The Cost of Doing What You Want An Atlanta architect took a one-third pay cut to pursue a more fulfilling career. Now he must work harder to build his own financial future.
By SUZANNE SEIXAS

(MONEY Magazine) – The turning point in Larry Arney's life came through a chance encounter over breakfast one morning in 1988. At the time, the young architect was heading a group of 10 volunteers who cooked for Atlanta's homeless every Saturday at St. Mark United Methodist Church. ''When everybody had been served, we'd join them to eat and chat,'' explains Larry, 33. ''That day I plopped down next to this family -- the parents looked to be in their late twenties, about my age then, and they had a girl about five and a two-year-old boy. Come to find out they had grown up only 15 miles from my hometown in West Virginia and had moved to Atlanta looking for work at about the same time I did. But while I'd gotten the job of my dreams -- designing buildings for a big architectural firm -- they'd found nothing and ended up on the street.'' Larry never saw the West Virginians again, but their plight stuck in his mind. Over time, his $42,000-a-year job at Thompson Ventulett Stainback (TVS), a top Atlanta design firm with yearly billings of over $20 million, was becoming less and less fulfilling. ''The stress was bad, the hours long and the pressures great,'' he says. ''I was beginning to realize that my volunteer work meant more to me than my job.'' So in January 1989 he quit, taking a 33% pay cut to become the $28,000-a-year executive director of the Atlanta branch of Habitat for Humanity. That's the international nonprofit group -- Jimmy and Rosalynn Carter are its most famous members -- that puts some 85% of its $58 million in annual contributions into building houses to be sold at cost to low-income families. Spiritually, the Habitat work has been enriching for Larry, who dates his commitment to social action from the time that he first became aware -- shortly after arriving in Atlanta in 1981 -- of the great disparity between the city's rich and poor. At Habitat, he says, ''I'm able to do so much more for the community than I could as an architect.'' During his tenure, his Atlanta branch has boosted its output of homes from 14 a year to more than 20. Besides occasionally swinging a hammer himself, Larry has also become a familiar speaker at church and civic group luncheons. Last November he was named one of a dozen Outstanding Young Atlantans by Outstanding Atlanta, a nonprofit group that recognizes people for their community service. What's more, his job brought him together with his wife, Agnes Norfleet, 32, a Presbyterian minister and former Habitat committee member. Materially, though, the switch has left much to be desired. Although Habitat has raised his salary to $31,400, its skimpy benefits worry Larry and Agnes. The health coverage is adequate, but he has only $25,000 in life insurance and no retirement plan whatsoever. The couple can easily afford the $1,053-a-month payments on the $160,000 two-bedroom house they bought last summer with the help of Agnes' $41,150 compensation as an associate pastor at Atlanta's Central Presbyterian Church. But they had to drain their savings to cover $37,000 in up-front costs for the house, leaving them without a reserve just when they want to start a family. ''We're hoping this article shames Habitat into giving Larry a raise,'' says Agnes, only half-jokingly. Adds Larry, who, though soft-spoken, can be blunt: ''Next time I'll choose a job with better benefits. After all, I didn't take a vow of poverty.'' Though Larry's dedication goes beyond the norm, the career path he's chosen has become so common that a word has been coined to describe people like him. It's ''domo'' (pronounced doh-moh), which stands for downwardly mobile young professionals -- the increasingly applauded 1990s opposite of the widely despised greedy yuppies of the '80s. Domos jump off the fast track into occupations that, though less remunerative, are more satisfying, like opening a garden center, running a bed-and-breakfast or, as in Larry's case, tackling a stubborn social problem such as affordable housing for the poor. Nobody knows what proportion domos represent of the nine million Americans who change jobs voluntarily each year. But Neil Yeager, director of the University of Massachusetts' Adult Career Transition Program, believes their numbers are growing. ''Having proved that they can survive the corporate jungle, they decide the strain isn't worth it,'' he says. ''So they opt for more appealing work, despite the short-term drawbacks of reduced incomes and eroded savings.'' For Larry, though, the move not only cost money but disrupted a career he had prepared for since growing up with an older sister as the children of an equipment company service manager and a housewife -- both devout Methodists -- in tiny (pop. 18,000) Bluefield, W.Va. His mother Betty Lou describes her artistically precocious son as ''a happy child, always drawing, and very active in our church.'' She adds proudly, ''When he left in 1976 to study architecture at the University of Tennessee, I said, 'Don't drop your church work' -- and he never did.'' After graduating summa cum laude in 1981, Larry landed a $13,500-a-year apprenticeship at TVS, which is known for such mammoth projects as Atlanta's 2.5-million-square-foot Georgia World Congress Center. Three years later he received his license, and his career took off. ''Larry understood that the quality of architecture has nothing to do with size,'' remembers his supervisor, Jere Williams. ''That insight freed him to choose small-scale projects over megastructures, and he did a superb job with them.'' One of Larry's favorites is the sleek, two-story Anchor Glass Container building in Tampa; as project architect, he oversaw both its design and construction during a 10-month period in 1987 and '88. While he enjoyed the work and the expense-account trips, Larry found the pace wearing. ''When I was on the Tampa building, I'd take an early-bird plane down, be on-site all day and barely make my flight home,'' he says. But as the 1980s building boom accelerated, he adds, ''even the travel became a relief, because the deadlines at the office were so demanding. I was often assigned to a 'fast-track project,' which means it's being built before you finish designing it. You get very nervous about making mistakes.'' Around 1987, Larry began to lose his drive. As his mother noted, he had stayed active in church groups, singing in choirs, serving on budget committees, even remodeling a fellowship hall -- ''turning it from a dreary space into a bright, colorful room,'' one church member recalls approvingly. Then Larry met the West Virginia family who helped cement his decision to change his life. ''I was single, debt-free and had saved $20,000,'' he says. ''There would never be a better moment to make a sacrifice that could improve life for so many other people.'' Coincidentally, Atlanta's branch of Habitat was seeking an executive director. Like most of the 670-plus affiliates of the 15-year-old organization, it relied heavily on volunteers and part-timers. But the 35- member board wanted a full-time person at the helm. ''I saw the ad in a church bulletin and called to apply,'' Larry remembers. Habitat board members were surprised and delighted. ''I knew Larry through his church work,'' says Hal Clements, a retired high school principal who chaired the group's personnel committee. ''I warned him about the lower pay, but he replied, 'I'm getting to be a better architect but a poorer person.' '' Still, Larry accepted the post with some misgivings. ''I had no idea what an executive director does,'' he admits. Others also had doubts. Recalls Jere Williams: ''I was shocked when Larry left. We all respected him, and he didn't particularly want to walk away from architecture.'' Larry's parents too were baffled. While his mother is now reconciled to the change -- ''he's so much happier,'' she says -- his father Bernard grouses, ''We put out a lot of money for his education, maybe $25,000 in all, and I thought he should be using it. He's not wealthy, and neither am I.'' Once on the job, though, Larry found the triple tasks of administration, fund raising and recruiting volunteers too absorbing for second thoughts. He had been at Habitat only a couple of months when he met Agnes, who was on the committee that screens families to make sure they can qualify for mortgages. Yet his workload -- and hers -- left so little time for courting that two years passed before their March 1991 wedding. Even six months after the ceremony, their living room was still cluttered with unopened wedding presents. As much an activist as her husband, Norfleet is a sober, businesslike minister's daughter from Richmond who followed in her father's footsteps after two years as a county social worker in Charlotte, N.C. That experience equipped her to work at Central Presbyterian, a 750-member church where she runs a clinic, day-care center, pantry and shelter while still preaching the sermon once or twice a month. Trapped by their rushed schedules, the couple didn't get away for a proper honeymoon until last fall, when they took a 10-day road tour of the New England coast. The cost was $1,200, but that was a pittance compared with the real extravagance of their union: a fondness for eating out that drove 1991's food bill up to $9,000. While their work-heavy agendas were partly to blame, as late-marrying singles they were also accustomed to restaurant meals. Besides, their first home was Larry's $300-a-month apartment, and with such low housing costs, they felt less need to budget. But Larry was itchy to buy a house. ''I wanted a place of my own to work on that would be big enough for children someday,'' he says. So last summer, he and Agnes purchased a 65-year-old home -- seven rooms plus a two-room apartment in the back that they rent out for $400 a month -- in Morningside, an older district that young families are rejuvenating. Paying $32,000 down and $5,000 in closing costs,they took out a 30-year, $128,000 mortgage at a fixed 9.25% (''low at the time, though rates have fallen since,'' notes Larry ruefully). The purchase left them with just $5,000 in joint savings, invested in Oppenheimer Money-Market Fund (recent seven-day yield: 4.56%). Should a crisis wipe out that account, their only fallback would be Agnes' 260 shares of Coca- Cola Enterprises, recently worth $4,095 at $15.75 a share. Larry has 828 shares of TVS' private employee stock-ownership plan that were valued at $53,000 when he left the firm but have since dropped to $43,500 -- in part because of the national construction slump. Company rules forbid him to tap them until age 65, but federal regulations allow him to claim shares bought after 1986 within six years of leaving the firm, hence by 1994. ''I'd like to get them earlier, before they become worthless,'' he quips. Today the couple's main financial goals are, in order, to build a $12,000 emergency reserve that would cover three months' living expenses; to save $5,000 more to finance the cost of having the first of two hoped-for babies within the next two years; and to put aside money for their retirement. While his wife is accruing a pension that, given her current salary, would pay $15,000 in today's dollars when she reaches 65, Larry has only a $2,000 Individual Retirement Account stashed in a five-year bank certificate of deposit yielding 8.5%. ''It's key that we save,'' says Larry, who worries that home improvements such as painting and wallpapering could imperil their plan to do so. ''I know I'll want to spend on the house rather than send money to the bank.'' Larry could do both, of course, if he were still at a big architectural firm. By now he'd be making $50,000 -- 60% more than he does -- and in five years perhaps twice that, according to the American Institute of Architects. But with so little building going on, projects at many AIA-member firms have dropped 15% to 40% since 1990. ''So the reality is, I couldn't get an architectural job today,'' says Larry. Still, he denies any longing for his old trade. ''Someday I might work for a firm that specializes in low-cost housing,'' he says. ''But right now, I'm having a wonderful time at Habitat. And I'm living up to what I was taught in school: that an architect's job is to make the world better for everybody, not just for the clients.''

BOX: THE ADVICE

Doing Well While Doing Good The problems Building an emergency reserve, saving to start a family and amassing cash for retirement while allowing Larry to stay in nonprofit work

The solutions Get on a strict budget. Asked to review the couple's finances, two Atlanta certified financial planners, Barbara Naylor and George Hiller, who is also an attorney, recommended strongly that Larry and Agnes curtail their spending. ''A $9,000 yearly food bill is unacceptably high,'' Hiller said. ''You could cut 20% of that without pain by eating at home at least three nights a week. Add the $1,800 a year that you save to Larry's IRA, and shift the account to a high-growth, no-load equity mutual fund like Janus.'' The fund (800-525-8983) had a 20.3% average annual return in the five years to Jan. 1. Get Larry's distribution from TVS. Since the 828 shares in Larry's employee stock-ownership plan represent most of his capital, he should explore getting a distribution -- in cash -- of whatever the company is willing to give him. To avoid paying taxes, he should roll it over into an IRA. Take full deductions for your rental. When they pay their taxes this spring, Larry and Agnes should be sure to deduct a pro rata share of all expenses attributable to the rental unit as well as their property tax and mortgage interest. And they should write off depreciation, which Hiller calculated at $625 in 1991 (using the IRS' modified accelerated cost-recovery system depreciation schedule and a depreciable basis of $37,500, or 30% of $125,000, the value of the house minus the land) and $1,365 annually for the next 27 years. ''With those deductions and only $4,800 yearly rental income,'' said Hiller, ''you may have a tax loss that you could use to offset your salary and interest income.'' Invest for growth. The planners agreed that the couple should first put any cash raised from budgeting and tax breaks into their $5,000 money-market account until it reaches the $12,000 that could support them for three months. At that point, they should begin saving for longer-range goals like starting a family. They might start with a no-load equity index fund like Schwab 1000 (up 14.3% in the nine months to Jan. 1; 800-435-4000). Later they could diversify by adding the more aggressive no-load Dodge & Cox Stock Fund (up 13.3% on average in the past five years; 415-434-0311) or Fidelity Growth Company (3% load; up an annual average of 20% in the five years to Jan. 1; 800-544-8888). Still later they could build a fixed-income position by moving 35% of their stock fund holdings into a bond fund like the no-load Vanguard Fixed-Income Investment Grade Corporate Portfolio (up 10.2% on average in five years; 800-662-7447). Cash in Agnes' stock. Agnes should also consider unloading her 260 shares of Coca-Cola Enterprises, which has appreciated by only 75 cents a share since she bought it for $15 a share in 1988. She'll net $3,983 after paying an estimated $80 broker's fee and $32 in capital-gains tax. Buy more life insurance. Noting finally that Larry and Agnes are dependent on each other's income to meet living expenses, Hiller and Naylor pressed both of them to buy $500,000 of annual renewable term life insurance at a cost of about $500 each the first year.

Two months later, Larry found out that he could get all of his TVS shares, but only by proving he was the victim of financial hardship. Larry doubted he would be able to do so ''because our sole debt is the house,'' he said. The couple liked the idea of making their money grow in no-load mutual funds but were less than thrilled with the notion of buying life insurance. ''I was surprised the planners suggested that,'' said Larry, as Agnes nodded agreement. ''We have so little savings. Building them up seems the most urgent step.''

BOX: Seven Ways to Protect Your Finances When Making a Career Switch

Before you ditch your current job to seek happiness in a new career, here are seven moves you should make to help safeguard your financial well-being. -- Pay down debt, especially credit-card charges with high 18% to 20% interest rates. -- Build an emergency fund that will cover six to 12 months' living expenses. -- Develop a tight budget and stick to it, since your earnings will probably go down 30% to 50% initially. Eat out less, for example; skip expensive entertainment; keep your old car another year; postpone vacations; pay cash when possible. -- Start your business in your spare time if you will be self-employed. Work out of your house initially to keep the costs down. -- Roll over any retirement or profit-sharing money when you leave your employer into an Individual Retirement Account that lets you guide the investments. -- Don't forgo health insurance. If you're leaving a job that had coverage, federal rules may allow you to keep the policy for 18 months by paying the premium -- plus a 2% fee -- yourself. -- Don't burn your bridges. Stay on good terms with your former employer and colleagues so you'll have an escape route if the new career doesn't work out.

BOX: House-poor but proud

After three years of building homes for the poor, Larry Arney -- with wife Agnes Norfleet -- used up most of their savings to pay the $37,000 up-front costs of buying a $160,000 starter house last year.

INCOME Agnes' compensation $41,150 Withdrawal from savings 36,400 Larry's earnings 31,400 Interest and dividends 4,750 Rent 1,200 TOTAL $114,900

OUTGO House down payment and closing $37,000 Taxes 23,040 Food, clothes, utilities 14,700 Rent, mortgage 8,340 Car expenses 6,500 Contributions, dues, gifts 6,000 Recreation 5,300 Insurance 5,130 Household expenses 4,850 Agnes' pension 3,200 Miscellaneous 840 TOTAL $114,900

ASSETS House $160,000 Larry's ESOP 43,500 Personal property 11,500 Savings and checking 8,590 Agnes' pension 4,960 Agnes' stock 4,095 Larry's IRA 2,000 | TOTAL $234,645

LIABILITIES Mortgage $128,000 Credit-card balance 1,100 TOTAL $129,100 NET WORTH $105,545