The Low Stability of High Income

Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. — Charles Dickens, David Copperfield

Good old Chucky D. was a financial guru before it was cool.

My friends think I'm crazy. I earn mid 100s, live in a cheaper home, don't live it up, and shop at thrift stores.

This period of having high income is new to me. I used to be homeless, living in a truck, couch surfing, begging for money for food and gas.

I'm terrified of losing it all, so I'm doing my best to not put myself in a situation where if I lose my job I lose it all.

They're okay with rolling a $25,000 credit card debt from card to card to fund their life.

I still pick up pennies on the ground.

> how much could you conservatively make in a replacement job? If you set your current spending based on that level of income

I didn't love the numbers in the article -- they assume $500k total comp, but the levels.fyi heatmap from a few days ago shows SFBA median total comp is $263k, with 64% being base so $169k. Federal taxes are 64k, state taxes are 21k. That leaves you with maybe ~$80k in liquid salary.

A market-rate studio apartment is $2700-$3000/mo which is about $36k in annual expense. That's about half of your income. Add food and transportation and there's not much left to save for retirement or emergency fund.

If for some reason you are in the lurch and have to start driving ubers or working at starbucks, you're not going to be able to afford the same kind of apartment that you need to do hybrid work and join meetings at a FAANG job.

Yes, this is quite true and one of the reasons I left trying to find a job and start my own business. With the business you actually have control over your life. And now I crossed more than I could have ever gotten as a salary by doing my own thing.

Looking back at my live, this is so applicable, and it's interesting to finally understand why. The main issue is that it's typically harder to secure a high-paying job, and the fact that one has it now doesn't mean that if the project/job ends, it will be as easy to get the same level of compensation. I've always been able to feel this instinctually, but have never been able to pin it down exactly.

RSUs and other vesting should be (as in, it would be nice if they did) prorated in the event of a layoff (assuming layoff here means no-fault separation).