Husband wants to take a huge paycut to join a startup

[Anonymous]

Anonymous wrote:

Anonymous wrote:My husband did exactly that with almost exactly your numbers. We’re doing just fine. In terms of cash flow, we’re in the red maybe 3k a month, which is really NBD given our savings. DH much happier at his new job and that means a lot to me.

Do you still have a mortgage? OP doesn't and that may make a huge difference as well.

No mortgage.

[Anonymous]

With no mortgage, $100k salary and so much cash savings that you guys have, I think you guys will be ok. Obviously your DH is ambitious and successful at what he does - I think it's fair for him to try the start-up if that's what he wants to do with his career. Worst case scenario the start up fails, he will be able to get another job. Best case scenario, your family may be set for life if it does well!

[Anonymous]

Anonymous wrote:You have way more than enough savings for him to do this and not make changes to your lifestyle. He has been saving and planning for this for years, waiting for the right opportunity to come along. It is here and he should go for it. You do not need to wait tables or skip the basement reno when you have almost 3mil in savings and he will still be making 6 figures. It sounds like your husband is very fiscally responsible and you should trust him on this. If you manage to blow through a million dollars in three years, he can go back to a higher paying job. He worked hard to make this happen, so don't hold him back or make him change his lifestyle!!

This

[Anonymous]

What is the role for most PPs who are working at startups?

[Anonymous]

Anonymous wrote:What is the role for most PPs who are working at startups?

Programmers.

[Anonymous]

Anonymous wrote:

Anonymous wrote:What is the role for most PPs who are working at startups?

Programmers.

Wow, programmers are making $600k and then migrating to $10M startup equity?

[Anonymous]

OP, you are sitting on more money than most people see in a lifetime. Support your DH as he takes the risk. And be cheerful about it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:What is the role for most PPs who are working at startups?

Programmers.

Wow, programmers are making $600k and then migrating to $10M startup equity?

Business development, I met quite a bit in new technologies.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:What is the role for most PPs who are working at startups?

Programmers.

Wow, programmers are making $600k and then migrating to $10M startup equity?

The most talented ones are, esp if they’ve moved into C-suite roles (which then turns into not much programming). That was why my DH jumped ship at his company. It was no longer a startup and he was spending all his time in HR and finance issues that frankly he just wasn’t suited for. He was longing to start coding again.

[Anonymous]

Also OP, you mention worrying about paying for college. A solid college education now is about $100k per kid. Make a deal with DH; fund three 529s right now at $100k each and you are totally on board.

[Anonymous]

Anonymous wrote:OP, you are sitting on more money than most people see in a lifetime. Support your DH as he takes the risk. And be cheerful about it.

+1!!!

Get a job in 2 years when your 4 yr old goes to kinderg. if yoyre that wortied about finances or you see that things arent panning out (worst case you live on 100k? And thats a problem?)
You said you burned bridges, but there are tons of (flexible) paying jobs - temp agencies, sub teachers, retail work esp during the holidays, etc. if you're looking for entry level, but decent money.
Honestly, I wouldn't worry though.

[Anonymous]

Anonymous wrote:

Anonymous wrote:You and he have saved a ton of money to be able to do this. Many years ago, after we had saved a lot of money (nothing like you have!) my DH did this. He was frustrated being a well paid cog in a big organization and wanted to do something entrepreneurial when our children were 5, 3 and 1. A long story made short, he took a lower salary and a lot of equity and made a great deal of money. He then took some of it and invested in another business and again did incredibly well. Give him the three years he needs to see if it will work and give him all the support and encouragement he needs. Sure, pinch pennies a bit but don't go crazy.

Op shouldhere from folks who did this were it didn't work out to understand most likely real world scenarios and how it all worked out ok. Maybe not $$$ ok but still fine. ??

Don't think about failure! If he makes $100,000 how much will you need to dip into savings to cover your needs? Since you've been big savers it doesn't sound like you spend a ton of money. The only real risk is if he needs to invest $500,000-$1,000,000 in the deal and could lose it all. That's a very different issue.

[Anonymous]

It was a long time ago when my DH did this, quitting a big job and getting involved in a start up. We had decent savings and I was working but for a few years our income was cut by about 75% but we had savings to cover us. In his first deal he got a decent salary and a nice equity payout but nothing huge but he loved the job. In his second and third deals he invested about 15% of our savings into the deals and they had wonderful payouts, many multiples of our investment. If the first deal hadn't worked he might have gone back to a big corporate job. While my DH is an entrepreneur, as the primary breadwinner and the father of three young children he was never going to bet the farm and put our financial future at long term risk. My bet is that OP's DH is the same way.

[Anonymous]

It's ridiculous that so many people are jumping on OP. She has a good and more importantly, stable situation. Yes, her dh laid the financial groundwork to take a calculated risk but it still may not pay off. Startups fail all the time. On top of that, he will have to work more hours than the 50-60 hours he already works. With their current assets and a 600k a year salary, her dh can work for couple more years and retire if he really wanted to. They have a good situation. Why change it?

As for her being a sahp, OP sah makes it possible for dh to have a family and not parent track his career. So it's absurd to suggest that the dh hasn't benefitted from this arrangement.

If not pursuing this opportunity will lead to major FOMO and resentment, OP should support her dh within reason. Give it 2-3 years and if it's not panning out, reevaluate. In the meantime, make an annual budget and make sure the 529s are fully funded.

[Anonymous]

Anonymous wrote:It's ridiculous that so many people are jumping on OP. She has a good and more importantly, stable situation. Yes, her dh laid the financial groundwork to take a calculated risk but it still may not pay off. Startups fail all the time. On top of that, he will have to work more hours than the 50-60 hours he already works. With their current assets and a 600k a year salary, her dh can work for couple more years and retire if he really wanted to. They have a good situation. Why change it?

As for her being a sahp, OP sah makes it possible for dh to have a family and not parent track his career. So it's absurd to suggest that the dh hasn't benefitted from this arrangement.

If not pursuing this opportunity will lead to major FOMO and resentment, OP should support her dh within reason. Give it 2-3 years and if it's not panning out, reevaluate. In the meantime, make an annual budget and make sure the 529s are fully funded.

+1 I just had a discussion about this with my DH who worked for a startup. He said $600K sallary is a lot to give up, and OP is right to be concerned.

OP, I've asked this before, sorry if you answered it.. but what would be your DH"s prospects of finding another job that pays this much if the startup didn't work out? This would be my biggest concern.