I reduced my salary and my working time. I think everybody should.
At the beginning of August 2021, I told my boss about my resolution to travel more and asked him to reduce my salary by 10%.
I was thinking about this for a long time, and after having a couple of sessions with a therapist, I realized that it didn't make sense to postpone it further.
I thought that there was going to be some resistance from my boss or HR, but he was actually very helpful and within a month, September 2021, I started working with a 90% employment rate.
Why I'm reducing my salary?
Simple, because I want to have more time.
The salary I receive is already enough for me to live comfortably.
Being employed for less of what is considered full-time (100% or 40 hours a week) results in more time at my disposal, which I can use how you want.
For example, in my case, working 90% means I get an additional 26 days of holidays a year. Bringing the total to 10 weeks of vacation per year.
I can use these days whenever I want.
Take a day off in the middle of the week to enjoy a sunny day, go mountain biking, or travel.
Sure, there are a lot of possible ways of using money, but in my opinion the best one is to buy back time.
More money does not mean happier
You may have a nice paying job. Going forward with your career you are expected to get more money but also more responsibilities and tasks.
What do you do with that money? First, you cover all your expenses, you buy some gadgets and fancy dinner, and maybe put some money in an investment fund. But after that, you basically don't know where to spend it because it does not give you any satisfaction.
After a certain threshold (of about 75k a year) getting more money does not make you happier.
You soon realize that the limiting factor in your life is now time, not money.
The money is just a number in your bank account. And having 10% more is not making a big difference. Your lifestyle stays the same.
All the money that you need
If you don't believe me, try to picture this.
Imagine having all the money in the world, you could buy anything that you ever desired.
There is one catch though.
You have to be sitting in an office 8 hours a day, from 8.30 to 17.30. Some days even more. 5 days a week. Every week. For 40 years.
You can buy a yacht. But you realize you can use it for only 1 week per year.
You could buy a mansion, surrounded by nature. But it's two hours from the city and you can never go there.
This is the life most of us are living.
Working more, to buy more stuff we don't need and that we don't have the time to enjoy.
Prepare for the future but live in the present
The generation of my parents was told to work for 40 years and then enjoy retirement.
Does it make sense to get to the end of your life to start enjoying it?
No, we need to start now.
You should live your life now and not postpone it to the future.
Life outside work
I think that your job should not fully define who you are and that you should have a life outside of work.
If you get home at 7pm every day, tired, your day is practically over.
Where do you get the time to follow your hobbies, meet new people, try new things?
Savings and investments
If you are worried I'm not saving enough, do not worry.
- I am not living paycheck to paycheck. If you do, you should first find a better paying job before thinking about reducing your salary.
- I have an emergency fund to cover unexpected expenses.
- In case I lose my job, I will be fully covered by unemployment .
- I'm investing in my pension fund every month (3rd pillar), using VIAC. This sum of money is actually invested in the stock market with low-cost index funds and ETF. Over the long term, it will eventually grow and compound.
- I can't buy a house in Switzerland as it's too expensive, we are talking more than 1 million francs for a small flat. Renting is more convenient in this country.
- I don't want to buy a flat abroad if I'm not living in it. It may make sense as a business investment. But at the moment I'm not ready.
Try it yourself
All my friends and collegues told me: "you are living the dream, you have so much free time".
For me, it's just a logical step. And it's just the beginning. I want to work less and live more.
My friends could do the same, but they are afraid of consequences, too ingrained in the belief that you have to work full time as everybody is doing.
You can do it too. Try it and if you don't like it, you can always go back. But I highly doubt it.