Not long ago, I read a post on my buddy sam’s blog about his expriences in the start up scene in the bay area. Specifically, Sam was talking about his role in personal capital (which is pretty cool) and his compensation package. To make a good (and long-ish) story short, they offered Sam 3 options and they were:
- Paid on all cash, no equity options
- Paid 50% in cash, 50% in options
- 100% options
I remember reading this post and thinking, holy shit. I’d probably go for Option #2, because I’d need a bit of cash to sustain my lifestyle for now (more on this later) and I dont think I’d ever be able to justify choosing one or the other. However, since Sam currently has more than enough to live off his investment income, he decided to grab life by the horns and take option #3. I sat there thinking wow, homeboy has some brass – that’s a ballsy choice. I know that Sam is in a far different position than I am (He does not have a kid, he has passive income to sustain his lifestyle) but I still think that’s a pretty ballsy choice, people who gamble would make that kind of choice. Little did I know that a few months later I would be faced with a similar decision.
A New Opportunity
When I started this site, I was doing something that I totally did not like that cost me a lot of money. I was driving 100+ miles per day to work, and it needed to stop. I liked my job and I really liked my coworkers, but I was just tired of driving all the time. Since I was driving a lot and in super pay off debt mode, I was working two jobs and spending most of my time driving my truck or working. This was not a fun time for me but highly effective – I was able to pay off lots of debt because I was making big sacrifices. After a while of this I switched jobs to a job in town and began walking to work. I’ve worked there for a while but after year two I could start to feel my skills atrophy. I was not learning much and I didn’t really feel like I was getting much accomplished overall. Couple that with the fact that a lot of things that I did suggest got shot down (until the last day) I just felt like it was time for me to leave. I was also starting to see a surge in my online income. I just started feeling like switching jobs was a when, rather than an if – and the if was just if my new employer was going to be me, or another firm. (I also thought that things were only going to get worse at my current job instead of better – mainly because of changes in compensation)
So, I had applied for a few jobs and started getting some calls. One firm was particularly interesting but when they made me an offer, I was semi shocked – it was low. Even though I had not gotten a raise in the 3 years I’d been working my job (I did get a 1 time “retention bonus,” which was offset by getting furloughed), it was still a significant haircut – almost 10%. However, they didn’t offer me just cash – there were also some significant benefits that came with the position, such as very high retirement contributions, opportunity for company ownership after 1 year, and more.
So I found myself in the same position as Sam. Should I keep the sure thing, or should I go with something that had what seemed to be a huge upside?
The upside would provide a great vehicle to help me and H reach our newest set of financial goals, since becoming debt free except the mortgage is almost a sure thing at this point.
So What Did I Do?
As you probably can already tell, I went for the new gig. It was a really tough choice, but every time that I got off the phone with these guys I wanted to say no because of the numbers, but something just kept telling me that I would regret it. So I sat down, I really dove into their benefits and by my calculations, I should be ahead in earnings by sometime in March, 2016 as compared to a similar spot with my old job. I didnt NPV my pension since that’s nothing more than a promise, but I still think this is going to be a better fit. The only thing is I’m much busier now and I dont have as much time to work on my side hustles while on the job.
One thing to note though is that I really like spending time with my daughter, and this could have just pushed me to focus more on my side business than anything. After a long trial period and a huge outlay, I’m starting to see some money from my portfolio of niche sites, and let me tell you what. Passive income is addicting as shit. I can be tooling around all day and still earn $20? Yes please (it’s even still fun when you earn 13 cents while doing nothing, like I did this past week).
Now of course, I have to go and spend a bunch of time wrapping everything up, getting my old retirement accounts moved and doing “administrative” things like that. Hassle, but worth it.
There will be more about my new job (including the insurance fun times) soon, but for now, readers – how do you handle potential for upside in your life?