by Adam Dawson
After getting forced out of my job in October 2013, I was extremely lucky to land an even better job in town at a company I had worked with before. This job even came with a pay upgrade so now I’m making about 20% more than I was at the job I lost. This company has been a blessing in every way. My manager is one of the best I’ve ever had. I am good at my job and the work environment and expectations are well suited for my style. I have been nominated for promotion in the upcoming review cycle, which should add another 5-7% to my paycheck. Additionally, my new company has a generous stock compensation program that provides a nice boost each year – I am transferring my stock compensation shares into index funds and putting this money straight into savings for retirement – not touching any of it.
When I started this job, I told myself I’d stay here for 5-7 years, since my last two jobs were a total of 3 years. Working in the high technology industry, there is always the feeling of a vortex or a vacuum sucking people in to Silicon Valley / SF Bay Area from all across the country. I said I would never move there because the culture was so different and the cost of living is ridiculous. I was satisfied to work for a technology company with Bay Area perks while enjoying the many benefits of living in Texas. Workers in my industry are contacted by recruiters fairly regularly, and I have become quite adept at thanking them for their interest but politely declining their opportunities to leave Austin.
But in January this year, I was contacted out of the blue by a recruiter from a prestigious Silicon Valley tech company that is highly regarded as a great place to work, with excellent pay and benefits, and a highly selective hiring process. I told the recruiter that although I was happy where I was, I would be willing to listen to what they had to say. (Although you might have some guesses at this company, I humbly request that you don’t mention the name here so that the search engines don’t make an association that might identify me).
At each stage of the recruiting/interview process, I was convinced a had made enough mistakes to end my candidacy. But after 3 rounds of interviews, they made me an offer! Even though it is an awesome opportunity, it was a very difficult decision since we are currently in such a good spot from a job/life/finances perspective. But eventually I was convinced by their offer and I will be joining them this summer. The Bay Area vortex finally sucked me in and we will be moving soon. Even though taxes and cost of living in the area are much, much higher than in Texas, a million revisions of a spreadsheet I put together show that this move will ultimately help us get to our goals (debt free and retirement savings) about 2 years faster than staying at my current company would. This is why it has been so important for Emily and me to have clarified our life goals and vision for the future in recent months. This job decision did not come down to a decision on Bay Area vs. Austin, or because of some career goal I have in the technology industry. It became crystal clear that this move would help me build some skills, as well as the financial foundation, to do more fulfilling and impactful work in the future.
This job news actually changes a few things I said in the two previous posts (a bit misleading, I admit, sorry about that). Even with a decent raise, due to the effect of taxes, the new job will not be very much different in take-home pay. But, it will be much, much better in retirement contributions and stock compensation. Our costs of living will skyrocket and our standard of living will almost certainly decrease in the near term. I expect that we will have to put the brakes on the student loan payoff for a year or so, which is very disappointing. (Essentially, a lot of the extra money we are paying toward that last loan will now become rent money). But the net result will actually be a much higher savings rate and acceleration of our plan. A good tradeoff in my book.
The company offered a signing bonus and relocation assistance, as well as up to 3 months of corporate housing while we find a place to live. So even though costs will be going up, I am hopeful we can spend the next few months hoarding cash and come out with a big boost to the savings account by the end of the year that we could then use to finally knock out the student loan, or maybe look at a down payment on a house in California (yikes). There is some money coming in, but I am holding on to it like an old scrooge until we get through the transition and see where we stand.
By the way, we are planning at the moment to rent out our current house, which will hopefully net us about $800 in additional cashflow per month (which we will plan to save for maintenance purposes).
It was a tough decision but the opportunity ahead is very exciting and should work out profitably for our family. Wish us luck as we transition!