The Rat Race Career Ladder, FIRE, and Having “Enough”

When I started this blog in 2019, one of my motivating points was that I had reached a net worth of $100k USD at age 25 without ever making a six figure salary. Last month when I wrote “Thoughts of a 28 Year Old Quarter-Millionaire,” that accomplishment too was earned without a six figure salary. It’s time to update my shtick though, because as of last Friday I’ve accepted an internal promotion which will push me just over that milestone. I got about a 10% raise which will bump me to a salary of about $103,000, and bring larger potential annual increases going forward.

I’ve now nearly exactly doubled my starting salary of $56k out of college. Not a bad trajectory in a little over 6 years. Pretty typical progression for an engineer in a high cost area.

Unfortunately, it brings me to a sort of crossroads on the career ladder. I’m now at the highest position I can be at in my organization as a technical worker. In about 5 years, I will start slowing down and topping out in the pay band, and to get a bump into the next one I would need to move into a supervisory role at or before that time. Maybe I could change employers and squeeze out another decent bump while staying as a technical worker. But in my industry, the progression path is clear — if you want to progress your career and compensation past a certain point, a move into middle management is very often necessary.

Anyone motivated to play the rat race game would start gunning for the next rung almost as soon as they got a promotion, positioning themselves to prove to their boss and their boss’s boss that they’ll be ready to take on their boss’s responsibilities in just a couple short years.

Only, I have no desire to supervise people. I don’t care to be the one reporting issues to senior level leadership. I don’t want any of the added stress and responsibilities that come with middle management. For the commensurate salary increase, the trade-off seems laughable, especially for an introvert like myself.

As I calculated in my previous post, I’m ahead of schedule on my goal to retire by age 40. Conservative assumptions had me pegged to reach my inflation-adjusted FIRE goal by 39. And that wasn’t counting my new 10% raise which will allow me to save, invest, and retire even faster since all of that is going to go to added savings rather than increased consumption to pad my lifestyle. A quick back-of-the-envelope calculation shows that my new salary will help me hit this goal by age 38. Another year knocked off!

Where’s the motivation to continue climbing the career ladder? Is it really worthwhile to go any further and do a job that I don’t want to do for years in order to knock another additional year off my early retirement date?

For the average American, who last month saved just 7.5% of their income according to the St. Louis Fed, it must truly feel like a trap. Chase that promotion to get that raise so maybe you can save more and get ahead. Spend more on consumerist stuff to reward yourself for working hard at a stressful job and show off your success. Crap, now your spending is close to your income, better go hunt that next raise…

But it’s possible to break out of the rat race for those with the right combination of discipline, financial knowledge, and income. The biggest piece is to reject consumerism, live frugally, and make sure most of your spending is on needs rather than wants. I don’t care what my friends, family, or random people think that my income is when I drive or walk by them. I’m spending under $30,000 per year, and I couldn’t care less whether people think that’s all I earn. Because I’m living comfortably and thriving, and the reward of that sacrifice — having a $266,000 net worth at age 28 while being on track to retire early — is worth far more to me than the opinions of others or the fleeting dopamine hit from excessive luxury consumption.

The biggest mindset shift needed to break the cycle of the rat race is how you view that potential next raise. Is it more money to spend? Or is it more money to save, either by paying down debt or investing? If the former, you’ll always be stuck on that wheel. If the latter, you’re somewhere along the path to making the “rat race career ladder” game optional.

At a certain point the consideration becomes, is the extra savings worth the extra work and stress? My savings rate is now well over 60% factoring in this new raise. Juicing a couple extra percentage points will not make or break my FIRE plans. And the further along you get on your journey, the larger your portfolio grows, the less time those marginal increases in savings rate will slice off of your early retirement date.

I think I’m at the career level where I’m just going to coast it out for the rest of my time in the work force. Maybe I’ll change my mind in a few years, when I’ve gotten enough experience to potentially climb up. But right now I emphatically believe the added stress and responsibilities of a move into middle management are not worth the marginal financial benefits to me. I think it would take something pretty big to change that.

Intentionally torpedoing one’s own career advancement is not a decision that should be made lightly. But for those pursuing financial independence, the power to make that decision at all is put squarely in your hands.

3 Replies to “The Rat Race Career Ladder, FIRE, and Having “Enough””

  1. I found this post at precisely the time I needed to read it in my life. I’m about the same age and recently decided to leave an extremely high paying albeit stressful job for a previous job that pays well above my means and offers zero stress. I’m confident that I could occupy the position for the rest of my career and feel fulfilled.

    However, I have been conflicted about whether doing so is the “responsible” decision. Especially since I want to start a family in the near future. “Since I’m young – shouldn’t I be trying to make as much money as possible?”.

    After reading this post though, I’m relieved that someone else shares the same logic that I used to make my decision. Ultimately, we both share the same end goal – to achieve financial independence by age 40. The way I see it – if we have good paying jobs that don’t really feel like work with zero stress – haven’t we already “won” and achieved financial independence/early retirement in a sense. Assuming we could happily hold these positions for as long as we desire.

  2. Hey Justin, thanks for reading and glad you found this post helpful! It’s definitely a huge decision, but at some point the marginal cost of the hit to your work-life balance or enjoyment level of your job simply isn’t borne out by the additional pay. I think it’s responsible in its own way to be able to identify this point.

    One thing I didn’t note in my post that I’m thinking of now that I read your comment is that this decision is semi-reversible should you ever change your mind in the future. Once you’ve turned down a promotion a time or two you might have burned your future bridges at a company, but you can always go for that promotion at a new employer. And as you’ve demonstrated, stepping back down is always an option as well. The only thing we’ve “lost” by choosing to coast, is slowing down future advancement should we decide to change our minds.

    Also something to be said for lower stress making it easier to find that ideal time to start a family. Definitely something I will be thinking about in the coming years myself. Best of luck on your FIRE journey!

    1. Absolutely. I think since the point of FI is to never have to do something you don’t want to for money – finding a job that already minimizes the amount of unenjoyable things needed while paying enough to support the desired FIRE time horizon is a form of retirement on its own. I consider myself to be retired from the rat race phase of my life and the burdens that come with it!

Questions? Additional thoughts? Leave a comment below!