Should I take a pay cut now to potentially earn more later?

[John Heasley]

Hello BP! Full disclaimer--I'm borrowing a friend's account as I'm discussing a job switch, and I don't want this information floating around the internet with my real name on it in the event that someone from my current company sees it. 

I have a dilemma on my hands. I have several years of accounting experience for a company that owns and manages commercial RE. In January, I took on a new role in my company doing leasing. I'm not satisfied with my current company anymore and would like to eventually become a real estate agent focusing solely on investors until I have enough assets to become a full-time landlord. I have 3 properties now, so that day is pretty far away. 

My mentor encouraged me to get a sales job so I could learn some entrepreneurial skills before taking that plunge. I have an opportunity to take a role as a recruiter for accounting and finance positions. It's a great blend of what I've done so far, and I'd have a base salary for the first year until I got up and running. However, the base salary is about $20k less than I make now. Naturally as a salesman, the hiring manager threw out a lot of big numbers when discussing what his top earners make, what he made in his first few years, and what I could be making in 2-3 years. I have the right skill set to work in sales, and I would be good at this job, but I can't help but hesitate at that low base that I'd have to live off of until I got going.

The timing sucks. My boyfriend is in nursing school on the GI bill and only working part-time. We have a house payment. I've got student loans and some CC debt, and I just about wiped out my savings to put a large down payment on a car earlier this month. My dad is in the middle of a quasi-divorce, and we're trying to buy a 4th property for him to move into this spring. But there's always going to be a reason why the timing isn't right.

Do I take the plunge and do sales? Do I look for another accounting job that pays more even though I hated the work so we can wipe out some debt before I make a job change? I'd appreciate any insight or guidance! 

[John Heasley]

Originally posted by @Jim K.:

Originally posted by @John Heasley:

@Jim K. I work 25 miles away from home; I don't think the cost of Ubering each day would be less than a car payment. I also would not encourage him to return to full-time work as his grades suffered terribly when he worked full-time and went to school full-time. He also has the army reserves. His plate is full enough.

I wouldn't need to go back to accounting as I make the same doing leasing as I was doing accounting. I could just keep doing what I do now, and I will consider that based on your advice. Thank you!

 John, I'm sorry my advice on the car was received the way it was, but you missed the point of what I wrote about that. Because I believe it's an important concept, both for you and anyone else reading this, I'm going to try again.

To summarize: In the age of Lyft, universal cell phone coverage, and the $87 tow-anywhere AAA membership, 90 of car-owning Americans have a car payment.

I didn't advise you to "Uber to work every day," as you summarized my point. What I meant was that in the event of a breakdown, getting a ride to work or to any critical meeting or other engagement is reliable and straightforward. The functional necessity of having a car that will start every single time you turn that key, guaranteed, which is the reason most people have always stated is why they drive almost new cars and pay their car payment, has been largely removed from our society. You could break down multiple times a month and still reliably get where you're going and still come out ahead on the money spent on rides and your car.

Ergo, there are only four reasons to continue driving a car worth more than, say, $5K, andshouldering the additional insurance costs involved. Some people, specifically salespeople, need to project an image of material success to make sales, and a car is part of that. The second reason is tha someone else is paying for the car and insurance. The third reason is unreasoning fear -- people are unreasonably terrified of the potential unreliability of used cars. But the last reason is probably the most common, simple misplaced wealth-devourng vanity.

As I mentioned, we also went through a period of throwing away money on cars. In our case it was mostly fear -- we hadn't developed a good relationship with a local mechanic and service shop. We didn't understand the AAA membership implications and we had never used the ride-share services. But I thankfully realized early that vanity had no place in our specific wealth-creation strategy and business plan, building a portfolio of low-income rentals in our city. We were lucky that way.

Anyway, good luck with whatever you do about your car. It makes no difference to me if you continue to shoot yourself in the foot over it. I obviously need to be clearer about presenting this point in the future.

I  see what you're saying now--you aren't against car ownership, just newer car ownership/auto loans. Thanks for clarifying. My last car was a 2013 Jeep Compass that I bought in 2015. I thought that thing was going to last me 10+ years. It was over $17k. Four years in, the transmission goes. I set my limit at $12k this time around. I did better, but I'm still not where I need to be.