What do laid off bankers do when the severance runs out? | Hacker News Reader

What do laid off bankers do when the severance runs out?

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11 pointscwan21 comments

Interesting psychological twist at the end of the article, where this guy says he considers it more risky to take an offered job than whittle through savings. I'm amazed at his expectation that an employer would guarantee severance pay on hire. Ditto for the wife's complaints that she can't find an employer who will "accommodate her schedule with the children". Can't her unemployed husband take care of them?

You're never in a stronger negotiating position than after they've offered and before you've accepted.

And yeah, the wife's living in cloud cuckoo land.

Look at it this way: if I'm unemployed but I can get a $100K job, and I get an offer for a $75K job, I'm leaving $25K on the table--not just a one-time loss but a permanent reduction in income. If another month of job-searching, burning through another $7500 of savings, will get me a $100K or at least a $90K offer, then it is perfectly rational to turn down the $100K offer.

A banker ought to understand a "stop-loss" tho'.

...except experience has shown him that he cannot get a $100K job (he has been jobless for a year - and that is a recurring theme in the article). In reality he is leaving $75K on the table by not taking the job.

Early in my career my wife and I were very aggressive savers. We lived a fair bit below our means.

The day after my first layoff we sat down to look at what the new budget would look like. The first thing to go was all of our investment and money market contributions. Completely painless.

The lesson I learned is that the best part of saving for a rainy day isn't the nest egg you build up, it's the flexibility you gain from having a nice amount of surplus cash flow.

Or, when looking at your cash, it's not the constant that matters, it's the first derivative. (and maybe the second)

> What do laid off bankers do when the severance runs out?

I figured they were money experts and could work this out for themselves.

Ummmmm, it looks like that is exactly why they were laid off. The whole article is made up of stories of "money people" full of hubris who have no clue how to manage their own money.

Well, not really. Most of them do (did) have savings for example. What they don't know how to do is adapt to a new reality.

The article wasn't just about bankers, but it seems some of them are no more fiscally responsible with their own money than they were with others'. Only after personally crashing and burning have some of them learned.

Makes me wonder what, if anything, the bailed-out banks learned...

This might be splitting hairs, but why do people insist on going out for coffee? It's way cheaper to make at home with a $20 coffee maker. The price per cup is cheaper, you don't need to leave the house, and it is little to no work at all.

For me, the point of going out for coffee is not the coffee part, but the going out part.

You clearly haven't got sucked into the "I need a $500 grinder to go with my $2500 espresso machine at home" and the $60/kg coffee beans that you throw the leftovers out after a week or so 'cause they're stale already...

(I seriously looked up how much a kidney would sell for when I first saw a $12,000 Speedster Espresso machine at one of my local roaster/cafes...)

I wonder if CEO cocaine addicts think snorting using hundreds gives you a better high than using paper?

You might need one of these bad boys:

http://www.nespresso.com

I can't speak from personal experience, but I've heard many good things.

The main takeaway for me is that people forget how to be frugal. Hopefully I'll leave grad school having learned more than just CS - given how I spend these days, I can't imagine ever blowing that kind of cash while unemployed.

A lot of people never learn it in the first place.

Well, it's more complicated than that. The thing people fear most is the destruction of their self-image: finding out they are not who they thought they were, or everyone finding out that they aren't. Most times when you see someone do something that's utterly inexplicable given the facts - like, having no income but continuing to spend frivolously - this is the mechanism in action. The "executive" has come to associate themselves with the physical trappings of success - the car, the suits, the watch, and so on. Letting go means admitting failure, means admitting that their life was just a facade.

It may sound shallow, but it's not an entirely negative thing. A fireman enters a burning building, he's afraid sure, but his self-identity is the hero, he's not going to back down, he's more afraid of the shame.

Makes sense, and I agree that there are utilitarian benefits (e.g. firemen), but it's a pretty shallow life. Maybe it's because I define myself more by my thoughts and values than my actions, but I can't imagine questioning my identity because I got laid off.

It's not a matter of skipping Starbucks, buying clothes from a department store, and having a "staycation". When you're paying $3000/mo for your mortgage, $1000/mo on school tuition, $800/mo on your car lease, etc. you can't cut your expenses without making major changes. And, if you expect to get a job in the next few months, it doesn't make sense to move to a bad neighborhood, transfer to public school, and buy a used car.

I have a hard time giving a shit about these people. With so many being fired with no severance and no safety net at all, who were paid such paltry wages that they have little or no savings.

The first guy started with $300,000. Even without finding a new job, he could have paid himself a $50,000 / year salary for 6 years, $100,000 / year for 3 years.

Were do I sign up to get $100,000 / year for the next 3 years without having to work?

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