Sunk Costs are Irrelevant (again)

I quit my job. I handed in my resignation last Friday. My last day is 4/18. I have a really good job. I respect and admire my colleagues. There’s upward mobility. I make more money than I want to spend, and the hours are more than reasonable for an MBA job. I don’t have a new job waiting – I don’t even have an offer. Those of you who know this blog might appropriately call this sunk costs are irrelevant part II.

Of course you ask, “Why quit???”

In a word, family. I moved to NJ just under 2 years ago for no reason other than this job. Mental note: when the move is only for a job, you might want to rethink it. My wife in a post-pregnancy haze and with an overwhelming nesting instinct agreed to move with our newborn. It was my first job out of business school and anyone in business school can attest to its importance. The first job sets your salary for every job after it. For me, this job more than doubled my pre-MBA salary. And, it’s a great job. I lvoe it. It’s just in NJ.

NJ doesn’t work for us. It’s far from our family and friends. Too far. Too far when you have an aging mother with health problems and you’re the only child. Too far when you have a 22 mth old who adores his grandma but who only gets to see her for painfully short amounts of time. Too far when you’re missing out on so many good times with your friends and their young kids. So, the answer to why quit is that it’s the right thing to do. Still, the decision begs some questions…

1. Why quit now? It’s that bad. We’re just very unhappy here. To be honest the timing from a real estate perspective is really bad. The timing from a personal perspective is perfect because it is NOW.
2. Why not wait until you find a new job? I have been looking (so have my recruiter contacts), but it’s difficult to do from NJ. I have a specialized job. And, I’m sure many employers would prefer to hire locally rather incur the high costs of an employee relocation package. I think my chances are better with a local address and the time to focus on the search.
3. What are you going to do with your home? Recall that my wife had a new baby, and the nesting instinct of any new Mommy. She wanted to own. So we bought. At the top of the market. In NJ. Oh, it’s painful. The market here is awful. We’ve already priced at $10k less than what we paid. I know that we will lose 100% of the equity in our home if not more. It’s a hit, but in the end it’s only money. Remember, sunk costs are irrelevant when making a decision at a set point in time.
4. Do you have an emergency fund? Of course. It’s hard to know exactly how large it will be because I don’t know moving costs or whether I’ll have to take money to closing. Currently, I estimate I have cash and cash equivalents equal to the cost of living 6-12 mths. in NC. That’s without either my wife or I working. If worst comes to worst, we can always move in with grandma (< ---not gonna happen!).
5. Why didn’t you try harder to make it work in NJ? We did try. My wife is the opposite of the Jersey girl. She doesn’t care about makeup, expensive clothes, ridiculous jewelry, botox, facelifts, tchotchkes for your home, or gossip mongering. Unfortunately, in our experience, that’s what the stay-at-home Mommies in this area care about. Theirs is a disposable, consumerist culture that just icks out the freecylcer, recycler, and frugal hacker in us. I’m not trying to be self-righteous, that’s just not our path or our values. The traffic. Have you driven in NJ? Do you know how retarded jughandles are? Have you seen the women driving 90 miles an hour, on their cell phone, texting on their Blackberry, and doing their makeup? What about the guys who drive the wrong way in the roundabout because they think the direction you choose is optional? Would you want to drive on the same roads with these people with an infant. The shore. I can’t even pronounce it right. Did you know you have to pay to go to the beach in NJ? And, the crowding – ugh. Perhaps I’m just spoiled by the Outer Banks. Property taxes. They’re the highest in the nation and there’s talk of pulling all the property tax rebates to help correct for budget shortfall brought on my more corruption than I even want to know. In a word, my experience in NJ has been absurd.
6. Is this an April Fools blog post? Fair question. No. I really quit my job. My family and I are done with this place. I’m moving back to a community that we love, full of farmer’s markets, slower drivers, a much lower cost of living, and the friends and family that will be the positive influence on our son that he deserves.

I’m not sure if there’s alot of real learning in this article, but perhaps the story in and of itself can be a takeaway about the paths people choose. I’ll keep you updated in the coming weeks to let you know how the job hunt, house selling, and everything else in between is going. Wish me luck. And, let’s hope that the sunk costs really are irrelevant.