A buddy of mine sent me a link yesterday to a USA today article published on December 3, 2010 titled “Executives slip down the corporate ladder – Economy has forced many into taking jobs a few rungs lower”
I could’ve predicted the rest of the story like I mostly do after reading headlines, but for some odd reason I went into reading the article in its entirety – something I RARELY do.
The article stated the basics as expected. More economic doom, job loss data piling higher and executives slipping down the corporate ladder working in lower positions that pay much less.
The particular exec highlighted in the article used to travel the world and close on $500M mortgage deals. Now he is closing $400K deals.
Because of what I have been through in my life, have experienced and have witnessed around me, I have a VERY soft spot for individuals and their families who are impacted by economic slowdowns, job losses and other unfortunate events.
In reading the article however, instead of being thankful for what they have (A JOB which many don’t), these executives appeared to be unreasonable about what they are having to go through. Wow…what morons.
Here is what absolutely KILLED me half-way into this article. The executive mentions that because of his situation, he is now having to skip lunches and order take out from the deli. So? What is wrong with that? Do you realize how many don’t have even that much going for them?
An executive first of all should never be in that situation to begin with. I don’t care if you are an executive of a fortune 500 company or the local car garage, getting to such a level requires consistent above average performance over the years that comes with an above average paycheck as well.
To me all this boils down to the basic fundamental lack of financial discipline, a void that our education system consistently leaves us with year after year. But even then, there are absolutely NO excuse here.
There are tons of financial blogs to fill the void! There are tons of finance guru celebrities like Dave Ramsey and Suze Orman preaching the same thing from episode to episode, book to book, to drive the same point into our heads.
It just comes down to our lack of desire to tune in, and take the initiative to learn what schools don’t teach us and implement the knowledge into our lives. There is no doubt that those that do come out on top.
If an executive can learn a complex business inside out to be leading it, he or she can learn basic personal finance as well. If not, they are simply ignorant, stupid or dumb.
The combination of savings and a cut down in lifestyle should compensate for unforeseen unfortunate events such as a job loss or demotion, especially for executives who SHOULD have a solid contingency plan in place. But no, they decide to buy a million dollar home, 3 cars, a boat and a couple vacation homes instead.
Lord save me . . . the behavior of some of the highest earning individuals confuses me. I just don’t understand sometimes.
Here is an idea – get off the couch and start a side business in your spare time. Not all of us are executives, and therefore the impact of economic slowdowns likely mean more to us compared to executives of larger firms.
One good contingency plan option is to establish a profitable side business in your spare time. This doesn’t mean you quit your full time job. Rather, you can run your business in parallel to your profession.
Economic slowdowns in the unpredictable world that we live in today make it that much important to have a solid back-up plan in place. Better yet, establishing multiple streams of income on the side can be the perfect safety net in the event fate decides to play games with you.
A safety net built on the side not only gives you more financial abundance, but also more comfort and peace of mind while you focus and grow in your profession without worrying “what if”.
What about you, do you have a safety net in place? Do you have a back-up plan?
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The execs are used to the inflated lifestyle. It’s too bad they didn’t just pay off their debt when they had the resources. The HSBC COO was making 400k a year and he couldn’t pay off his 1 million dollar house?
It sounds like many of them are making their way back though, a hard working ambitious person will be rewarded.
That’s just so sad isn’t it? Of course half went to Sam and he probably spent 60%+ of the remaining 200k to run his household and their lavish lifestyles, leaving very little to pay the balance on the $1M home.
That’s the reason I started my blog. I wanted to add an extra income stream, plus gain the experience of running my own business even if it is an online one. I have learned the value of a dollar and do my best to pay for everything in cash.
I agree that the education system does a horrendous job of preparing students for the “real world”. Maybe it is by design, a truly educated person is a dangerous one.
Justin,
I am very curious about your comment: “I agree that the education system does a horrendous job of preparing students for the “real world”. Maybe it is by design”.
Is there a particular reason / experience that makes you think / question as such?
basic fundamental lack of financial discipline,” a void that our education system consistently leaves us with year after year.” I am replying to your comment about the void that our education has created.
From my experience of school, I did not learn much practical, useful, knowledge. I learned how to recite what I was told by a teacher and not how to think for myself.
In the State of Maryland where I live, the emphasis is on passing exams so that the state can receive money from the Federal Government.
I have a cousin who is a teacher, she said that school is a place to watch your kids so that the parents can work.
Being fiscally responsible is not well taught in public school, if I were a banker I would prefer it that way.
I didn’t get my real education until I left school and began working for a living. Many lessons on being responsible with the self and with money were learned.
This is my unique perspective and experience and may not represent everyone.
There is a lot of truth to what you wrote Justin. I agree in many ways. I know some programs today in high school where kids are being taught basic personal finance. I hope this becomes part of the curricula throughout school and throughout the country.
I noticed that you went to College at Michigan. I was only referring to basic education and not higher learning institutions like Universities.
It is still the job of parents and family to teach their children the basics of life. Thanks Sunlil for your reply.
Yes I too meant basic education. There are some programs in some high schools that teach kids basic finance, which is great. I wished more institutions did this.
I do agree with you that it is the parents’ responsibility to educate their children about the basic necessities in life, such as personal finance. Many parents don’t do so, often because they fear they don’t know enough about the topic, but perhaps this will motivate them to read up and learn themselves so that they can pass on the lessons learned to their children.
Hi, Sunil,
This article is a food for thought. The challenge most of us have is working and making money without reserve for tomorrow. You can simply save money for precautionary motive…and for investment but we more often than not get carried away.
There is this case where a man was retired from oil company he had put about 18 years of services. When he retired, for the first three months, he tried to maintain his earlier consumption pattern. And this actually impacted on his savings…and this gets to a level that his saving become red. He develop hypertension and died. It was later realized that all his working years, he never care to invest.
I have also written on the need to have alternative plan while working in my blog. So, it’s important we have back-up plan in CASE.
Thank you.
Welcome to my blog Alphonsus. The key seems to be careful and well rounded planning. We cannot focus on one important area while overlooking the other.