San Diego Housing Bubble News and Analysis

I dunno what to do.

Asking for personal advice from a weird group (and I include myself here) of housing-obsessed blog readers is probably not the best idea. Honestly, there are some real oddballs here. I, for example, LOST MONEY INVESTING IN GOLD LAST YEAR. I'd like to give you some advice, but I'd probably do more harm than good.

You're making and saving good money anyway, you should be fine no matter what you do.

If you take the promotion will you be eligible for overtime? This is a consideration. Which position is most immune from the vagaries of the market? Is either bullet proof or could you lose your job in a worst case scenario?

Point taken, CONCHO. On the other hand, I'm under no obligation to follow any bad advice I get here. I posted partially as an attempt to gather my own thoughts on the matter as well.

No, Aecitia. No OT in management. Over the next 5 to 10 years, I don't see any reason to feel the job security won't be solid in either management or at my current position. However, I probably have a good 30 years left of being a working stiff and getting management experience and moving up the corporate ladder is something that would give me more options at other companies in a lay-off/downsizing type situation in the distant future.

Long term management gives me a better resume and more security to find good work elsewhere should this company ever turn on bad times.

IMO stock options mean nothing. It is an elusive dream that every company will have an IPO and the shareholders will strike it rich. I've been an engineer for 15 years now, and I only know one or two people who have become rich this way. Has anyone on this forum struck it rich this way? Know anyone who has? Do tell. The guys I know who got rich did so by starting a company then eventually being bought out.

For your situation my logic is simple, here are the options I see:

1. Take the promotion, work longer and harder for less pay, and *maybe* your stock options will pay off.
2. Don't take the promotion and you're guaranteed to make $30k more per year plus OT.

Being a manager means being good at making business decisions. If I were you I would tell them about your wife-2b and tuition and saving for a home and so on. I think your promotion offer is insulting.

Now I have two questions: First, what's up with paying for your wife-2b's tuition? Next, if you're making $140k now and saving only $2-$3k per month what are you doing with the other $8-$9k?

BTW middle-managers are usually the first to go if there are ever layoffs.

Negotiate, my friend...if the company is growing as rapidly as you say, they should be interested in negotiating, particularly if you play the sob story about how your fiance is in college, you can't afford a house yet, and your fiance desperately wants to get pregnant. With a little luck you can equalize the salary plus get some options.

The whole scenario seems a bit odd to me. I can see a sales manager being bonus dependent based on performance, but for the manager to take that kind of a cut purely on the option opportunity seems to be a bit much.

Stan

Next, if you're making $140k now and saving only $2-$3k per month what are you doing with the other $8-$9k?

He's paying a lot of taxes on that $140K and I assume contributing to his 401K. If he can save an additional $24K-$36K per year, he's saving a lot. Sure he could save more by living in a trailer and eating TV dinners, but come on, he's doing pretty good here...

Thanks for your input, nostradamus. There's been talk of an IPO in a "couple years" since I started here, nearly 4 years ago. Still, with our current size and recent growth, it does seem likely that it will actually happen.

I had a frank discussion with the director of my department today. He knows exactly my situation in great detail and understands my dilemma. Most managers start at about $65K. Since my pay is relatively high at my current position, they'll probably be able to start me at mid-$70s if I go for it. Better than $70's isn't happening to start, but a first review happens after 6 months, when the salary could go up another $15K or so.

With regard to your questions...hey, she still in junior college now and it's pretty cheap. In a semster or two, she'll go to UCSD or SDSU and will get whatever financial aid she can and I'll pay the rest. Gotta invest in our future. I don't want to be the only breadwinner for the rest of our lives.

My gross pay of about $6,000 twice per month gives me a net pay of only about $3500 twice per month. Damned taxes! It's enough to make a die hard liberal like myself turn conservative! I live pretty frugally, actually.

In my experience don't take a lower paying job on the promise of an IPO. If you don't like sales, or for another reason want the other job (like you have a kid and want to be home more often w/o the overtime, etc), then that might mitigate things. But if you like what you are doing, you'd be giving up $130K over the next two years alone for a lottery ticket.

CONCHO you're right he's doing well, but after my simplistic math (even if he's paying 35% tax and maxing out the 401k at $15.5k) he should be taking home at least $6700 per month. I have lived quite comfortably for some time now on $2.5k per month (single and in a decent condo, with many toys and vacations) while I save the rest of my income.

I guess the rest goes to the wife-2b. Anyhow, my point is: pinch every penny!

My gross pay of about $6,000 twice per month gives me a net pay of only about $3500 twice per month. Damned taxes! It's enough to make a die hard liberal like myself turn conservative! I live pretty frugally, actually.

Ha, my "simplistic" math was only off by $300!!! My guess was you take home $6700 per month but you're taking $7k. Yes, damn the taxes. I wonder if there's some kind of tax break you can take for the wife-2b's tuition. Or maybe you have to get married to take the tax break.

You should definitely negotiate with the company. What they're calling a promotion is a euphemism for a pay reduction with the accompanying enslavement of golden handcuffs.

Title promotions are overrated, especially 1st line managers imho". Also, manager titles, while valuable inside the company, are not asy easy to transfer over to another company if you need to move, especially first level managers. Throughout my career, I've bounced between management and pure technical contributions, and frankly the pay for me relatively was about the same.

My advice, if you like dealing with personel, doing reviews, help mentoring people, than perhaps move into management.

if you are a good salesman AND enjoy being a salesman, you should stick with that and even figure ways to hone your skills even further. Good salespeople are always needed, and I would say the old saying "same technique, different media" applies to sales skills. Contrary to popular belief, Salesmanship is a skill that frankly not everyone can do well. If you are one of the people that can do well, you're going to always be in demand.

I would personally NOT take a salary cut to manage people just for the sake of managing people, unless you love that more than Sales... OR unless by NOT taking this position, someone you don't like that will make your life hell will be your supervisor now and will get in your way....

If you're a sales hotshot, you could easily find employment and ask what you want the next time around. No offense, if you're a good salesman, there's absolutely no reason why you cannot be making double of what you're seeing now in the right company. But you need to be honest with yourself and figure out how you rank as a salesman. Again, I'm assuming your in sales, and aren't something like a "sales engineer". Small title difference, big responsibility differences. Consider not only what your current company is offering, but how your decisions would benefit you in the future. Because they only thing that is constant is you and what you can do. Companies come and go. What you bring to the table doesn't.

Regardless, cash is KING right now. I've always heard stories of companies prior to IPOing doing a house cleaning and laying off people just to make the numbers look good. If that happens, how pissed would you be if you traded in your salary for options that no longer you can do anything with.

However, life is a gamble, and if you feel like this company is the next qualcomm, well life is too short to wonder why not....This is coming from a person that left millions worth of stock options on the table by leaving qualcomm, and subsequently leaving millions on the table prior to an IPO of a small startup. I was always in the right place, just never at the right time :)

You know, the other thing you should consider is that if you really are that good, you really should be asking your company to giving to stock options. You know the old saying. Squeeky wheel gets the oil.

Sorry I'm not more useful.

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----- Sour grapes for everyone!

Yes stansd, it is a bit much.

But most people in my position here who have management options are making substantially less, maybe $75-$95K including OT, so the promotion isn't such a sharp pay cut, and sometimes it's even a raise. Current pay just isn't much of a factor in determining the new mangager's salary. They get $65-$75 to start, period.

I have lived quite comfortably for some time now on $2.5k per month

Really? If your rent is $1500/mo, you've only got $1K/month left. That's $33 a day for food, gas, tires, doctor's visits, surfobard wax, etc... You're frugal, dude! Hopefully your girlfriend or wife is too or she'll be complaining haha...

"Sorry I'm not more useful."

Actually, I do find your thoughts useful, flu. Along with the other postings, and my own caution and predisposition prior to originating this thread, I'm getting more convinced that management might be a bad move for me.

I can't increase my salary in my current position though, regardless of how good I get. I've maxed out the pay scale. I can hang out and milk the OT at the end of the day while surfing the net and whining about my work dilemma, though.

What I'd prefer to do all day at work--manage or sell--isn't much of a factor. I'm all about the money. For what it's worth, I'd prefer the change of pace and new challenges that would come with management, but I work for money, not for new challenges and whatnot. I don't hate my sales job and that's all I really expect.

You also have to honestly evaluate the chances your company will go public and hit it big. If it were me I'd take the sure thing salary of 140k a year over the chance this company would hit the lottery, but I tend to be more risk averse than most people.

Just make sure you aren't drinking too much of the company kool-aid. It is really easy to get caught up in the momentum and a lot of times the hearsay never pans out.

Maybe I'll hedge my bets. Keep my current position and figure out a way to embezzle should the IPO bring in mucho dinero.

Really? If your rent is $1500/mo, you've only got $1K/month left. That's $33 a day for food, gas, tires, doctor's visits, surfobard wax, etc... You're frugal, dude! Hopefully your girlfriend or wife is too or she'll be complaining haha...

That sounds about right. I'll take it one step further and call myself a CHEAP BASTARD. Truly some of the best things in life are free.

I had one other thought: you may want to research salary statistics for the management position and negotiate with that. Better yet, go to some interviews at other companies to see if you get better offers, then come back to the one you're at and see if they'll play ball. Don't be emotional or let them play on your loyalty. That's all BS and if the bottom line was improved by laying you off, any company will do it in a heartbeat. The job of your manager is to get you to do the most work possible for the least pay. Keep that in mind.

CogSciGuy:

A lot goes into the thought process in leaving a sales job for management. The most important in my mind is how much do you enjoy being a salesman? Before I went into medicine I was a furniture salesman, and the top salespeople always made more than the management. That was certainly true for me in the first year or so when I really enjoyed it. After I started to burn out I saw my income decrease to about half of what it was before. Nothing to do with the economy, my heart simply wasn't in it anymore. Had I considered a move into management at that time, who knows, I might still be in that business.

If you find yourself tired of what you're doing the move might make sense. If you're a consistent producer that can see yourself doing the same thing for years, it may not. Whatever you do, rest assured that your sales skills will help you tremendously in whatever you decide to do.

Making the jump from individual contributor to manager can be difficult. Other promotions can be based on seniority, experience, education, etc. Who gets selected to be a manager is much more subjective so keep this in mind.

Never take a paycut

Thats my philosophy. I would stay put it sounds like you are making a nice income.

Making the jump from individual contributor to manager can be difficult. Other promotions can be based on seniority, experience, education, etc. Who gets selected to be a manager is much more subjective so keep this in mind.

There is an easy, fullproof way to get a manager position, provided you aren't a complete idiot and haven't burned any bridges. It works every single time. Work for a company in which the employees are so unhappy that they leave left or right. Then if you stick around, you automatically become a manager, unless they REALLY don't like you, at which point you should then leave.

Being manager doesn't mean that you are necessarily the most qualified. It means sometimes being in the right place at the right time.

The only couple of times i stepped into management were primarily when if I didn't I'd be working for someone less competent AND who I felt wouldn't give me the recognition that I would deserve, or when they other candidate would have created issues with the team to rip the team apart. Frankly, it wasn't particularly what I wanted to do, as I had to deal with all sorts of things like conflict, expectation management, budgets, which frankly took up more time that what I enjoy doing. I also don't mind working for someone who isn't as technically capable as me, as long as that person doesn't try to put one over me.

Then there were times when I was passed up for an management position and some imbecile was placed above me that would have made my life hell and would have stolen all recognition that I would have deserved... In those situations, I simply stepped aside and  let them run the project...inevitability into the ground. Meanwhile, I worked on something else, usually something that was an exact duplication of what that person was trying to do, and usually did cleanup operations after he/she ran a  project  into the ground. Sounds mean? Well, I don't backstab people, but I definitely don't let people backstab me either. Sometimes, you can't really step aside at a startup, at which point it's plan B (you find another position, but you leave on a a good note, so that if things fail, they might call you back to help fix whatever thing was run into the ground).

selfportrait

----- Sour grapes for everyone!

Actually, I do find your thoughts useful, flu. Along with the other postings, and my own caution and predisposition prior to originating this thread, I'm getting more convinced that management might be a bad move for me.

I can't increase my salary in my current position though, regardless of how good I get. I've maxed out the pay scale. I can hang out and milk the OT at the end of the day while surfing the net and whining about my work dilemma, though.

What I'd prefer to do all day at work--manage or sell--isn't much of a factor. I'm all about the money. For what it's worth, I'd prefer the change of pace and new challenges that would come with management, but I work for money, not for new challenges and whatnot. I don't hate my sales job and that's all I really expect.

If your bonus is tied to how much you bring in, make a case to get put on the biggest accounts. In addition to the "money", you will be definitely challenged, as you will find bringing in the big fish is not that easy. If you master this, you will have skills that you can take wherever you go, in whatever industry....Again, you sound like you're a young dude, so you got a long way to go. If you're good at what you do, I frankly would be disappointed in you if you're not seeing $250k+ in the future because you decided to take a detour (again if money is that important to you). Sales people frankly make more then engineers and in many cases job blow line manager. It's harder to be a good sales person than an average engineer or average manager...though average sales people usually get paid crap and get flushed by the company if they don't meet their quotas....Again, not everyone can be a good salesman. It takes a certain personality to do it.

selfportrait

----- Sour grapes for everyone!

Negotiate, my friend...if the company is growing as rapidly as you say, they should be interested in negotiating, particularly if you play the sob story about how your fiance is in college, you can't afford a house yet, and your fiance desperately wants to get pregnant. With a little luck you can equalize the salary plus get some options.

The whole scenario seems a bit odd to me. I can see a sales manager being bonus dependent based on performance, but for the manager to take that kind of a cut purely on the option opportunity seems to be a bit much.

Stan

Speaking from experience. The sob stories that people use to tell me at companies didn't really do it. The ones that came to me and told me what they brought to the table and what it would be like if they weren't there did work though, provided those people really did walk the talk so to speak. You do have to be tactful in saying this. But companies aren't usually sympathetic with people that just ask for a raise for because of some sob story. Just my opinion. 

selfportrait

----- Sour grapes for everyone!

If I had a new baby at home, I wouldn't want to be working OT...or ANY extra hours....

On the other hand I have no daddy experience (yet!)...with that in mind, let's ask the newer fathers out there - do you look forward to getting home ASAP??

Retirement planning:

"If you had purchased $1,000.00 of Nortel stock one year ago, it would now be worth $49.00.

With Enron, you would have had $16.50 left of the original $1,000.00.

With WorldCom, you would have had less than $5.00 left.

If you had purchased $1,000.00 worth of Delta Air Lines stock you would have had $49.00 left

But, if you had purchased $1,000.00 worth of beer one year ago, drank all the beer, then turned in the cans for the aluminum recycling refund, You would have had $214.00 left.

Based on the above, the best current investment advice is to drink heavily and recycle.

It's called the 401-Keg Plan"

I guess I'm confused. You're at a start up that hasn't given you options yet? In my mind that's sort of strange, that should be part of the base compensation package at most of the start-ups that I've represented or interacted with.

As for options vesting, I do know of people that have done well (some at start-ups and some at publicly traded companies). My buddy at Cisco is house-hunting due to his options. My brother in law was looking at a $3 million dollar home due to his AMD options (which has withered from $40 down to $7)--so that got tabled. A co-worker asked me to review his option package from his old job. He got options at 23 cents and the stock is trading at $15. Not a huge number but a good $30k for his one year at the company.

I also was a tech-trans lawyer that represented a number of start-ups during the dot boom. So I saw plenty of clients hit it big (and plenty that didn't).

If your company has products and growth, why not go into management? How is taking a pay-cut different than folks that give up 2 years of salary to go to MBA school? Just have to make calculations based on your circumstances.

The challenge with sales is that if you are capping your income out on overtimes as opposed to new clients you may face a paycut down the line.

While the pay disparity between what you are making now in sales vs what you might maek in management I might suggest this.

Work for another year in sales and work hard while the finace is in school. Before she gets out of school, if you like the challenges of management take the pay cut. During that year that your income is dopenw and your girlfriend is in school go ahead and get preapproved as a first time homebuyer. Your income will be low enough to qulify you for many state and federal programs. Could be tht your income goes down but your net at the end of the day is not that dieffernt if yopu play it right.

On the most basic level, it seems like you need to ask yourself if your career goals involve management or just sales. Secondly, if you decide to go the management route, determine whether now is the right time to make your move. Rarely is there ever a 'perfect' time to pull the trigger, so if an opportunity presents itself and you are comfortable with the risk, go for it. I am in a bit of a career crisis myself right now and considered posting my own situation just yesterday!

Am I missing something here? You're in a sales position, but only get salary plus OT, what about commission? Do the sales managers get commission? If not, then its not a sales position, its a customer service position, or marketing position, whatever. But sales jobs imply that there is a salary plus commission which makes up the total earnings target. Where I work, the sales manager's salary is a fraction higher than the sales reps, but their commission scale is based on a larger territory, so their net income potential is greater... otherwise they'd never be able to hire any managers. Your company seems backwards. How much does the CEO make, minimum wage?

There is no such thing as a promotion, with a pay cut. A promotion implies a pay raise. I took less money for a new job once, and regretted it forever, it took more than a decade to get back what I gave up financially. If the total, guaranteed earnings potential for this management position is less than what you make now, run like hell. You'd be gambling on a future windfall instead of taking the sure thing. A better idea would be to save the money at your current position, and take it to Vegas and gamble it all there, at least then you can control the odds.

Or better yet, save the money at your current position, and KEEP it, invest it! Money in the hand is worth a whole lot more than the risky potential for a little more later.
Have you calculated how much money you'll need to make in the IPO just to get back to even? What comes after that?

Just my humble $.02. Good luck with your decision.