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Should You Take the Higher Paying Job? Or Work For Happiness?


Everyone says to follow your dreams. Warren Buffet says to follow your passion. There’s always a debate about whether you should work for money or work for passion. If this was a blog about building a successful career, or finding happiness in the workforce, the answer would be simple. Work for happiness.

However, this blog is about achieving financial independence, meaning you want your savings to pay for your day to day expenditures. Perhaps for some people that are reading, you want to achieve FIRE. So what advantage does a person have that works for money over achieving happiness? That’s a tough question to answer, but instead let’s take an analytical approach.  Thankfully we have some spreadsheets that can help us out.

The Case Study

How many times have we told people how much we hate our jobs only to continue working at it? Probably plenty. What if you found your passion job, but the problem is it pays you significantly less money? Should you take the new job knowing your own happiness will make you less stressful?

So let’s investigate what happens when you work for money versus working for happiness from a financial perspective.

Let’s work out some assumptions first:

  • We assume tax levels don’t change from current average tax levels in the future
  • We live in Toronto. It’s the center of the Universe, everywhere else sucks
  • We have fixed spending of $40k throughout our lives indexed to inflation.
  • Inflation is always fixed to 2%
  • We can achieve a rate of return on our savings of 7% long term

Kill Me Now Job

Okay, first off let’s look at the shit job. You hate your boss and you hate your work. You want to kill the colleague that sits behind you and pop his inflated head and ego and the job is really monotonous. You will never get a raise more than inflation in life, but damn it, the job makes almost double what you can earn right now in the field you want to work in. Do you stay?


Right off the bat you pay high taxes, but your income is stellar at $90K a year. It’s what most people would die for when starting a new career. Despite the fact your boss is a prick and never gives you raise of more than 2%, you save diligently and retire by flipping your boss the finger.

After saving for 25 years and investing at 7% average return, you’re sitting on a cool $2.2M. That’s a heck lot of money. You wasted 25 of your life doing it and you hate yourself, but now at 55 you’re retired on a beach sipping pina coladas.

I Can Stay Here Forever

Let’s change the scenario now. You love this job. If you could marry it and declare “from death do you part” you would do it. This job fits into your passion and you walk into work every morning and shout “I’m on top of the world” to your colleagues. Everyone “high fives” you and the feeling is orgasmic on the job. The only downside to the job is your pay sucks.

The monetary upside to the job is that the boss says “I’ll give you a 15% raise every 3 years”. The remaining years your salary is just keeping up with inflation at 2% raises. This doesn’t sound so bad to you since you’re going to “catch up” in the later years with higher pay.


Working with a low salary to start, the savings rate is extremely low. Living in a world class city like Toronto is difficult to save with such a small salary. Thankfully, you love the boss, and the raises that come later really help with the savings rate.

During the first decade, while friends with higher pay are getting themselves houses and fancy cars, you’re struggling to get by financially. But rather than bitching about your job and saying how you want to kill yourself, you love life. Nothing can be better than working at your job, despite the fact you’re still renting.

At the end of your career, you’re absolutely caking it. $240K a year! But the numbers don’t lie. Even with a higher savings rate near the end of a 25 year career, the person that hated their job with a higher paying job out of school is ahead by almost $700,000 in lifetime net worth.

A Price For Happiness

People always ask, “Is there a price for happiness?” With these numbers, it’s speaks for itself. Yes there is. In the scenario outlined above the price for happiness is $700,000 over 25 years. Now the numbers may vary, and I made up very arbitrary scenarios, but there is one thing that this case study illustrates. The power of compound interest and long term investing should not be ignored.

Saving early and investing earlier in life has a much greater payout than trying to “catch up” in the later years in life. In fact, I strongly suggest saving vigorously in the early years of your career. Everyone says you should enjoy your life in your 20’s. You’re only young once, but the fact is, you can still do many things in your 30’s when you have a war chest that is generating substantial passive income. That short 10 year sacrifice can make a huge difference in the long run.

Remember that achieving financial independence means you are trying to achieve the greatest cash flow as you can to support the lifestyle you want. What you want to achieve in your career and how you want to enjoy it also has a significant impact on your financial independence. The sacrifices that you are willing to make and the type of lifestyle that you want to live is entirely up to you.

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