasonably happy and secure in their positions, but could perhaps do better if they really thought about it. Perhaps lazy, or even fearful of upping sticks and moving roles. I’m sort of vaguely aware that I should get off my arse and improve my career, but on the other hand there are a lot of very good reasons to stay in my current position.
As the title of this blog is ‘My Deliberate Life’, it seems in the right spirit that I should think about it all very carefully before making any decisions. I’m not going to leave just because cultural norms of career progression, or peer pressure, or envy of others is compelling me to. But equally I shouldn’t stay just because I’ve grown comfortable or lazy.
Firstly though, before I launch into the pros and cons of leaving my job, how does this fit into the FIRE strategy?
It seems to me there are generally three parts to an early retirement strategy:
- Save as much as you can. There are different levels of saving, depending on the appetite of the saver. Jacob on ERE I think probably has the most extreme savings strategy, involving living in an RV (a trailer home), ditching his car, making his own food and so on. I think he has some good ideas but most of us will probably opt for a slightly less extreme form of saving. We’ll probably still end up buying a house but it will be a more modest one, perhaps closer to work. We’ll probably still buy a car but it will be a cheap and reliable second hand one. We’ll probably cook our own food and make our own pack lunches, but we’ll still eat out from time to time.
- Invest your savings. Again there are whole blogs set up for just this subject including the excellent Monevator. From my limited exposure I reckon there are three main varieties of investor. There are the ones who actively invest in the stock market, buying shares in particular companies because they think they can beat the market or they just enjoy it. There are investors who put their money in index trackers and the like, spreading the risk across many companies and countries and looking for the lowest costs for holding their money there. And then you have property investors, people who buy houses hoping they’ll make money from rent and price appreciation. Are there any other types of investors? I’d be interested to know, but those seem to be the main groups.
- Earn more. There’s a lot of talk about ‘side hustles’, that is, earning a bit of money on the side in addition to your day job. I’ve dabbled in matched betting and casino offers for example over the last two years and made a fair bit of money through it, though I don’t really like giving up my free time for it (check out Matched Betting Guy though if you’re interested, I got some great tips through there). I saw FFBF makes money through Kindle books though I must admit I’ve no idea what that involves. I know someone personally who writes freelance articles and sells them to papers and magazines. There are lots of options for side hustles.
Some people earn more by having their own business though I’m not too interested in that – my parents have a home business and I’ve seen firsthand the stress, the arguments, and the money worries it causes. It has done reasonably well, don’t get me wrong, but it’s not for me. Perhaps I’m just a pessimist, but I want to be able to walk away from it all when I’m done, and that is so much harder when you own your own business.
There is another option that is contract work, which is a sort of hybrid of work and business – you are your own limited company, but you generally make your money being employed by a company. There are no work benefits as such – if you’re sick you don’t get paid, you don’t get extra pension contributions, or employee perks – but contractors do seem to get paid a lot more, about double in my experience after benefits. They generally work say 6-9 month contracts so there’s a lot less security of employment, but then the ones I work with seem to keep coming back so they’re sort of semi-permanent. Plus they can take off a nice 3 months holiday at will, though of course they’ll be paying for it in lost pay. Contract work is something I’ll look at later.
Finally, the most obvious way to earn more is through employment, through switching jobs to earn a bigger pay packet, and through career progress, learning new skills, getting promoted and so on. This is what I’m looking at in this post.
When deciding whether to look for a different job there is a lot to consider so I’m going to do the classic ‘for’ and ‘against’ set up. Hopefully this will make things clearer at least in my own head.
Should I Stay? Arguments in Favour of Staying:
1. The first thing to say is that I earn a pretty decent salary already. Generally speaking in this country people don’t like to say what they earn, but what the hell, I kept this blog anonymous for a reason and that is so I can be perfectly frank and honest about such things. So here you go, last year my basic salary was £40,000 and my bonus was £5,500. I contribute 6% of my basic salary into my pension and my company contribute another 20% so the way I see it my salary is actually £40,000 plus 20%, that is, £48,000. In my experience the bonus is about the same each year and it always seems to get paid, but in theory it’s not guaranteed.
I guess my point is that I should be happy with this, and I am. My first job out of university only paid £17k so I know what it’s like to live on a lot less. I’m sure there are plenty of people out there who would be very happy to be earning what I’m on (I think the average salary in the UK is about £27k). Even so, it’s human nature to want more. In fact I read somewhere that the average person thinks they’d be happy if they earned about 35% more, which seems about right to me! (Add a third onto your current salary – would you be happy with that?) Of course, once we’re earning more, and we get used to that higher earning, we naturally want even more. So where does it stop? Perhaps it’s important to learn when enough is enough, and start to concentrate on what else makes us happy (aka the MMM philosophy).
The other thing to mention here is that I live in Northampton which is a relatively cheap place to live, so I would say that my salary is comparatively high compared to someone earning the same amount in, say, London. My brother lives in a pokey 1-bed flat in London and pays £1,100 rent a month for the privilege, in contrast you could rent a nice large flat in Northampton for half that price.
(You could argue that your average Londoner will earn more and – assuming they can get on the property ladder – they’ll eventually be able to sell that place, move somewhere cheaper and pocket the difference. Personally I’m not convinced it’s that simple and at the moment it looks like the London house price bubble is slowly deflating so it’s a risky strategy. Still, there are other benefits of living in London. Moving or simply commuting to London is a possibility I’ll look at later.)
2. I’m now in the 40% tax bracket. Obviously I don’t get taxed on my pension contributions, but last year my property income was about £10k and that along with my basic salary and bonus means I now have to pay 40% on any extra income I make. It may still be worth me getting another job if the pay is much better, but if I end up having to spend more on travel, or moving, then it may not be worth it at all.
There is also the question of child benefits – I understand at the moment the salary threshold is £50k – so if I earn more than that I won’t get any child benefits. I don’t have any children currently though I do plan to in the future. In any case I think this is a bit of a moot point – with my property income I’m already well over the £50k threshold. There is of course the possibility that I could reduce my work hours to, say, 4 days a week, but I think my property income is only going to increase so I’d be fighting a losing battle. Besides, it’s a nice problem to have as they say.
3. I have a good work/life balance currently. I leave my house for work about 8am in the morning, and I’m usually home by 5pm (I think it’s important to include travel time when considering the hours you work). I rarely take work home with me or work extra hours.
My boss let’s me work from home one day a week which is great for getting little things done, like clothes washing, or sorting bills out or what have you (don’t take that the wrong way, I still do a full day’s work, but all those little breaks you take at work, chatting, walking to the canteen to get a tea, playing table football… those little breaks are put to better use at home). At work I can make personal calls during the day if I need to (I couldn’t do that in previous jobs). My boss is also pretty good about things like doctor’s appointments, and other trips out during the day, assuming they aren’t too frequent.
I also get on really well with the people I work with, we regularly go out together, go round each other’s houses for food/games/drinks, and generally have fun. We push each other on the exercise front too – we do the Park Run together on Saturday mornings and there’s a bit of healthy competition over our times. I assume that I would get on well with people wherever I work, but it’s not guaranteed, and I have to say I’ve grown fairly attached to some of the people at work (though I wouldn’t admit that to their faces!).
And finally on this point my holidays are pretty flexible too – I’ve never had to work over Christmas (unlike in previous jobs), and in five years I’ve not once had a holiday request denied. As mentioned before I’ve also wrangled an extra long holiday next year, using 22 days paid holiday and 20 days unpaid leave to give myself January and February off. I’m not sure if other workplaces would be so accommodating.
4. I have two properties in Northampton, and potentially hope to add more. Moving away from Northampton therefore raises difficulties. I know the property market here well so if I’m going to continue investing in property then this is the place to do it. It’s possible I might be able to find another job close by and so this wouldn’t be an issue, but it does mean I can’t just go to any old place when looking for a job without first considering what I would do with my properties.
Most letting agents won’t look after HMOs (house of multiple occupancy) which is what I have, though there are some that do. The thing is, I’m actually quite good friends with some of my tenants (I did used to live with them after all), so I don’t want them to be treated badly by a letting agent. But then maybe I’m just being protective and perhaps it would be better to let a professional look after my houses.
In any case, hiring a letting agent would cost money and reduce my passive income. In some ways looking after the properties myself is a little like a second job – it’s very sporadic work with not too many hours, but work nevertheless. Eventually I will have to lessen my control over my houses by hiring a letting agent, or sell them, because when I retire I don’t want to have to do much (if anything at all) to look after them.
One other thing – to be a BTL landlord you do often get asked to provide evidence of income from employment when applying for a mortgage. If I was within a few months of starting a new job I have a feeling some mortgage providers would be hesitant, and I understand they’re even more hesitant when it comes to contractors – some asking for up to three years of proof of income. It’s probably not too big a deal but it does make me pause before leaping.
5. My pension scheme is pretty awesome. As mentioned above, I contribute 6% of my salary and the company contributes another 20%. I’m not sure I’d be able to get anything as good elsewhere really, so the salary in a new job would have to be quite a bit better. I checked where the pension contributions go and they go into a fairly well diversified index tracker with a low cost (about 0.3% I think it was), which is not bad I think. I also get 27 days holiday – new starters only get 25. I pay a small amount for things like private health and dental care. And there are other work benefits, I get corporate gym membership for example, and cheap cinema tickets and so on.
6. The final thing to say, in favour of staying in my current job, is that I feel secure. The work we do in our team is pretty vital to the business, and I am a fairly important part of the team (if I may say so myself). I look after new starters when they come in, I have a good reputation with our stakeholders for getting things done well and on time, I’m known for having a good eye for detail and not making mistakes. And the organisation I work for is large and not going anywhere anytime soon.
There’s been a lot of talk in the news about automation and robots taking over our jobs. I don’t see that happening to us to be honest. If anything I see our roles expanding in future (I work in data and there’s a lot of talk about ‘big data’). What’s more likely is that our jobs could be farmed out to an office in India (or Lithuania, Malaysia etc) where the wages are much cheaper. It’s not something that keeps me up at night, but I’m also painfully aware how quickly these things can happen. On the other hand, I’ve been with the company over five years now so I’d probably get a decent redundancy payout, so perhaps it’s not something to be too concerned about. And at the end of the day there is the same risk in every company – moving jobs isn’t going to change that.
Security of employment is perhaps a bigger issue for people with a family to support, but I would say it’s still a big thing for me too. If I lost my job and couldn’t find another one reasonably quickly then I’d be forced to sell my houses, a big part of my retirement plan.
So to summarize, the case for the defence (ie staying in my current job) is this:
- I get paid fairly well already
- There are diminishing returns to getting paid more
- I have a good work/life balance
- My property investments are tied in to my current employment
- I have great work benefits that I’m not sure I’d be able to replicate
- I feel secure
What could possibly make me want to leave? This all sounds fairly conclusive does it not? Well… There are some very good reasons for leaving, which I’ll talk about in the near future.
What do you think, have I considered everything? Are you in a similar situation, happy where you work, or desperate to leave? I’d love to hear your stories.
As always, thanks for reading,