I was successfully freelancing and doing quite well in 1999 and 2000, and it was pretty interesting watching the wheels all come off in 2001. Here's a very subjective idea of what it felt like to me:

- The bubble "burst" over about 9 months in the greater Boston area, give or take.

- For about 3 months, it was nearly impossible to get hired no matter how good you were. Everyone was laying off solid senior engineers with tons of in-house knowledge, so why would they hire?

- The area immediately around Boston recovered slowly, because there were just too many unemployed engineers.

- My ~23yo friend who held $250,000 of stock watched it drop to almost nothing during his post-IPO handcuff period.

- Any company which sold to startups, or which sold to companies which sold to startups, etc., pretty much died horribly. Huge, successful, awesome companies just evaporated.

I was young and single, so I simply skipped out of the "blast zone" around Boston, waited a few months, and started applying to cool, small shops in second or third-tier cities that didn't have a huge number of unemployed programmers. Got a good job, had fun, got a bunch of raises, etc.

The financial advice in the other comments is good. Make sure you have a year's cushion if you can. If you're good, you love programming, and you can relocate, you can ride out a lot. Plenty of interesting small companies are unable to hire in this market, and most will be around post-crash. Take a salary cut, get an interesting job, and help somebody make some money.

If you are a young/new engineer in a bubble you should recognize that excess salary is a function of the bubble, not your actual value. To that end bank as much excess salary as you can, (keep your personal burn rate low) and don't set your internal 'value meter' by a company that so desperately needed engineers they over paid for them.

I saw several engineers in the dot-com crush, graduate, work for a year at some BigCorp, then go to work for a startup as "Chief Architect" or some other vaulted title, lose their job when the crash hit, and then found themselves unemployable at some really vaulted title and salary because they really only had 3 - 4 years experience and it wasn't all that broad. That was sad to watch. Don't be that engineer if this is another bubble.

As an employee you have fairly little to lose if you play your cards right. That's the benefit of the employer-employee relationship and being compensated primarily in wages.

So my advice is to ride the bubble because the inflated salaries and other compensation are good for you, but be mindful of what might happen if the bubble pops. If it's bad enough, you might be left unemployed with very few job prospects for a period of time. Don't inflate your lifestyle, and use the opportunity to build up a large savings account. If the bubble pops, that'll tide you over for a long period of unemployment until the job market recovers or give you breathing room where you can pivot your career.

If all this talk about bubbles turns out to be just fear-mongering and it doesn't pop in the end, it's still money in your pocket you can use to bootstrap your own company or eventually retire on.

The worst things to do are to spend all the money you have, or invest it in bubbled assets that might evaporate.

There's an easy heuristic here. Look at a segment of the industry which is unambiguously not in a bubble and ask yourself whether you could get hired there doing similar work with a similar salary.

There's one hitch here: if the entire startup scene were to bust, there'd be a massive excess of developers vying for the traditional stable jobs at traditional profitable companies. This would significantly raise the bar for getting hired while potentially lowering salaries.

Sell shovels.

Basically, if it is a bubble then you can expect that your salary will go down or you will suffer a period of unemployment or both. Don't take on extra debt now (like buying an extra fancy house on a giant mortgage) that will trap you later.