40 Year Old Father of Two Wants to Escape “Soul-sucking” Corporate Job

Here’s What Moves he Needs to Make

Ben Le Fort
Jun 18, 2019 · 5 min read
A row of chairs and cubicles inside an office building.
A row of chairs and cubicles inside an office building.
Photo by kate.sade on Unsplash

What’s the point in being a millionaire if you are completely miserable?

He is open to one of two possibilities.

  1. Gutting it out another 15 years and retiring by 55.
  2. Quit his corporate job in 3 years and get a more fulfilling job that pays less.

Before we dive into which of these options makes more sense, let’s review his financial situation.

Income

  • His base salary is $200,000
  • He receives an annual cash bonus of $35,000
  • He receives an annual stock bonus worth between $35,000-$75,000
  • His wife’s salary is $80,000

Total annual Income: $350,000- $390,000 (pre-tax)

Estimated monthly take-home pay: $19,583-$21,416

Monthly Expenses

· Housing costs- $5,000

· Nanny- $3,600 (this expense will go away in 2 years)

· Groceries & Restaurants- $1,500

· Car- $500

· Miscellaneous/Entertainment/fun- $1,500

Total monthly expenses: $12,100

Monthly surplus: $7,483-$9,316

Assets

· 2-bedroom Condo- $1.2 million

· 401k/403b- $600,000

· Cash- $200,000

· Crypto currency- $30,000

Total assets= $2,030,000

Debt

· Mortgage- $700,000

Total debt= $700,000

Net worth= $1,330,000

Now for the big decision.

Grind it out another 15 years or take a pay cut in the next 3 years?

I get the feeling that this individual truly hates his job and is unhappy working there. Working off that assumption, it seems clear that he should not “grind it out” another 15 years but should instead look to switch to a job he enjoys more within the next 3 years.

The question is, can he afford to do it?

Yes. Provided that he reigns in his spendings. Currently, he brings in between $270,000-$310,000 per year. I’ll make another assumption that he could find a more fulfilling job making the same amount of money as his wife, $80,000. This would bring their combined pre-tax income to $160,000 per year, which translates into $9,500 in monthly take-home pay.

This would cut their take-home pay in half and would be less than their current monthly spendings of $12,000. Putting myself in his shoes, I can imagine that number would be quite terrifying.

On the bright side, $9,500 per month in take-home pay should be enough to get by, even in a high cost of living city like New York. The other thing he has working for him is that he is already a millionaire!

Over the next three years…

The next three years are critical. During this time, he needs to lay the groundwork to exit his “soul-sucking” corporate job and peruse more meaningful work while taking a pay cut.

The first thing he needs to do is throw out his current budget (assuming he has one) and create a new budget assuming his household take-home pay is $9,500 per month. I’d recommend this for two reasons.

1. He needs to get used to living on a tighter budget.

2. That will free up significant monthly cash flow to invest over the next three years.

This means he will need to cut back his spendings by at least $2,600 per month.

Let’s start with the low-hanging fruit. Every time I visit New York City, I frequently comment that I would hate owning a car and driving in New York City. He should get rid of the car and free up $500 per month.

Next, let's address the fact that he is spending $1,500 per month on food. I’ve written in the past that eating out at restaurants is one of the areas where we waste the most money.

· Step one: stop eating at restaurants on a regular basis.

· Step two: plan out your meals in advance to reduce your grocery bill.

If he follows the above two steps, he should be able to knock at least $800 off his food budget, bringing it down to $700 per month.

So far, we have trimmed $1,300 off his monthly spendings. We’re halfway there.

Next up, he needs to drastically cut back on the $1,500 per month he is spending on “fun” (which he admits he needs to address). He needs to immediately cut this in half. He should be able to survive on $750 per month of “fun money”.

He still needs to find a way to reduce his spendings by another $550 per month. The obvious suggestion would be to get rid of the nanny which is costing $3,600 per month. However, I don’t like to tell people how to raise their kids and he has stated that this cost will be going away in three years when his youngest child starts school. Given that fact, I’m going to give him a pass on the last $550.

  • This would still reduce his current monthly spending’s from around $12,000 to $10,000, giving him a monthly surplus of $9,500-$11,300 over the next three years.
  • If he invests every free dollar over the next three years, he would be able to increase his retirement nest egg to $1.1 million-$1.2 million.
  • If we assume his cryptocurrency, cash reserves and home equity do not change in value he would have a net worth of nearly $2 million.

After three years when he quits his corporate job, the $3,600 per month nanny expense would go away. This would bring his monthly spending’s down to $6,500. That’s well within the assumed $9,500 take-home pay, which means he could increase his standard of living, continue saving for retirement or take an even lower-paying job if that makes him happy.

He’s been trading happiness for money his entire life and it’s paid off; he is a millionaire and has the potential to be a multi-millionaire in three years.

Now is the time to start trading money for happiness. After all, What’s the point in being a millionaire if you are completely miserable?

What do you think? Should he grind out the job for 15 more years? Should he quit in 3 years? Should he quit today? I’d love to hear your thoughts in the comments below.

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This article is for informational purposes only, it should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any major financial decisions

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Ben Le Fort

Written by

Sharing personal finance lessons I’ve learned on my journey from debt to Financial Independence. Join the Financial Mentor Program: https://bit.ly/35WV7Az

Making of a Millionaire

Stories about money, personal finance and the path to financial independence.

Ben Le Fort

Written by

Sharing personal finance lessons I’ve learned on my journey from debt to Financial Independence. Join the Financial Mentor Program: https://bit.ly/35WV7Az

Making of a Millionaire

Stories about money, personal finance and the path to financial independence.

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