I came across a recent article on The Straits Times, of an individual losing his high paying job at the age of 48.
It seems that previously, he was a high-flyer in the banking industry and was drawing about $14,000 a month (I think that might have been exclusive of bonus, but even if it might had included the bonus component, it is still freaking a lot of money!).
After getting retrenched, he tried to look for another job which he was hired into, but unfortunately, was subsequently let go as well. He tried to look for other jobs since, but it seemed like potential employers were unwilling to employ him (or perhaps skeptical to do so), understandably so perhaps due to his age, or other misgivings such as his ability to adapt and learning from the scratch.
Whenever I read such stories, I feel bad for these individuals. It’s not an easy situation to be in, especially for someone at his age. In fact, we have been reading plenty of reports of late where it is getting harder for PMETs to find another job after being retrenched. During the recent Budget, the government even had to step in to render help to this group.
At the same time, I tend to think that perhaps this might be a self-destruction path that they had set out for themselves?
What kind of logic is that, you might ask. Who would want to get themselves retrenched? How could I say that this is self-destruction?
Well, I didn’t mean it literally. I had meant that at the age of 48, feeling helpless that you are not able to secure another job (to pay the bills I presume) despite having drawn a healthy salary for the last decade or more (well the salary might have increased steadily over a couple of years or decades to reach that level but I believe that the total amount amassed is still very much significant).
What if he had exercised some financial prudence?
What if he had chosen to save up a bulk of his salary?
What if he had chosen to invest some of those money and built up a retirement nest or portfolio instead?
What if he hadn’t splurge on that Audi or Porshe just a couple of years ago?
What if he had not buy his wife that Hermes Birkin bag that cost $20,000?
What if he had not chosen to dine at expensive restaurants every weekend with his family?
(I know I am making a lot of assumptions here. He might not have engaged in any of those activities above. But generally, you get the flow.)
Would he have been in a different position?
That is very likely. Well, I meant that he would probably have gotten retrenched. But he probably would not be fretting around feeling desperate.
This is a common problem.
And it is affecting the educated and affluent.
The more we earn, the more we spend – that is lifestyle inflation.
It’s not wrong to spend your own hard-earned money. It’s perfectly legitimate to do so.
Call me a skeptic, but I tend to think about what will happen if either Dave or I might lose our jobs someday. Whichever financial decision we make (obviously the bigger ones), we always ask ourselves whether we will be comfortable in the scenario that one of us loses our job.
We have a mortgage to service. We also have a kid to raise. And there’s also our aging parents.
What is going to happen then?
Well, for now, we are not that concerned. We do not have a huge portfolio built up yet, but with our expenditure and frugality combined, we know that we are able to get by, even with just one stream of income from either of us at this point in time. Yes, we might not be able to afford certain luxuries then, like overseas trips, but really, that’s not the key issue is it?
As the old adage goes, “Saving up for a rainy day”.
I would go so far to say “Saving up for jobless days”. That would perhaps open up some new perspectives.