Rough Seas Ahead

Let me just say, today has been interesting.

So has the past month, for that matter. See, I’m currently a contractor and it was recently made very clear to me that I either join up as an employee or start looking for work elsewhere.

Of course, it was put in much nicer terms. I don’t work with monsters, after all. They value me as a team member and want to keep me on board. Had that not been the case, I suspect I would have been cut out a lot sooner. Luckily, I’m somewhat of a workaholic and the kind of work I do is in high demand for the time being. The only problem, dear friends, is that going from contract to salary is … tough. Rarely do you get the chance to do a straight contract-rate to salary conversion. In my experience, there’s always a cut. Always a price to pay for being a permanent member of the team with raises and the like.

So how much of a cut? Well, in my case, it’s about 38%. You might be familiar with that amount as most of what I save every month.

Yeah.

So I’m dealing with that at present.

Plus, I have another offer on the table that would mean commuting about 50 miles each way, but it’s for $15,000 more. I’ve done the math a number of different ways and even with tax deductions, traveling that distance would quickly beat that $15k bump into submission. In other words — it would work out to be about the same because I would spend a lot more on automobile-related expenses. Plus, there’s that whole opportunity cost of being in traffic for 2-4 hours every day. Yeah, the more I talk about that offer, the less desirable it sounds.

There are more perks to keeping the job I have now, of course. For example, I get to work from home every single day, which means I get to see my family. Every day. On top of that, I’ve been meaning to start a business for a long time and just haven’t gotten going. Keeping this job would mean there would be a certain … urgency … to that pursuit that wasn’t there before. I’d like to work that in my favor. There are parts of my brain sorting out the details right now (time to get some excellent sleep), but I now have an obvious challenge placed before me: earn the difference with a side business or bust.

It’s strange what times like these will do to your confidence and extremely important to reflect in order to turn emergencies like these into opportunities.

I mean, I’m not out of a job. By the time this change goes into effect, I will have fully funded my Emergency Fund and started investing. Things aren’t that bad. I’m just really bummed that I won’t get that big monthly infusion into my various retirement-focused accounts. The story I want this blog to reflect is that of someone who learned the error of their consumer ways a bit later, but not too late. Someone who faced successes despite bumps, setbacks and rough seas. Someone who doesn’t lie and pretend things are always happy.

I honestly hope that’s what you all take away from this.

For now, I’ve got a lot of thinking to do. A lot of talking to do with my wife. We have to make sure our expenses will be covered. Maybe this is the catalyst we needed to down-size the home (and mortgage payments with it) in an effort to live more simply.

Of course, I’ll keep you posted on where this takes me.

Wish me luck!

4 Responses

    1. Adam,

      Thank you. I appreciate that.

      I’d still like to figure out how DGI works exactly, particularly over the long run with some bigger numbers — say $400 – 500k invested after 10 years. I’m sure it would depend on averages.

      If the goal is, say, $60,000/year, I just wonder what kind of money it would take to hit that and then maintain it using DGI.

      FM

  1. FM,

    I hear ya on the DGI front. The simple calc is to take your $60,000/ dividend pay rate = needed amount. However you have to take into account how much the dividend growth rate will be of each stock which would lower the needed amount.

    I am still learning about it as well but so far I like what I see since i am generally risk averse.

    Look forward to seeing what you decide!

    -Adam
    Adam – IWTRS recently posted…Using Your 401k or IRA to Fund Early RetirementMy Profile

    1. Adam,

      I too am becoming more risk averse with each passing moment as I prepare to have a reduced income for a while. The fact that so many people are doing well with DGI makes me want to give it a shot, but I’m also aware that we are potentially in a calm before the next storm. That makes me want to stick to my plan, at least for now.

      I will definitely keep my finger on the pulse of the DGI community. I’ve got your blog, Dividend Mantra and a few others that will be the examples I’ll be watching. I’m very interested to see how you and others react during downs, as well as ups. Also, I’m interested to see how I, myself, react during those same periods.

      For now, I can only speculate.

      FM

Leave a Reply

CommentLuv badge