Racine Journal Times

March 2005

Knowing When the Job is a Bad Investment

Paycheck Offers One Strategy for Life Balance

Michael P. Haubrich, CFP

 

You might remember that Johnny Paycheck song that goes “…take this job and shove it.  I ain’t working here no more.”  That’s certainly one approach to ensuring that you establish work/family balance.  In fact, I recently advised a client to exercise that alternative.  We even rehearsed the words she could use with her employer, but admittedly they were a little less blunt and a tad bit more diplomatic than Paycheck’s version.

 

Wait a minute…isn’t a financial advisor supposed to help you make money, not give it up?  Aren’t we supposed to help our clients devise a plan to meet their long-term objectives? Yes and yes, so why would I even suggest people give up their jobs and the income that comes from a steady paycheck?  Because, in some cases it just isn’t worth it. 

 

A bad job is a bad investment.  As a financial advisor who provides counsel on investment portfolios, if there’s a non-performing asset, we have to re-balance that portfolio.  Well, when looking at the “return on life,” if your job is a non-performer dragging down the rest of the assets in your “life portfolio,” such as relationships and health, then we need to make some changes in that portfolio too.  Failing to do so could jeopardize other life goals.

 

When a woman in her fifties first came to see me a year ago, she wanted to focus on retirement planning.  I always begin such interviews by exploring the timeframe we’re dealing with and the reasons why retirement is being considered. In the case of my client, I learned she wanted to retire for a couple very practical reasons: she didn’t like her job, she spent too much time commuting, was under too much stress, and work/life balance was not something her multi-national company fully embraced. 

 

As a matter of routine, I give my clients interested in retirement planning the book The New Retirementality by Mitch Anthony.  After discussing the “retire-myths” Anthony outlines in the book, we explore alternatives and options.  Again, in the case of my client last year we looked at restructuring her finances so she was not as dependent on the high level of income that comes with an extremely stressful job. We developed a transition plan to some other kind of employment in a few years.  In the end, she decided that she was willing to stick it out until that time.

 

The job continued to deteriorate over the next six months.  My client came to realize that no amount of money made from her job could compensate her for her out of whack life balance.   She had other alternatives.  That alternative is to experience a year or two on sabbatical to renew, recover, and re-energize. 

 

“I’d give the shirt right off my back if I had the guts to say…” the Paycheck of a different sort suggests.  I find people are more constrained by their fears when making this kind of decision, than by their finances.  The key is to visualize the worst thing that can happen and accept that as a possible outcome.  Once you do that, you can develop the steps to handle that situation.  Facing that fear empowers you to no longer feel you are trapped in a job or in any situation that does not support your life planning goals. 

 

Besides restructuring your view of fear, you also need to restructure your financial obligations.  Do you really need the biggest house that your current income can support?  Do you need a new car every two years?  It isn’t about things or numbers; it’s about quality of life.  The key is to make sure you have skills that will be needed elsewhere and that you are flexible and willing to embrace change.  And, get some advice.  Most wouldn’t buy or sell their house without the help of a real estate agent, so why go alone into this deal – changing or leaving jobs, which like a housing change, could involve hundreds of thousands of dollars over your working years.

 

This isn’t just an issue for those near retirement.  Recently, we went through the same exercise with a woman in her thirties.  This is an issue for all of us.  As Anthony asks in his book, “How Much is Your Paycheck Costing You?