About 13 years ago, I started my first job at MegaCorp. It was an exciting time. Lots of hard work, but MegaCorp came with a good salary, supplemental stock vesting, and some really nice benefits, like a 50% 401K match, and much more.
Now, if you’ve ever worked at a MegaCorp (or anywhere these days, really), you know there is a price for the perks. There can be an immense amount of external pressure to perform (whether it’s numerical attainment or project work), with frequent 1-on-1’s with your manager, seemingly limitless self promotion from peers, quarterly or annually “360 degree” performance reviews, and the perpetual promotional carrot dangling in front of you. It doesn’t matter what your history has been, if you have 2 comparatively lackluster quarters in a row, it’s impossible not to feel the heat.
Aside from that corporate productivity machinery, there can also be at least an equally immense amount of internal pressure that you put on yourself. You can be your own harshest critic and imposter syndrome is very real. And if you’re not getting ahead, you begin to feel like you’re falling behind. This pushes you to work more and more hours.
But having spent a few years prior at a significantly lower paying non-profit, I recognized the comparative windfall for what it was: something that should not be taken for granted.
And as I started this website and really dug in to personal financial numbers, I began to realize that there was a unique opportunity in front of my colleagues and me. I had also seen the research showing that the first decade of lifetime earnings is the most important. Once you get into your 40’s, your earning power often plateaus and even declines.
So, out of love, I have warned as many friends as would listen (and many who wouldn’t): “DON’T BLOW THIS. Save as much as you can while you can!”. And, I heeded my own advice. I personally boosted my annual personal savings rate into the 80, 90%+ territory.
All these years later, not as many listened as I would have hoped for. And I take no joy in stating that my intuition was right. Sadly, a number of those friends hit a wall and started dropping like flies. Just a small sample…
Friend #1: was fired after about 10 years at MegaCorp, without warning. I don’t know if he really got a good explanation as to why, but he did hit age 40, and had a growing family. Productivity can often decline with age, as your life priorities change. And MegaCorps know this. Since, he has bounced around to 3 different jobs, each making less than he was at MegaCorp.
Friend #2: after 13 years of being a top performer, moved into a new role that he thought he would be in for another decade. 2 years later, I sent him a message, only to find that he had vanished from the company records. A later text revealed that he had never been so stressed in his life and couldn’t take it anymore. Now, he’s jobless, with a wife, kids, and a massive mortgage.
Friend #3: voluntarily left the company a few years ago, tried to get back in, couldn’t, and has struggled in a few different lower paying roles since. He called me a few weeks ago, asking if he should take out a 401K loan in favor of paying off credit card debt to help get his head back above water.
Friend #4: had health issues and felt pressured to quit (and did).
Friend #5: after making it into management, began to sour on the experience, wishing that he had stayed as an individual contributor. He hit the burnout wall and voluntarily quit. Thankfully, Friend #5 saved up enough to afford himself many years off.
Me: And then there’s my story. Last summer, I ran into a forced job relocation scenario, turned it down, and transitioned to a temporary role. Major update on that coming soon…
Everyone: then, there’s COVID, and an employer penchant to cut payroll.
Here’s the lesson in all of this: your employer isn’t your friend. Your employer isn’t your savior. Your stay at any given employer isn’t indefinite. Your employment is a time-limited transactional relationship, with you trading your time and skills for money. Fully capitalize on the transactional opportunity while you can, by saving as much as you can, because you don’t know how long the opportunity will last. It’s not all about the money, of course. You should continue to strive for great things that aren’t money, and invest in yourself, relationships, your future, and in all of the warm and fuzzy aspects of working with others. But, don’t lose sight of the biggest reason that you are there – to support you and your family’s current and future financial needs.
That may sound cynical, but it’s the harsh reality of our productivity-addicted, profit-motive obsessed, capitalistic machine. In addition to my anecdotal stories above, see the current unemployment numbers for all of the evidence that you need. The quicker you internalize this dynamic, the better off you will be. There is rarely “catching up later”. Stuff happens. Transactions end. Safety nets don’t last forever. Often, our futures veer into paths that we could not predict. And there are no guarantees that our financial situations will improve on our new paths.
It’s easy to get trapped by what I’ve called the Good Times Paradox, where we see our current good fortune as indefinite. But whether it’s new family obligations, change in mental or physical health, change in managers, change in responsibilities, change in culture, micro-economic change, macroeconomic change, change in profitability, change in business viability, a major recession prompted by a global pandemic, or hundreds of other possibilities – change is inevitable.
The only thing that is certain is what you’re making and saving right now, and much of personal finance is luck coinciding with your hard work. Good luck, sadly, doesn’t last forever. So, I will repeat my oft-repeated advice yet again: save as much as you can while you can. You’ll thank yourself later.
Well said. This is an extremely important perspective that everyone needs to hear!
Especially in these uncertain times, Doug. We can’t always count on our future to play out as expected, which is why we have to take advantage of the high-yielding opportunities in front of us, while we have them.
Excellent Article! Your words resonated so well with me. I am learning that effective planning, ownership, simplicity and resilience is my game plan when it comes to work, health and life in general. I was at a company for nearly 9 years, worked my a$$ off, made it to management, looking to jump to the next opportunity when I had to part ways with the company, in the middle of a great trajectory upward. It hurt personally, cause I sacrificed so much of myself and my identity on the company, wanting the company to succeed, hoping I would continue to do well. I am a Pharmacist and the daily tasks associated with the job bored me and was completely outside of my values, but I am good at what I do, and earned $$. Ironically, I think managing chronic disease is futile and we should focus on optimizing health and wellness, beginning with lifestyle. Chronic disease is a billion dollar industry. But I digress. It actually became stressful compromising my values to do well, while trying not to lose focus on what really mattered to me. Fortunately, we were on top of our game financially and leaving my earning$$, only caused us to take a few more years to pay off our home, and cost me my pride since I identified so much with the company. For what its worth, I am doing great now, using emerging opportunities to create, promote the optimization of health–not manage chronic disease, be true to my values, experience and education. It’s taken time to get to this place and I am still a work in progress. However, that effective planning, ownership, simplicity and resilience have been key.
Thank you for sharing your redeeming story, Audra.
Great article. Having F-you money is more important than ever. I preach that to my friends/family on a constant basis but the pressure to spend every dime on crap is too powerful. Financial instability is at an all-time high and people can’t rely on Uncle Same to take care of them. We control our financial destiny. Unfortunately, millions of Americans don’t get it.
F-You money is certainly another way to rephrase this article, haha.
Thanks for the great advice! I’m 19 years old and currently in undergrad and will be attending medical school after I graduate. This was definitely an eye-opener and I will have to keep this in mind as I move through different jobs throughout my life.