Or not. Is that the question?
This month has been somewhat trying work-wise. I haven’t had much time to think, but in the limited time I have had I’ve been mentally exploring some options. Today’s post is going to list them and hopefully the act of writing them out and getting some feedback from the RetireJapan community will help with the decisionmaking process.
The post should also illustrate some ways to think about money and plan for the future.
WHAT IS
Right now I work at a university. My job is tenure track, and I am applying for tenure this year. If I get it the position is pretty close to bulletproof: I will continue to receive my decent salary and benefits until I retire in twenty-some years time. The work is pleasant, allows a lot of flexibility, and is not particularly tough or stressful. The salary is enough for my wife and I to live on but is set by the university pay scale and will not increase meaningfully in the future regardless of what I do.
My wife owns and runs a small language school. She employs about ten people, including two full-time teachers. I help out at the school in an advisory capacity (with permission from my employer). Running a school is tough and my wife works long hours and deals with a lot of stressful situations. I try to help as much as I can but am somewhat constrained by my main job. Currently the profits from the school are between 1.5 and 2 times my university salary.
We have very little free time, both day to day and on an annual basis. It is difficult for us to take time off and we don’t have enough time as we would like to spend with family or on ourselves. We’ve been working flat out for fifteen years now and feel like maybe it’s time to cut back and restore the work-life balance somewhat.
We have about 15 years’ worth of living expenses in savings and investments. I will receive a retirement bonus (around 2m yen if I left this year, 20m if I continue at the university until retirement). My wife could sell the school (it’s worth what someone would pay for it, but probably at least 15m yen right now). We should both receive a Japanese state pension (kosei nenkin for me and kokumin nenkin for my wife). I should also receive a UK state pension. We will probably delay receiving the state pensions in order to take advantage of the increases in that case.
WHAT MIGHT BE
I figure we have five options, from extremely conservative to somewhat adventurous.
Option 1 is the status quo. Continue working at university and running the school to take advantage and save/invest more money. The school could become more profitable, potentially accelerating this process.
Pro: more money, safer. Con: stress, no extra free time.
Option 2 is conservative. Stay at the university and scale back or close the school so it is less stressful.
Pro: more time, less stress. Con: less money.
Option 3 is entrepreneurial. Leave the university and double down on the school. We could probably expand the business and make it more profitable.
Pro: more money, interesting. Con: more stress, might not work.
Option 4 is a lifestyle choice. Leave the university and scale back the school so it pays our expenses. This could be done with just a couple of days a week.
Pro: more time, less stress. Con: less money, might not work.
Option 5 is a bit wild. Leave the university and close the school. Travel and spend time on our hobbies. Spend down our savings until we reach pension age.
Pro: freedom. Con: might run out of money. Overly dependent on state pensions.
Options 1-3 would allow us to leave our investments to grow over time, and possibly add to them. Option 4 would probably deplete them slowly. Option 5 would deplete them more quickly.
WHAT SAY YOU?
This post is basically like that thing where you flip a coin then decide to do what you wanted to do in the first place, ignoring the result of the coin flip if it contradicts your feelings.
What do you think we should do? Why? We probably won’t do it, but the more feedback we get the better a decision we will eventually come to.
One ideas would be a well trained school manager to reduce the pressure on your wife. After tax this might not be that expensive an option.
For yourself, I think option three is best in the medium term. The closer you get to FI the more the need for non-finanical goals and being an entrepreneur would allow for far more creativity. So get another three to five years of saving under your belt before taking life in another direction.
We are certainly looking at that option! Unfortunately our skillset is most definitely not in hiring/training/managing people…
I will certainly continue writing, consulting, and speaking regardless of which options we choose -it’s just too interesting 🙂
I was between options one and two, but I’d go with Jonny’s idea. If profits from the school are 1.5-2 times your uni salary, put half of that into hiring/paying a manager. This would keep the easy stability of your job, free your wife to relax a bit or grow the school, and when you choose to retire you could potentially sell the school to the manager or someone else.
“I am applying for tenure this year. If I get it the position is pretty close to bulletproof: I will continue to receive my decent salary and benefits until I retire in twenty-some years time. The work is pleasant, allows a lot of flexibility, and is not particularly tough or stressful. The salary is enough for my wife and I to live on but is set by the university pay scale and will not increase meaningfully in the future regardless of what I do.”
I suppose they could string you along for another year or few, but tenure/正社員 is the important fork in the decision tree.
If you get it, you’ll effectively have financial independence–stable income with a balloon at the end. Depending on the rank you start at, with a promotion or two, there may be slightly more salary increase than you’re expecting. And if you don’t get it, then the other options will have more immediacy.
I would almost definitely take the tenure position, as you can always drop it when ever you want, but the opportunity might not come around again. From what I can tell the benefits, pay / low stress / time off seem quite good. So I would take that, and as Johnny mentioned, hire someone for a managerial position at your wife’s school so you can still maintain income from it, but make it as passive as possible. So I would say a modified Option 1.
I would go the lifestyle business route
Where did you do the Bungie Jump? Looks nice!
I also vote for taking tenure if offered but I am risk adverse by nature.
Queenstown, NZ. All the details are here: http://sendaiben.org/2012/12/30/what-does-it-feel-like-to-do-a-bungee-jump/
Cut back or ditch the language school – unless your wife really loves the work. Been there, done that – and running a language school is much more stressful than even my rather stressful private university job. We are much closer to retirement age than you, but we are much happier since my husband sold off the school (not so profitable since there were debts from the aftermath of the Tohoku earthquake.) He takes care of me and two properties now – and we are much less stressed. Anyone who has not run a fair- sized language school has no idea of all the people problems. Hiring a manager is a heaven-for-a-short-time and probably a hellish situation unless you are very,very thick-skinned.
Ha, nice to hear from someone who knows the score!
We’re really conflicted about this. For my wife, it’s much more than a job as the relationships with many of the students and their families run deep.
I also enjoy contributing and seeing the students succeed (where else can you teach the same children for fifteen years?).
But the time required is unhealthy, and something horrible and stressful seems to happen just over once a year on average 😉
This is basically the dialogue that goes through my head every day!
Thanks for posting. Good to get different perspectives. Its so hard making decisions!
I dont have such a strong desire to do anything so the status quo wins each time.
Im jealous of those who have a dream and quit the 9-5 to pursue it.
You could do the more risky thing now ie quit and have a year off. Only with no other massive obligations will you be able to soar to places you never imagined. If it fails you know you could always go back to a full time job. But if you never try will you regret it?
What will Ben in ten years say when he looks back at the decision you made?
I dont see tenure as a reason to stay at all. Its no guarantee of a job. It just keeps ones fear under wraps. Nothing wrong with it but it may mean feeling trapped in a boring reality where we can predict the next decade or so of our lives.
I think Ben in ten years would be very disappointed 😉
The one problem is that both the school and the job would go away if I quit. I don’t think I would be hired again (I got the job with an MA, you need a PhD now) which basically takes out the ‘come back if you don’t like it’ option. It’s a one-way street.
Wednesday’s post will be a follow-up to this one. Otanoshimi!
Tim Ferris also talks about mini retirements before we officially retire.
Just adding another voice. As someone who counted on investments plus social security to work out, the latter failed us. Had we the option of a do-over, I’d opt to work harder. So, choice number one is my opinion.
Personally, as it is very difficult to get tenure, I would hire a manager, and scale back your involvement in the language school (however,this is really yourwife’s choice, isn’t it?), use the extra time to invest and leave aside some periods of time in which to travel. Also, you may be eligible for a sabbattical at your university and I’ve found the two I enjoyed to be absolutely transformative, professionally, and personally, and my wife and I were able to travel for two months together as well. As far as money goes, as many of the posts which you’ve curated on this site indicate, how much to you need is an important question everyone needs to ask themselves. The answer is connected to what you hope to achieve with your life and what you enjoy. In our case, we love travel, but are satisfied with fairly economical trips (at least in terms of inexpensive hotels and airbnb) and would like more time to write and read and enjoy the outdoors, hence our mutual decision to save and invest and retire at 62 for me and 51 for my wife —