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Billy is a 37-year-old husband and father who decided to give up his six-figure salary job when he was 34 to move to a small town and take a position that paid half as well. He says it was one of the best decisions he’s ever made. I asked him to explain why.
Mike: Billy, you got in touch with me by telling me that you had a lot of good stuff going for you before you decided to give some of it up. Let’s start from the beginning.
Billy: Sure. So three years ago I was 34 and was working as a federal civil servant doing public affairs work, which is the government way of saying public relations. I had worked in media and PR before working for the feds for about seven years. In that seven-year time, I rose pretty quickly and became a GS-14, which in the D.C. area (where I was located) makes about $110,000 per year, plus benefits. I actually got a job offer to be a director of communications at another government agency, which would have paid $120,000 to start. I was working at a government agency that is consistently voted one of the best to work for. Instead of taking the job offer, I quit and moved to small southern college town to make $60,000 a year.
Mike: You also had no debt, right? And you had begun saving for your kids’ college education?
Billy: Yeah, that’s right. I had my student loan debt paid off at that point, which was key. I got really quite lucky. My father was a minister in a particular denomination that founded the university I went to, so I didn’t have to pay tuition. I borrowed a little for living expenses, but $16,000 is pretty much nothing as those things go. I chose to go to a public HBCU [which stands for Historically Black College and Universities] near my home at night for grad school, which was super cheap.
Mike: And you were married and had kids?
Billy: Yup, two kids. My wife wasn’t working at the time, so I was the sole paycheck. We had started putting money away for their college at that point. We made the decision to leave D.C. for a simple reason: It felt like a trap. Our household income was high, like 75th percentile high, but in that area, you feel about average. Our housing was pretty affordable by D.C. standards, but the schools where we lived weren’t great, so private school was looking like a real possibility. I paid about $140 month just in parking fees at my office. Commuting 12 miles took between 60 to 90 minutes each day. A great day for me meant I saw my kids before I left work and they were still awake when I got home. And after driving 90 minutes, you just hate humanity so much. So, about 12 to 14 hours of any given day was working or commuting. There was just no quality of life.
Mike: Can you break down some of your living costs for me? Mortgage, car payments, groceries?
Billy: Sure. So our mortgage on a three-bedroom house in a semi-sketchy area was $1,800. A bargain. Car expenses (I always pay cash for cars, I don’t mind driving a beater) ran about $400 a month as insurance was crazy. Groceries would run about $280 to $300 a week. I type that now and it seems astonishing, but it wasn’t back then. We just ate differently. When you work that much, you shop at places like Whole Foods and Costco (which is just lux stuff in bulk, really). There was this odd grocery arms race in D.C. in the 15 years I lived there. It used to be Safeway and Giant, two average groceries stores, then the high-end retailers moved in and we all started shopping there. I am not an über-consumer, but I got sucked in as well. When you have the money, spending that kind of cash on groceries seems normal, and everyone else is doing it. And you’re so busy, you get the prepared stuff from the hot bar, and pretty soon you’re dropping $20 a night on dinner. But beyond that, there was various insurance fees, dry cleaning, a house cleaner, yard service (because who had time for that?), and psychotherapy to adjust to it. All told, it was like there was a $1,000 a month surcharge to live there.
Mike: Were you able to save?
Billy: Yes, we were, primarily because of the mortgage and the cheap car thing. We were putting away a goodly amount, especially when we had two incomes. Our indulgence was travel, but you can sort of discretely budget for that. By the time I left I had about $150K saved for retirement, not including pension, and almost eight months of salary in the bank. Part of that saving came from selling a condo we bought just before real estate got ridiculous. My parents never owned their own home; the same for my wife. We got married really young—straight out of undergrad—and we owned our own home before I was 23. We did that on our own; no help from anyone. Of course, the banks would lend to anybody with zero down and housing was still cheap if you knew where to look. Anyway, we sold that place after renting it out for a year after we bought our house, and just banked the proceeds.
My entire financial life has been an exercise in fortuitous timing. I was born in the mid-1970s, the lowest birthrates on record. I graduated in the ’90s boom, when they needed workers everywhere—just when there was a dearth of us coming out. We bought real estate just before the boom. I got into the federal government just before the boomers started retiring, so opportunities opened up. There were some good decisions on my part, but really, so much of it was just luck and timing. If I had been born four or five years later, things would be different.
Mike: It’s interesting to hear you say that, because a lot of times, people just say success can be made simply by making smart (financial) decisions. But: There is some luck involved. The kids who graduated into the recession are pretty unlucky.
Billy: Yes! It really irks me when I hear people, especially boomers, knock the millennials. If you’re under 30 and think you got a raw deal, you’re right.
Mike: So tell me about how you got to the point where you and your family decided it was time for a change.
Billy: Sure, so like I said, I had a great job and I was deeply miserable. There was pretty much zero space in my life for anything except driving to work, being at work, traveling for work and then trying to recover. There was a time in my 20s when I loved that. Then I had kids and it all changed. What was the point of working that much? There were boomers retiring left and right (with pensions, this being government), people who had given a life to that grind. We’d sign a card, eat cake, send them on their way. The next day it was like they’d never been there. What was the point of all of their work and sacrifice?
I don’t want to sound nihilist. Everyone needs to work and contribute and these people did that, but how much of yourself are you going to put out and for what in return? It really hit me when I was traveling with one of our directors to Congress for her to give testimony—testimony I had written. I sat behind her and handed her little index cards with guidance as she was asked questions. A couple of years before, that sort of thing made me feel like a big shot. Really important. But that day, I was really excited that the hearing got out at 4:30 p.m., and that I was only a few miles from home, so I could just bag it and be home before my kids were in cranky-mode. And then I knew I had to get out. It just wasn’t worth it.
Mike: What was the discussion like when you talked about it with your wife? How did you two decide what you were going to do next?
Billy: Well, it was interesting. We had talked about it for a while. She was completely on board, but wanted to make sure it was the right move—that we were going to be somewhere new that was a good place for us to be, and that we weren’t changing for the sake of change. She’s a psychotherapist, so I should add that she has some pretty good insights into what makes people make big decisions. So she wanted to be somewhere we could actually have a better quality of life, and that she could go back to work in a meaningful way.
She’s an ascetic in every sense. She’s about the least material person I know. She said she didn’t want us to get to the point where we fought over money, but that she didn’t really care how much I made. She’s awesome like that.
So a job came up in a small town where many of her extended family live. It seemed right. I applied and interviewed. You will swear I am making this up, but on the drive back home after interviewing, a rainbow appeared over the interstate. This was meant to be. And then I got the job offered to me … and then they told me the salary. For two weeks I felt really conflicted. Could we live off $60,000 a year? Turns out, yeah, you can. Of course you can. That’s more than the median income in the U.S., and it’s a low-cost area. I was able to let go of the ego bit of having a six-figure salary. There were other factors, but when I really thought about it, that’s what it was about.
Mike: So you essentially cut your salary in half, but you were going to be cutting your living expenses too, right?
Billy: Exactly. Housing was less. We bought a nice house here in town, walking distance to work, and held on to our place back in the D.C. area to rent it out, which we break even on. Groceries are now about $125 a week, and we eat well. My car insurance is 30 percent what it was. The preschool we sent our oldest to and that our youngest is in now cost about 60 percent less and is wonderful. The public schools my oldest goes to is great. And there isn’t this consumption arms race here. It’s a college town. There is wealth here, but it’s not cool to flash it. There’s a ton of interesting stuff to do that doesn’t cost anything. We’re also in the middle of nowhere geographically. There is real rural poverty, the stuff you see in documentaries, all around us, so when you’re making $60,000, you feel fortunate. Because you are.
I also spend less on restaurants, gadgets, etc. Before, when I was making more but was miserable, I felt like I was owed that stuff. Why am I working so hard? Now, I don’t feel so entitled. There’s just other stuff to do. We ditched cable TV, no cleaning lady, I cut the grass now, but there’s time in life to do that stuff. We also rent out a fourth bedroom to a colleague I work with to cover costs. It’s a big help.
Mike: And your wife was able to start working again?
Billy: Yes. Although she makes considerably less. In D.C., people get wound a little too tight (myself included) and it’s common to see a therapist to help you cope. It’s also common to just pay that out of pocket. There are people who are really hurting here as well, but they use their insurance to pay for therapy, which reimburses my wife at a much lower rate.
We got to the point where we just lived off my salary for a year and half and then she went back to work part-time, so the plan is to use that money to continue saving for the kids college, retirement, etc. As she works more, that will hopefully grow. We are very fortunate in that we have family here who take care of the kids for free. Child care is the killer expense for a lot of people, and it’s not for us. Add that to the lucky list.
But, I’ve actually been contemplating make another big move. I’d like actually transition out of my current job and into a slightly different career. That is a little nerve-wracking.
Mike: So talk a little bit about that. You were on a pretty straight and narrow career trajectory and were moving up pretty steadily when you worked for the government. When you took a new job, where did you think your career would go?
Billy: Not to meander too much with the thoughts here, but being here I see the value in social capital. If you have family to help you out, that’s huge. I knew it would go just about where I am now. That was something I was prepared to face, the big trade-off for the less stressful life. So now I work on a nation-wide project that’s centered at my university. It’s a good job, but I just have a master’s degree, so in an academic setting, there’s a ceiling to what I can do, and I came into my position at that ceiling. There are faculty members here who are trying to create startups based on their research. I’ve spent my career working in communications around science, engineering and health, so since I’ve arrived, I’ve been helping guys I meet (all men, so I can say guys) figure out how to frame what they do, who they need to get in front of, etc. I never saw it as a career thing, but as part of the social capital—it’s a small town, you help people, it comes back to you. But one guy I was working with got VC funding pretty quickly after we collaborated, and they brought me on as a consultant for a few months. It wasn’t a ton of money, but it was really fun. I didn’t realize how much I’d like not working in a big organization. It got me thinking I could do this sort of consulting on my own. So I’m on a two-year plan to do that. It’s both exciting and completely terrifying.
Mike: So jumping into the life of being self-employed, essentially? Or would you like to find a full-time position at a startup?
Billy: Self-employed. I am in a university town, I live three hours from three big university areas. I have good contacts in the science funding agencies of our government and experience doing this sort of thing. It seems possible. Then again, so does cold fusion. What I’d really like to do is figure out a way to leverage the talents of people I’ve met here. I used to think talented people went to the big city. (Pick a city.) Now, here, I see really capable writers, designers, etc. People who choose to live here for a variety of reasons who’d be very competitive in any environment. We’ll all accept less money as a trade-off, so we have a comparative cost advantage. Domestic outsourcing of creative industries, if you will. Since we’ve discussed the differences in generations, I’d say that’s a big difference now. Before the internet, you had to be in a concentration of industries. Now you don’t, neccessarily.
Mike: But it’s exciting right? And you’re in a financially good place to try something like this?
Billy: Exactly. Really exciting, and if I can’t do this now, I really never could. It occurred to me a couple of weeks ago that I could fail. It would really suck, but honestly, the worst case scenario wouldn’t be that bad. My wife is working more. We have a great support network here. I’d find some other way to support my family. Might not pay as much, but we’d adjust, just like we did before. Being in a large metro area, seeing people making huge amounts of money and consuming in a conspicuous way, it gets in your head that you have to do that, too. Being in a small town, you’re amongst survivors, people who’s families endured in place for a long time. Seriously, what’s the worst that could happen? Obamacare factors into this somewhat. It’s nice to know benefits are there.
[Note: A spoiler from Mad Men season six appears in the next paragraph.]
I guess I would have to say that I am just really, really lucky. I made some good decisions, but timing was crucial. I was watching the latest season of Mad Men, and Ted tells Peggy that he’s not going to be with her, that it’s a difficult decision. She tells him, best line of the season: “Well, aren’t you lucky? To have choices.” Yes. Yes, I am. I know that. My parents were horrible with money, had no flexibility, no net worth. Yet here I am. I have choices.
Mike: Is there anything we didn’t talk about that you wanted to mention?
Billy: Just that lest anyone think it’s all roses, there are some sacrifices, the primary one being that for the first time, I think about money. I used to just go to the ATM every week, take out $120, and somehow that pocket lucre would just disappear. I can’t do that anymore. I used to go shopping, and while I never went crazy, I didn’t really think about how much I was spending. I do now, constantly. I am on a budget. And I do sometimes worry that, despite having a good retirement nest egg, pension points, etc., that I gave up a comfortable retirement, or that my kids will really, really want to go to an expensive college, and I’ll have to tell them I can’t afford it. But, as a friend here put it, thinking like that is like trying to predict who’s going to win the best picture Oscar two years from now. You just can’t know. Too many variables. Don’t be so wrapped up in the future that you’re miserable now. If any of your readers figure out how to do that, let me know. :)
Mike: I think this is a very reasonable way to think about things!
Billy: Indeed. If only the human mind was always reasonable.
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