I’ve made it known in my writings on the blog and on my twitter feed that I am miserable at my current place of employment. Leadership and culture changes that are toxic, divisive, and distrustful have been so bad for my mental health I had to start seeing a therapist a few years ago to deal with the anxiety I was having about going to work. I was getting short of breath, my heart would race and I would ruminate on how bad the day was going to be. I knew this was no way to live but felt like I had no other options. I made an incredible salary and we needed me to continue to make it.
I’ve also written about my realization that decreasing our spending and better utilizing our money would create an environment where I don’t have to work full time. My journey to financial independence, while short, has been helpful in dealing with the stress at work as I feel a stronger sense of purpose now. Basically, my goal to achieve financial independence in seven years meant I only have to deal with the bullshit at work for seven more years! Then I could tell them all to “eff off” and go my happy way.
This was the plan at least, until I received a phone call from a friend of mine who manages a small outpatient surgery center in town. She had a new facility opening and had a need for a 1099 independent contractor position and wondered if I would be interested…the position would be guaranteed for only two days a week and came with zero benefits.
My first thought, was “not possible” thinking we couldn’t afford for me to only work two days a week. My husband and I took a long hard look at our finances. We realized that if I could supplement the 1099 job by working a few days a month with my current employer, that we could financially afford for me to quit my current full time salary job. It seems that the months of tracking our spending and decreasing some of our expenses was the main reason this opportunity was now an option for me.
The positives of taking this job are:
- Freedom from my current employer on a daily basis!!! I would only need to see them a few times a month to supplement my income.
- Better working environment
- More time at home, allowing me to catch up on chores so our weekends can be filled with fun
- Ability to volunteer at my daughters school and spend more time with her
- Freedom to decide when I want to work outside of the two days I would be guaranteed at the surgery center.
The negatives of taking the job are:
- Lower income
- Delayed journey to financial independence
- Becoming a 1099 employee instead of a W2 employee (I’ve never been a 1099 independent contractor before and the tax implications are complicated)
- No matching 401k contribution
- No benefits of any kind (vacation or sick time, disability insurance, malpractice insurance)
It was a really big decision! There would be some initial upfront expenses and I would need to procure my own malpractice and disability insurance. Additionally I would need to meet with an accountant to understand the tax implications of being an independent contractor. But the freedom that I would have was hard to ignore and I truly believed our lives would be better because I would be less stressed and happier. Per my husband, I’ve been bringing the stress of my current job home with me for years.
But if I could just tough it out at my current job, I could reach financial independence and work on my own terms anyway and the decreased income wouldn’t be such a big deal. I would be risking the growth of my 401k because I won’t be making bimonthly contributions from my paycheck anymore and our mortgage isn’t getting paid off in seven years if I change jobs either. Ultimately, It came down to deciding if I want to reach financial independence in seven years as I had planned or do I want to be happy now?
What did I decide?
If I were in my early 30’s my decision would be to stay and tough it out. But as someone who is over 40, feeling the pinch of midlife, with a small child who I see less of than I would like, I decided that my happiness now was more important than financial independence. This job change allows me to be more available to my child as she starts kindergarten. I will get to be a bigger part of her childhood and that mattered much more to me than the security of money.
So I spent the months of November and December getting credentialed at a few other facilities in town, giving me more options to pick up work to supplement my income. I met with an accountant who advised me on how to make quarterly tax payments and how to estimate what those should be. We also discussed the tax write offs I would now be able to take as an independent contractor. Most importantly, I turned in my notice to my current employer! Sadly, I couldn’t tell them to “eff off” as I still need to work there a few days a month.
I secured malpractice insurance fairly easily and thought I was good to go with a new long term disability policy but was unfortunately denied coverage due to seeing a therapist for work related anxiety. Sadly, it’s now become a red flag to see a mental health professional for anxiety when it comes to long term disability insurance. What is shocking to me is that I’m a “red flag“ even though I’m on no medication for anxiety. Just the fact that I’ve been treated for it in my past is enough for some companies to deny me a policy.
It’s no wonder people don’t seek help for anxiety and depression. I’m currently trying to find other providers who are willing to insure me but its proving to be more difficult and expensive than I thought. But it’s important to me, especially now, and I want my family to be financially secure if something happens to me and I can’t work. So far, this has been the only “issue” with changing jobs that has made me second guess my decision.
This job change has led to many other changes that we will have to get used to as a family. I didn’t get vacation pay when we went to Disney World this month for our big family vacation. In fact, anytime I chose to not work so that we can travel, I won’t get paid for it. I don’t get sick time anymore either.
Because I am a 1099 independent contractor, taxes no longer get withheld from my pay. So, we have to be more conscious about setting money aside for taxes now, and those taxes will have to be paid quarterly instead of yearly. I will also need to open a SEP IRA (Simplified Employee Pension, Individual Retirement Account) so I can still make retirement account contributions. I am told the biggest benefit is that I may contribute more to my retirement via a SEP IRA and that will, in fact decrease our taxable income, thus lowering our taxes. All of this means I will need to be diligent about tracking our money.
Is My Journey to FI over?
Though my journey to financial independence has been short it’s been pivotal in preparing me for this. I don’t have to start tracking our money because I’ve been doing that already. And honestly, had I not been tracking our spending, I don’t think my husband and I could have made the same decision. We wouldn’t have had all the data to guide us.
My journey to financial independence is delayed, for how long, I have no idea. Until I can get several months of earnings as an independent contractor documented I won’t have the data to know. But my journey isn’t over…it really is still only beginning. I have the potential to hustle and still make plenty of money. Thanks to my “No Spend Year” that started on January 1, we will be able to save a larger percentage of our money than we did last year. So even though it may be less money, it will be better utilized.
Life is short…
You don’t know how much time you’re going to get in this one precious life. The thought occurred to me that I could bust my butt for the next seven years to achieve financial independence and then become really sick due to the stress I placed on myself. All we have is now.
I’ve been given the gift of time with this new job. I will get more time with my child, more time at home, and more time away from a toxic work environment. I will happily trade money for more time. Wasn’t that the point of this anyway? Financial Independence is a tool that can give you the freedom you need to explore passions, spend time with family, and leave a rat race where you feel unappreciated. What’s the point of it if once it’s achieved you are so mentally beaten down that you can’t appreciate it, or that you children are grown and there’s no one to spend your newly acquired free time with?
Please wish me luck as I start this new adventure. Wouldn’t it be super cool if I was still able to achieve financial independence in seven years anyway? Stay tuned…