Is It OK to Make Less Money than You Could?

by Neal Frankle, CFP ®

From the time we are tiny Pilgrims, many of us get the idea that it’s important to make as much money as possible when we grow up. Many of us hold on to that idea for a long time.  While maximizing our potential is super important,there are many condititions that make it smart to earn less than you otherwise could.  Sometimes it’s even shrewd to make no money at all.  How do you know you are in one of those situations?

In my experience, there are basically two distinct circumstances that make earning less money than you could smart.  Let’s go through this together.

1. The Pursuit Of Happiness

I read a book several years ago that later became a movie called The Pursuit of Happyness that illustrates this well. I might be the only one in America to say this, but I was disgusted by the story. (I know most people who saw it think the movie was fantastic, but the book made me so angry I couldn’t even see the movie.) Why was I so upset?

Despite the main character’s declarations of devotion to his children, he pursued his career at the expense of his family every chance he could. He had the opportunity to take a salaried job as a pharmaceutical salesperson. That job would have provided a modest but stable income and a home for his family. He decided to pursue the big-time life of a stockbroker instead. He chose the latter even though it meant homelessness for himself and his son – albeit temporarily. I consider that a selfish choice despite the fact that it worked out well in the end…at least for the main character.

The take-away is that making less money might be very smart if it enables you to have more life and take care of the people you are responsible for.

2. The Pursuit of Moneymake less money

Mushy warm fuzzies aside, it  can be very clever to earn less now in order to earn more later. I made a huge mistake by not recognizing this when I graduated college.  I was offered a fantastic job with an oil company right out of school but I took a dull and boring position with an aerospace firm instead because they offered $3,000 more a year.

Of course $3,000 is nothing to sneeze at – especially when you consider that this was back in 1980.  It’s worth about $8700 today when you consider inflation. But the lower-paying oil company job was by far more interesting and had much better prospects for future advancement. I could have been the Sheik of Shale by now.  Who knows?

In the end I suppose it worked out OK.  I detested that aerospace job so much that I vowed never to work for anyone ever again and that set me on my path to become a financial planner.   But had I continued working in industry, that aerospace job would have cost me big time over the long-run in terms of wasted time and forgone opportunity.  The longer I would have stayed the more difficult it would have been to find a way to get unstuck from a job I hated.

The bottom line is this.  When we access the adult part of ourselves we acknowledge that life is all about trade-offs.  When we say “yes” to one thing, we say “no” to something else.  If you make less money now in order to have more time with your family (as long as you live up to your obligations) that might be fine.  If you make less money (or none at all) in order to build a better career, that might be fine too.  But if you quit your job so you can catch up with the Oprah shows you’ve missed, that probably isn’t a responsible decision and it will cost you tremendously over time.

Of course, sometimes it’s hard to judge for yourself.  Are you making a good decision or just rationalizing your lazy bones behavior?  The best way to know is to run it by a few well-chosen people.  Then listen to what they have to say.

Are you making less money than you could?  Is it a good decision?  How do you know?



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{ 9 comments… read them below or add one }

J. Money July 14, 2014 at 8:49 AM

Right on, brotha… In fact, I’ve been “losing” about 50% of my income the past handful of months since focusing on family and better business ventures, and I can’t tell you how much happier I am :) Granted, I was working my a$$ off way too much before, but still – less money more joy!


Kat January 17, 2014 at 4:49 AM

Neal, one thing I have learned from watching the mistakes my dad made with me is this: you have to balance YOUR needs with your kids’ needs.

NYU sounds craptastically expensive. If that’d been my kid, I’d say, Okay, fine, but you figure out how to pay for it. I also would encourage that kid to figure out who the hell they are first before spending craploads on college money–when now MIT is offering much of their coursework online for FREE!!! Go figure!


Neal Frankle, CFP ® January 18, 2014 at 11:14 AM

I like it Kat. The only thing is, that when many kids are told to go figure it out they go out and take on huge college debt. I think we kind of owe to the kids to gently suggest a better path.


Barb June 9, 2009 at 7:17 AM

A huge “NO” – you should not feel guilty! Easier said than done, I know.

As to your child, who can really say that $40,000 a year in tuition buys you a better education than $10,000 a year? A college education is what the individual makes of it, regardless of the institution.

My family made the decision 4 months ago to trade 2 incomes for one. We’re still comfortable, but we were never extravagant in the first place, and our home life has improved dramatically. That’s worth more than the extra money ever was.


Neal June 8, 2009 at 9:58 PM

My Journey,

You are right on both counts. I raise this issue as an emotional issue and of course, you’ve reminded me that the solution is really not to be found on the emotional side but on the logical side.

Still the issue of earning more vs enjoying more exists….


You have hit the nail on the head. Exactly…..what is the cost. If everything is ok now, is it right to rock the boat?

In your case, I’d look at why he went after the MBA in the first place. That might help give you some direction.

I agree that this is an interesting question….I don’t know if there is any answer to it but I think the conversation is important.




Anne June 8, 2009 at 5:13 PM

I think this is such an interesting question, and one that we are dealing with in my family. My husband is an RN, working in an operating room. He makes enough money to provide everything we need, including savings and things like nice vacations. He is also home from work by 3:30 everyday!! The dilemma: In December he received an MBA, potentially significantly increasing his income opportunity. However, so far we have decided to wait because we are not sure that we would appreciate the lifestyle change that would come with a new job. Sure he might be able to double his income (literally), but at what cost? Especially when we have a nice lifestyle now!


My Journey June 8, 2009 at 12:07 PM

Another thought I just had so I figured I’d share – if you had sent daughter #1, to NYU at $50K/yr, you are either doing 1 of 2 things:
1) Inhibiting the choices of the rest of your children either cause the cash isn’t there OR you wouldn’t be able to cosign anymore loans


2) Without her active knowledge, setting her up to dig out of a pretty deep whole with student loans of $200K+ interest.


Neal June 8, 2009 at 11:38 AM

Thanks. I really appreciate your comments – as always. I tried hard NOT to beat myself up….I don’t think I am.

I tried to ask, maybe not too well….how to balance the responsibilities we have to ourselves vs our family.

You do make an excellent point….no matter what I do, we may not have had the resources to make NYU an easy decision.



My Journey June 8, 2009 at 11:14 AM

Disclaimer: I am young…27 turning 28 in November.

As you are well aware, I have a blog too, and like you I make next to nothing on it. I have enough sponsors on the site as to make sure I am not losing money, but I/we are not the big guys. If the blog interfered with my family’s lifestyle it would end.

Notwithstanding, even if you worked an extra hour each night on marketing it is unlikely NYU would have happened anyway…so no reason to beat yourself up!

Do what you are doing! You are happy and do well financially, there are VERY few people out there who can afford to send their kids to NYU at 50K a year.


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