Seriously. I wouldn’t be surprised if the lowest total comp was in excess of $200k/year. If you can’t have 6 months in cash sitting in a high yield savings account on that, there’s no amount of severance that will help you.
Your company stock is an investment that is part of your compensation.
Your retirement account has (mostly) investments, at least in the US.
Your brokerage account has investments investments.
Any investment advisor will tell you that all investments have risk. There's an upside, and there's a downside to every stock. Anyone who remembers the Dot-com bust will remember that.
I think sympathy and compassion are fine ideals to hold for any of our working class cohort.
“Working class” lol. Class-wise, engineers are like the junior executives in the Mad Men era, or junior lawyers and bankers today. They are not only well compensated, but have tons of impact (and therefore leverage) as individual contributors.
The “working class” are the folks cleaning the building who are fungible commodities. You can be a 10x janitor and it won’t give you any leverage in the organization, and you have no pathway to upward mobility in the executive ranks.
Anyone who relies on wage labor for their income (as opposed to earnings from capital) is working class. That is the defining feature of the working class.
Unless you could retire tomorrow and support yourself from your capital holdings alone, you're a member of the working class. (Many engineers at Twitter likely could retire tomorrow and live off their equity, but I'm guessing the majority could not.)
People love to erode class solidarity by claiming that only people whose incomes are below a certain level are working class, or that you have to "work with your hands" to be working class. Don't fall for it.
Since when is that the definition? Doctors and lawyers have never been considered part of the "working class." Software engineers, and other categories of jobs that didn't really exist in the 1930s, are more similar to those professionals than to working class people.
> People love to erode class solidarity by claiming that only people whose incomes are below a certain level are working class
You've got it exactly backward. The top 10% has been pulling away from the median American for decades now. They're beneficiaries of the same forces that have produced outsized growth for the top 0.1%. They write the software, paper the deals, put together the PowerPoint presentations, etc., that enable those trends.
The delusion among skilled professionals that they are part of the "working class," and their influx into the putatively labor-aligned political party, has had a tremendously negative effect on working class interests. They champion policies like globalization and mass immigration that benefit them at the expense of factory and farm workers. They spent divert vast amounts of political capital to social issues important to highly educated people, at the expense of economic issues important to the working class. And they make it impossible to pay for expansive social services the way other developed countries pay for them: by heavily taxing the upper middle class.
[0] https://en.wikipedia.org/wiki/Working_class#Marxist_definiti...
In Marx's dichotomy, ownership of the means of production is critical because workers are utterly dependent on that capital to be able to produce anything. That's not true of knowledge workers. A programmer, like a doctor or a lawyer, isn't dependent on a capital owner to produce the thing they sell.
Financial literacy is something that desperately needs to be part of the curriculum in high school and I can empathize with people that will struggle as a result of their layoffs even if it's due to their own money mismanagement, but software engineers being laid off from a tech giant are definitely not working class in any sense.
Put another way, people will behave as you treat them. Treat them like they are fools who can't do finances and they will behave that way. Expect them to do basic financial behavior and they will.
We literally make financial literacy courses free, online, without any need to even sign up. They will teach you what a bank is all the way up to 401k basics.
If someone is making $200,000 a year and is financial trouble when they get laid off (with severance), well, I reserve my tears for people who never see that kind of income their entire life.
The PersonalFinance Wiki for the /r/PersonalFinance subreddit is actually very nice and covers a lot of common situations: https://www.reddit.com/r/personalfinance/wiki/commontopics
Investopedia maintains an excellent and well written dictionary on financial terms, with a mix of articles. I use this website heavily: https://www.investopedia.com/financial-term-dictionary-47697... They have a personal wealth section here: https://www.investopedia.com/personal-finance-4427760 and a good place to start is: https://www.investopedia.com/articles/pf/09/financial-respon...
If you want a software aid, YNAB is pretty good and is based on a solid set of principles. https://www.youneedabudget.com/the-four-rules/ Obviously lots of other options exist to manage your money and YNAB is not the only option, but it's a good one.
If a resource suggests any kind of particular stock picks, crypto or other "investments", it's bad. It exists to sell you a product.
Save money from each paycheck. If you're just starting, put this into an emergency fund (savings account) until you have 6 month's take-home pay saved.
Then start savings in equities. You should diversify this, i.e. in low-fee index funds. Do this in an IRA or other tax-advantaged plan your employer might offer. Don't watch this too closely or try to time the market. Just invest with every paycheck.
Understand the time value of money. Don't go into long term debt for short term needs or consumables. Live below your means so you can save more and maximize compounding gains in savings/investments.
Do these things and you are well ahead of most people. If you want to get more sophisticated at that point, look for courses or professional advice, but remember pros rarely beat the market.
That's not how adulthood works. The world doesn't care if you learned it nor will it teach you. Besides, it doesn't take a course in finance to understand basic financial responsibility.
Adults can teach themselves most things given the right tools and incentive. Your viewpoint essentially means nothing is ever problematic ever. Invasive rhinos released onto SF streets causing property damage? Why didn't SF residents learn to defend themselves and their property damage. The world doesn't care if you learn or not. Climate change leading to drought and the entire world is starving? Should have done a little thinking ahead and stockpiled food.
Despite the creativity of your rhinos scenarios, the point still stands. Somebody that did proper financial planning would be better equipped to cover the property damage.
And yes, you very much should stockpile food. I have 6 months worth, and adding. I hope you're right and I turn out to the paranoid one, that would be best for the world. But just to give a hint: where I live protesting farmers led to some empty shelves. Nothing existential, but just to share how very quickly such a thing happens and how close it was to a more serious issue. Or, perhaps consider the entirety of Eastern Africa about to face a possible famine. Or, consider Sri Lanka being totally fucked.
I don't say this to hate or judge, I say it to help. Take care of your shit, this world is volatile.
Half my coworkers lack these basic skills and they drive around in $100k Teslas.
The guy can't even make coffee at home or a sandwich. Never had to do it. They are true man-childs.
It’s also not clear that Twitter would be able to block sales once you are no longer an employee; my guess is that they can’t.
Financial literacy is quite literally adding and subtracting numbers. For somebody who gets in to FAANG sort of companies with mad algorithm skills. This sort of things are a cake walk. Financial Literacy applies to people who just didn't get any education. We are talking of people who can't even read and write.
A volatile but oversized emergency fund is not horrible. Especially if the estimated chance of needing it is low.
Worried about medical emergencies? Emergency fund in equities isn't terrible. But if your emergency fund is supposed to support you after getting laid off due to an economic downturn, your emergency fund is going to be a lot smaller than it was right before the emergency. And if your emergency fund is in the stock of the same company that you work at, you're opening yourself up to just not having an emergency fund in the worst-case scenario that your company outright goes under.
edit: over the past 6 months. so the duration of this process
The employees can't sell these until the blackout is lifted. Currently there is no end date set.
Edit: Per below comment, don't do this :)
If you could find someone to lend you cash (based on the totality of your financial situation and personal credit), that's fine. It's not fine to borrow someone else's shares and short them during a blackout.
Do they contain penalty provisions beyond getting fired? They're meant to protect both the company and the people from the slightest risk of insider trading allegations, so in most cases violating the policies isn't actually illegal insider trading.
If you have MNPI you can't buy or sell anything, including stocks or options, even if you don't work for the company.
Even ignoring this, there are thousands of situations where layoff + stock blackout can be financially devastating even for people with "well off" jobs. The entire reason it's recommended to keep a 3-6 month emergency fund is for emergencies - surprise medical costs + reduced pay on disability if you get cancer/car accident/etc. or struggling with a dip in household income from a spouse losing their job during a second-in-two-years recession. If one of those happens to you and _then_ you're laid off, you'd probably be more sympathetic.
Over half the U.S. lives paycheck to paycheck. It doesn't require a ton of imagination to envision why even people living in the bay area working at Twitter might be in dire economic circumstances after a layoff and stock blackout.
[1] https://www.wsj.com/articles/twitter-lays-off-third-of-talen...
Assuming that $200k in total comp includes about 25% in stock (based off publicly reported comp packages for twitter employees), and a combined state/federal 35% tax rate... They have no spare money to save without a second income with $97,500 in take home pay.
It’s <someone else’s> fault I couldn’t save anything with 3.5x the median household income.
'Low income' is defined as a household income of 80% of the median ($166K), depending on household size. $150K only meets that for a family size >= 4. There's also 'very low' (50% median) and extremely low (~35% median.)
I got the hell out of the Bay as soon as I could and would definitely never choose to live there with a family.
That's like 3-4 months of post-tax pay for a twitter engineer (and not a senior one at all). Yeah, i would expect them to be able to have that much in savings.
If someone cant accumulate roughly 15% of their annual compensation in savings, while earning $200-400k/yr, then I have no idea what else could be done here to help.
The thing with those crazy Valley salaries that you hear about here is that a lot of the time a good amount is in the form of stock that vests on a rolling basis. So maybe you get $150K in cash and $75K in stock. After 401k, California and federal taxes, California housing costs, and California <everything costs>, I can understand how someone making “$225K” in the Valley might not be able to save a whole lot.
This doesn't make any sense. Yes, your stock "vests on a rolling basis" the same way your salary "vests" every two weeks.
If you are making 150k in cash and 75k in stock, then you get access to 225k (minus tax) of liquid cash every year. The vesting schedule is irrelevant.
Should people be more disciplined? Isn't it possible to do better? Sure, totally. But let's start with reality and not boomer bootstrap fan fiction.
I'm from the Netherlands, known for its comparatively poor pay for engineers as well as high costs of living.
Despite that, from day 1, when my salary was at its lowest and I was still single, I saved 25% of my salary. A lot of years later and no longer single, I've build up multiple years in savings. Even more than that if I add my spouse. And the funny thing is that the need to do this applies less here, as unemployment benefits are relatively generous.
It just shows the dramatic difference in culture. I'm shocked how even the best paid engineers can't even manage to save 30K. 30K...are you kidding me? A single event or large expense (construction at house, car breaks down) would bankrupt you. And if your cost of living is so enormous, what the hell does 30k even do during unemployment?
If I'd earned 200K+, I'd save so hard and retire 20 years early. The US has such a spending culture.
Many who get a high-paying job at the beginning spend to the limit of their income and then some. Very sad.
"I have a mortgage on a house" tells you essentially nothing about a person's finances, how they financed the house, their assets, their monthly expenses or their debt-to-income ratio.
Some people might have put 20% down, avoided PMI, have no other debt and only put down 20% because they wanted to hold onto cash. They had a good credit score, and got a reasonable interest rate.
Others may have utilized any one of a number of loan programs to put down > 5%, which they financed through loans from family, or emptying their 401K, got a not great rate, have PMI, have student loans on top of that, a healthcare debt, etc.
You have zero information beyond "well, they have a house."
Nobody is forcing them to live in SF, especially not Twitter.
[0]https://treasurydirect.gov/indiv/products/prod_ibonds_glance...
However, if one wants to hold a portion of bonds and a sub-portion of said bonds happen to be I-Bonds, then I see no issues with that.
Nonetheless, the point is more that: you need risk-free cash to live sometimes, keeping 6 months of your current costs in a low-risk account is pretty base levels of financial literacy
Other people in this thread are talking about what I understand to be hypothetical engineers with 400k compensation, and it sounds like that doesn't describe this situation.
https://www.glassdoor.com/Salary/Twitter-Recruiter-Salaries-... https://sfmohcd.org/sites/default/files/Documents/MOH/BMR%20...
- I think in general _recruiters_ are not on H1Bs. And even for jobs held by people who _are_ on H1Bs, that can be a biased data source for salaries.
- And sure enough of the info for twitter H1Bs, I see no recruiters. Plenty of engineers, a bunch of data scientists, some managers and directors, but no recruiters. https://h1bdata.info/index.php?em=Twitter+Inc&job=&city=&yea...
I never made that much in my entire career. HCOL is pretty crazy, out there.
I wish them well.
I wouldn't bet on them being able to get new jobs as quickly as people think. It seems that every tech company is hemorrhaging jobs.
So you live like a poor person does until you've saved up enough money to deal with emergencies. Then you can live the lifestyle you desire.
It's what people have done for generations and generations. This isn't rocket science.
I dont know of any over 2%
I have a lot of sympathy for someone who’s plan for savings was “if I get fired I can”: (1) use my severance money (2) sell my stock (3) get a loan against my home
Only blackout periods blocked (2) and falling home prices blocked (3).
But you do you, bitcoinmoney.
Even the slowest companies take 2-3 months to get an offer. Maybe it takes you a month without a job to be interview ready.
Honestly, the vast majority of people would be better off taking a month of work to prepare for interview full time to get a better job...