Short term loss for long term gain

It’s been a while since I  have updated you all on the dream job. I applied for a job back in February and over the last 11 months have been slowly moving through the exhaustive hiring process. Thus far, I have peed in a cup (twice), completed a medical screening, passed an extensive physical fitness test, survived a three person hiring panel, passed a written test, completed a 700 question psychological exam, and undergone psychaiatric evaluation, oh, and I’m still not done with all of the hiring steps.

Needless to say, it has taken a good chunk of time, as well as a lot of work, to make it this far in the process. As a potential final job offer nears (fingers crossed), I need to begin to plan my life accordingly. One of the interesting things about this dream job; my starting salary could possibly be $20,000/yr less than what I currently make. That’s a whole lot of dinero to give up.

I’ve explained before the government pay system, but one thing I did not hit on was the consequences of switching positions. Come February, I will be a GS-11, which means I will be making $62,000/yr. The position I applied for starts at a GS-7 ($42,000/yr) but progresses to a salary much higher than my current positions maximum salary (the most I can make in my current position is $90k/yr, the dream jobs max salary is $143,000).

So here is the dilemma. If I am offered (and I accept) said dream job, then my income will immediately drop $20,000/yr. At approximately two years, I would be making equal money to what I’d be making in my current position. And from the third year on I would be making increasingly more money each year. It would be a short term loss of income, for a long term gain.

I know what most of you are probably thinking. “Take the pay cut while you are young and not really dependent on a large income”, that is definitely good advice, but it is not that simple. Reducing my income for the next two years would severely hinder my goals to pay off my student loan, to fully contribute to my Roth IRA while I am young, and to save for a large down payment. Not to mention, that if I ended up not liking the dream job, I would have taken a huge income hit for nothing. I have weighed the pros and cons of both options and made a decision, but before I share that, I’d like to see what you all had to say.

Could you afford to give up a large portion of your income, for a long term gain? Did you ever start a job you thought you’d love, only to realize it was absolute misery? Have you ever done anything like this? Was it scary? Did it work out like you thought? Is taking an initially lower paying position considered “taking a step backwards” in my career? I’m in a pickle and I would love some help 🙂

23 thoughts on “Short term loss for long term gain”

  1. Definitely take the short term loss for the long term gain. It's pretty much the same reason one goes to college, n'est-ce pas? I can tell you from personal experience that time flies, two years is nothing to reach your current salary. I took that shortcut and it has not paid off so great. I'm stuck in a dead end job for another 25 years because of my lack of education. It will be a tough two years but from what I can tell on this website, you will handle it. In regards to the Roth IRA, I pulled this from Wikipedia, "Up to $10,000 in earnings withdrawals are considered qualified (tax-free) if the money is used to acquire a principal residence for a first time buyer. This house must be acquired by the Roth IRA owner, their spouse, or their lineal ancestors and descendants. The owner or qualified relative who receives such a distribution must not have owned a home in the previous 24 months." Hope that helps a little.

  2. I would definitely stick with your current job. In an earlier post you mentioned how your Dream Job would require you to relocate, initially and possibly throughout your years with the agency. Given your current life goals/plans for the next 2-5 years (marriage, children, SAHM, and house), that requirement, in and of itself, would be a deal breaker for me. (Your fiancee should have a big say about how much, or more importantly how often, she'd be willing to sacrifice with the relocation aspect of the job.)

    On top of that, there's that $20k salary cut. Considering that you have quite a bit of room to grow at your current job, I don't see a need to sacrifice now to increase your salary cap for later. You can increase your salary cap down the road with an entirely new job and command a higher salary sooner with your current position/pay.

    I have a hunch that you will be sticking with your current job =]

  3. 2 things I've learned over the years about jobs.

    If you say no to a job opportunity, the likelihood of having something similar pop into your life is pretty decent. If you qualified for it once, you probably can qualify again.

    If you make the jump and hate the job, you can probably also go back to the old job if you hated it. My friend quit a high paying sales job to go build bikes for a living at 1/3 the pay. He went back into sales when he realized small companies mean he also has to clean the toilet and take out the trash in addition to building bikes.

  4. My final thought to my last comment is this..When I was younger, I thought of some opportunities as "once in a lifetime" and they're not. Similarly, if you go down one path and realize it was a mistake, you can always change your mind and have a do over.

    I'd go for the dream job with higher earning potential and I consider the travel a plus at your get to see the world on someone else's dime.

  5. All the people above have great input, so look at it a different way.

    You went to college instead of entering the job market after high school. You made that decision, and I assume it was pretty easy. So think back to the real reasons we all go to college and sacrifice 4 years of income, that should help solve your problem.

  6. Can't really say Ninja. I have liked both jobs I have had. I only switched from the first to the second because I liked the work better, and it was a slight increase in salary.

    But like you say, money isn't everything. And definitely discuss with Girl Ninja.

  7. I think you should take the dream job. Getting the chance to do what you've always wanted to do doesn't happen that often or for everyone. Take the chance.

    The 20k drop is definitely something to consider but as others have said, the time will go quickly, the higher earning potential is a major plus, and besides you were already planning on a few years of newlywed bliss before having kids, so you will have the benefit of Girl Ninja's income to help cushion the blow. Being a teacher, it is likely she will be able to find a job wherever you may move.

    As the wife of a pilot, I will face the issue of a drop in income combined with a move when my husband switches from a regional airline to one of the "majors", but I knew that coming in to the marriage. So I know exactly what girl ninja will face if you end up taking the dream job. Her opinion is one of the most important deciding factors in your decision. Just keep talking with her as you obviously already do and I'm sure you guys will make the best decision for the two of you.

  8. Would you not be able to get "save pay" for two years? Are you at the top of the GS-11? If not, can't the make your step close to equivilant?

    • Save pay is not a guarantee across different agencies. I will ask that they bring me on as a GS-7 step 10, but they have no obligation to HAVE TO do it. I've heard stories from people that say their salary was matched, and others that said they wouldn't budge.

  9. I think you never really know if it is your "dream job" until you're there. There are always going to be co-workers you may or may not gel with, your duties could change, and, who knows, maybe you'll hate it once you have to do it every day.

    I'm a risk-taker, so I would do it. But remember that someone else is calling the shots and telling you what to do, and your dream job could morph into something you don't even recognize.

  10. Sounds to me like you're applying for an 1811 job. If that's true, remember that you also get LEAP pay.
    The downside is it's killer hours since it's basically compulsory overtime.

    That being said, it's totally a dream job. I almost made it in a few years back but I failed a PT test at the last step since I was out of shape with the year and a half of waiting they put you through. I very often look back with regret that I didn't make it. I even toy with the idea of applying again. I say don't live with any regret, if that job is what you want, then make it work!

  11. You sound pretty happy at your current job. I hesitate to tell you to take the dream job because of all the other changes going on in your life.

    Right now you have the ability to work from home-can you do that with dream job?

    I agree with Sandy L-if you qualifed for the job once-you’ll qualify for it again.

    Happy Friday Ninja!
    .-= duddes02´s most recent blog ..Out looking for astronauts =-.

  12. It sounds to me that Marriage could not come at a better time. When you get married you do end up saving more money living together. Less date nights out and more date nights in together. You will be taking a pay cut, but you will also be increasing your household income to two. While both of you are working you can be working to get back up to that pay increase. When it comes time for the two of you to have kids hopefully you will be inching yourself closer to that $143,000 mark. Sure you might be at $70,000, but that is still a livable income. Everything might not happen as soon as you want it to, but in the end it sounds like a good plan.

  13. I'm a punk, so I probably would never take a pay cut, however, because your earning potential is larger, I think you have to do it! Think about your future family and expenses. Furthermore, the blow from the pay cut will be softened because of the 2nd income that Girl Ninja will be providing. Because Girl Ninja is pretty young (23 right?), I'm sure you could push off kids for another year or two while you bring your salary back up to its current level.

    But like I said, I'm a punk. Even though my line of thinking is a bit rational, I would totally stay with my current job. LOL…

  14. I say talk to Girl Ninja and see how the move potentially affects your "together" plans, rather than your "solo" plans. It seems the reduction in current income may be offset by GN's income, but there are also greater expenses that have to be parsed through. Given that you're hoping for a few years of bliss before GN becomes mom and you're down to one income, you may be back at the same income by that time. I can't make a call because I think it shouldn't be a sole decision under the circumstances. Best of luck!!

  15. Just based on what you said above, and your fiance's future plans. I would say take the new job now, while she's working and by the time it starts paying off for you, she'll be leaving the workforce to have kids.

  16. In the earlier post about your Dream Job, you mentioned the agency will place you wherever they need you and could potentially require you to move a couple different times throughout your career. This, in and of itself, is quite the deal breaker for me as I am imagining myself in your shoes. Considering your circumstances and life plans for the next 2-5 years (marriage, children, SAHM), I don't think your dream job is the right job for you anymore.

    On top of that, a 20k/year cut is huge. Sure it has a higher salary cap in the end, but your job right now will still allow you to grow and command you a higher salary elsewhere sooner… if you do eventually decide to look around when the time is right.

    IF I had to guess, I'd say you're sticking with your current job =]

  17. All I'll add is that, if you go for the dream job and it involves a temporary pay cut and potential re-location, I'd suggest:
    – continue renting for the time being
    – hold off on kids for a couple of years
    – have Bride Ninja try to find additional work to make up for the shortfall
    – don't stress about the Roth; at your age you've got lots of time
    – pay the loan off as best you can, but if it's a low interest rate, don't worry too much about it.

  18. I once took a paycut for a great opportunity. However, my paycut was much smaller since it was at the start of my career. I went from $45,000 down to $35,000. It took me two years to return to the higher income but after 4 years I had risen up to $65,000! For me, the opportunity was totally worth it. BUT, I hated the job I left so I wasn't really risking much there. I also knew that going in they would teach me alot and provide me with educational opportunities. It has greatly helped me in my career so far.

    Take the opportunity if you think it will be great.

  19. I took a pay cut (not as significant as what you're considering but a few thousand) for the job I currently have and have never regretted it. Like you, I knew the new position had greater earning potentials and hoped it would personally be more fulfilling. It was and continues to be.

    I've been at the "new" job now for 15 years. My advice is to go for it which I would guess is the way you're leaning. Why else go through all these hoops; not just to turn it down!

  20. Tough to say… $20,000 less is A LOT given you are only making 65K. A voluntary 32% paycut is not something to just throw away and accept.

    Can't you just ask them to start you at a higher level given your experience?

    I'm telling you now that it's going to feel bad being older, and making less. You might get very bitter looking at guys your age making 43% more than you (45K vs. 65K).

    If you want to work a long time, go for it.

  21. Honestly? Not right now, I couldn't do it. I don't make a whole lot right now (<35k) and am helping to support my partner as well. Only you can make the call for you though. But if it really is your DREAM job….weigh it up carefully.

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