Pity_City
00:00:00.000 | Hello everybody, it's Sam from Financial Samurai and in this episode I want to talk about pity city
00:00:06.400 | why people don't stand up more for themselves and maybe how the fire movement isn't dead yet.
00:00:14.960 | I don't know if you've heard but the CEO of Herman Miller, those Herman Miller chairs for $750 and up
00:00:21.440 | ripped her employees for asking about a raise. How dare they ask about a raise, get stuff done,
00:00:29.840 | have a listen and then once we listen we'll discuss more about the fire movement and why
00:00:35.280 | it's important to stand up for yourself with some other examples as well. Great question Chris, you
00:00:41.200 | know a lot of questions came through about how can we stay motivated if we're not going to get a bonus
00:00:45.680 | what can we do what can we do some of them were nice and some of them were not so nice so I'm
00:00:50.560 | going to address this head on. The most important thing we can do right now is focus on the things
00:00:55.680 | that we can control. None of us could have predicted COVID, none of us could have predicted supply
00:01:00.080 | chain, none of us could have predicted bank failures but what we can do is stay in front of
00:01:04.640 | our customers, provide the best customer service we can, get our orders out our door, treat each
00:01:09.600 | other well, be kind, be respectful, focus on the future because it will be bright. It's not good
00:01:16.400 | to be in a situation we're in today but we're not going to be here forever. It is going to get
00:01:20.560 | better so lead. Lead by example, treat people well, talk to them, be kind and get after it.
00:01:28.640 | Don't ask about what are we going to do if we don't get a bonus. Get the damn 26 million dollars,
00:01:33.760 | spend your time and your effort thinking about the 26 million dollars we need and not thinking about
00:01:39.440 | what are you going to do if we don't get a bonus. All right can I get some commitment for that? I
00:01:45.280 | would appreciate that. I had an old boss who said to me one time, you can visit pity city but you
00:01:50.960 | can't live there so people leave pity city, let's get it done. Thank you, have a great day. Damn,
00:02:00.640 | well what do you think folks? Are you inspired by the talk or are you a little miffed, a little
00:02:07.600 | irate? Well if I heard that I'd be like wow you know what I'm gonna leave pity city and this job
00:02:13.280 | behind and I'm gonna check out what else is there to do because when you're feeling down the last
00:02:19.600 | thing you want to do is get pissed on by your boss who it turns out had a 1.29 million dollar bonus
00:02:27.600 | in 2022 and a 1.129 million bonus in 2021 and their total compensation in 2022 was over five
00:02:35.680 | million dollars. So come on now if you're making mega million dollars I don't think it's wise to
00:02:42.800 | piss on your employees. 26 million dollar order? Man if I got a 26 million dollar order for my
00:02:49.280 | products I would demand at least what a 500,000 maybe a million dollar bonus. I don't know is
00:02:54.960 | that too much nowadays two and a half to five percent of the order amount as a salesperson?
00:03:00.720 | It sounds to me like these type of orders are more appropriate for a c-level executive earning
00:03:06.400 | one and a half to five million dollars. If Andy Owen the CEO received a zero bonus and cut her
00:03:12.480 | salary her rally cry for employees to work harder and not care as much about their compensation
00:03:18.160 | would have been taken way better. But she's a top 0.1 percent earner who makes millions a year
00:03:26.720 | and unfortunately I just found out she is also a fellow William and Mary alumni. Sorry folks
00:03:33.440 | most graduates I've met from this fine public institution are quite humble they're pretty low
00:03:38.720 | key so she doesn't speak for all of us. I think it's very important for all employees to know
00:03:44.960 | that public company CEOs care most about profitability second about their people and
00:03:53.760 | they only care about their people to the extent that their people their employees are being as
00:03:59.120 | productive as possible to generate as much money as possible. You don't see the executives from
00:04:04.880 | Silicon Valley Bank, Signature Bank, Credit Suisse saying look I'm going to give you guys back my
00:04:10.960 | millions and millions of dollars in compensation from 2021 and 2022 because hey those investment
00:04:18.480 | decisions caused our banks our companies to get torpedoed into the ground and resulting in
00:04:25.520 | billions of dollars of shareholder value loss and thousands and thousands of jobs lost. No you don't
00:04:33.200 | hear that the reason why is because everybody is out there for themselves. The executives number
00:04:41.120 | one goal is to make shareholders money and to make themselves money. Please if you are an employee
00:04:48.480 | even a middle manager your job is to not make your job your life instead you should increasingly view
00:04:56.160 | your day job as a place for transaction not for spiritual growth. Your day job is there to mainly
00:05:02.720 | make you money so you can have more options to do what you want and that's mostly it. Potentially
00:05:07.760 | making friends out of colleagues and feeling like you have a purpose at your day job are side
00:05:13.920 | benefits. It's kind of sad but it's true these are side benefits. If you receive them great but don't
00:05:19.520 | expect them. Conversely your boss is there to extract as much productivity out of you as possible
00:05:25.920 | to make as much money as possible from you and the firm. Think like management not like an employee.
00:05:33.280 | We talked in the past about how meritocracy is declining. People aren't rewarded as much for
00:05:39.840 | their hard work and accomplishments as they were in the past and the reason why is because of society
00:05:47.120 | and office politics. Office politics is growing folks. The higher you climb on the corporate
00:05:53.360 | ladder the more office politicking you need to do. You need to continuously sell yourself
00:05:59.200 | internally as much as you sell yourself externally to get paid and promoted. After every review you
00:06:05.680 | must highlight your accomplishments and the value you have provided to your company. Then you've got
00:06:10.400 | to come up with an agreed upon bonus amount, salary amount, title by a certain date. Keep
00:06:18.160 | their feet to the fire. You need this all in writing because if you can perform you need to
00:06:24.160 | get paid. None of this hey in the future you know you're sacrificing for the team you'll get paid
00:06:30.800 | and rewarded and promoted two years from now if you're a loyal soldier. That two years might never
00:06:36.480 | come. Look out for yourself first. A written plan is a must to hold your managers accountable. I was
00:06:43.280 | a manager once and I was managing my managers in my career to get to VP level by 27 and executive
00:06:50.640 | director level by 31. But I hit that ceiling that glass ceiling where I couldn't get to managing
00:06:56.960 | director. I tried for one year. I held them accountable. I said this is my performance
00:07:00.960 | and then they said sorry you're not going to get promoted and we're not going to pay you as much.
00:07:06.000 | You know you got to subsidize the fixed income department. Sorry it's just one team one dream.
00:07:10.240 | I get it. So instead of complaining I figured a way out and that way out was to negotiate a
00:07:16.960 | severance so I can get all my deferred compensation of three years of cash in stock plus my seven year
00:07:23.840 | bullet of this investment in mortgage backed securities out of Japan and other countries that
00:07:29.920 | management forced us to make as part of our bonus back in 2010. And it wasn't going to get paid out
00:07:35.360 | until 2017 and there was no way I was going to leave that money behind. So I decided to take
00:07:41.840 | action for a suboptimal situation and I'm better for it and that is what I want all listeners to
00:07:48.400 | do. It's fine to visit pity city you know the place where you feel sorry for yourself and all
00:07:53.840 | your problems. I think we've all been there before but complaining why life isn't fair is not the
00:08:00.560 | financial samurai way. We're all given different strengths and weaknesses. Some of us have serious
00:08:06.320 | disabilities to overcome. 15% of the world's population has some disability. How we make the
00:08:12.720 | most of our differences is what matters and we're always going to fight on. Negotiating a severance
00:08:19.440 | sounds probably foreign probably weird to most folks. The constant feedback I get from some
00:08:26.160 | people is this. Sam I could never do that to my employer and negotiate a severance. I am valued
00:08:33.920 | so much. The reality is these are the same people who are too weak to fight for their pay and
00:08:39.440 | promotion. As a result they get passed over for the people who do. I wanted my wife on this podcast
00:08:45.840 | to share her side of the story about you know why she didn't want to negotiate her severance for a
00:08:51.440 | whole year even though I had negotiated mine in 2012. But she's dealing with a passport fire drill
00:08:58.480 | because she lost it and she now needs to find another one before she goes on a trip to Japan.
00:09:04.080 | But what my wife has done is help me update my classic book How to Engineer Your Layoff,
00:09:10.160 | Make a Small Fortune by Saying Goodbye that I first wrote in 2012. It's now on its sixth edition.
00:09:17.040 | It has 50 more pages of strategy. It talks about life and work post-pandemic and it is the number
00:09:24.880 | one source for helping you negotiate a severance for yourself so you can be free. Just know that
00:09:30.960 | soon after you leave your job you will be replaced. Your old bosses and colleagues will forget all
00:09:38.480 | about you. Well maybe not instantly but within about a month or two months you're going to be
00:09:44.320 | old news folks and another one is just going to next person up going to take your place and do
00:09:49.520 | your job. So please don't get married to your job. Think about it more as a transaction as a way
00:09:58.080 | to get money, to save money, to invest more money so you can one day be free. Now if you love your
00:10:04.640 | job, awesome. However the reality is only about 30% of folks are engaged at work. A full 70%
00:10:12.400 | not engaged or dislike their jobs. And the longer you do your job, well the less interested you will
00:10:20.000 | be in your job. Come on now, think about it. 20 years doing the same thing. I don't care who you
00:10:26.160 | are, you're going to get bored kind of going to that amazing conference in Hong Kong or Switzerland
00:10:32.080 | after the 20th consecutive time. This is why unless you work in an organization that provides
00:10:39.840 | a golden parachute, a pension package, you need to figure out a way to negotiate a severance.
00:10:45.440 | Unlock those golden handcuffs. Today it is exceedingly rare for an employee to remain
00:10:52.560 | with one firm for their entire career and receive a pension upon retirement. The average person
00:10:58.000 | changes jobs every three to five years. The average person has three careers in their lifetime. And
00:11:04.400 | each time they change jobs presents an opportunity to negotiate a severance package. Given the
00:11:11.360 | transactional nature of work, the nature of a severance negotiation implies that an exiting
00:11:17.680 | employee provides value in lieu of receiving a severance. This value can be in the form of
00:11:24.160 | cost savings, right? No longer do they have to pay you 500,000 or 200,000, they can hire a cheap
00:11:29.840 | replacement. Or you can train your replacement for as long as possible to provide a smooth
00:11:37.040 | transition. You can tell your employer, look, I'm getting out of the industry and I don't want to go
00:11:42.480 | to a competitor, so don't worry. And you can say, I also agree not to air any dirty company secrets
00:11:50.080 | or say anything bad about you, my manager. The last thing a company wants is a disgruntled
00:11:56.560 | employee writing a tell-all article in a major publication about shady things that were going
00:12:03.360 | on inside the firm. Reputation matters most. It can take a hundred years to build and a minute
00:12:10.720 | to destroy, especially now, thanks to social media and the internet. Recently, we've seen tons of
00:12:16.800 | mass layoffs from large tech organizations. How do they lay them off? They lock their employees out
00:12:22.720 | one day at 3am and they send a mass email. There's not a lot of empathy that goes into laying
00:12:28.880 | employees off nowadays, folks. Laying people off is difficult. It's emotionally taxing. So if you
00:12:36.720 | can think more like a manager, if you can think about your manager, ironically, and help with the
00:12:42.640 | layoff process, it's likely easier to get a better severance package. And I talk about this in my
00:12:48.720 | book, How to Engineer Your Layoff. Please don't get too emotionally attached to your job. I've
00:12:55.520 | been out of the workforce since 2012, right? So that's like 11 years. And the people who are most
00:13:02.080 | depressed after work, after early retirement, fake retirement, sabbatical, are the people who got way
00:13:08.320 | wrapped up in their jobs. Their identity was their job. They love to tell everybody, "I am the vice
00:13:13.520 | president of procurement, of marketing, of business development. I just got a raise and a promotion.
00:13:20.240 | I am the big kahuna, LinkedIn profile, update, update, update." You know, these people, man,
00:13:26.880 | they suffered the most once they no longer had their jobs, their title, their positions,
00:13:32.560 | that steady cash flow. Be careful. Be careful. Find other outlets, whether it's through friends,
00:13:39.280 | families, hobbies, side hustles. And for me, I found an outlet through writing, and now I like
00:13:44.720 | to podcast. And now there's tennis and pickleball, right? Fine. Diversify your interest, folks.
00:13:51.120 | Don't go all in on your employer. Because in this hyper competitive world, you could find yourself
00:13:56.160 | jobless the very next month. I hope you don't. If you need that job, just know, things are as
00:14:03.040 | precarious as ever. So maybe the FIRE movement is going to stay long term. Because FIRE,
00:14:09.920 | Financial Independence Retire Early, really is about saving and investing as much money as
00:14:14.080 | possible. So you could have as much passive income as possible to cover your basic living expenses.
00:14:20.000 | So you can do more of what you want to have options to live the life that you want. So maybe
00:14:25.920 | I was premature about saying FIRE is becoming obsolete, because work is becoming more flexible.
00:14:31.120 | I myself am considering going back to work. I think being a teacher, I think in Hawaii,
00:14:38.080 | at a couple schools that I'd like my kids to go to, sounds like a good idea. I could be a teacher
00:14:43.120 | in writing, in media, business, finance, or tennis again. I did teach high school tennis. I was a
00:14:50.400 | high school tennis coach for three years. And that was pretty rewarding and pretty fun. But that is
00:14:54.560 | the power of FIRE, because these jobs aren't going to pay me a lot. But at least I have the investments
00:15:00.400 | to help provide for my family. One final point, and it's on cognitive dissonance. And I think it's
00:15:07.440 | real among the rich and the powerful. As I've written in the past, no matter how rich you get,
00:15:13.040 | you often never feel rich or rich enough, because so many people have so much more. It's this
00:15:20.160 | constant comparison that creates constant anxiety that's really hard to quell. And so I stumbled
00:15:26.960 | across this really fascinating survey. And there's been a number of these surveys in the United
00:15:30.720 | States about United States real and perceived income gap. Now, less than 0.5% of American
00:15:40.240 | households earn more than a million dollars. But the survey participants said they believed
00:15:46.000 | about 10% of the US population makes a million dollars. Now a $500,000 income is the threshold,
00:15:53.120 | the cutoff point for a top 1% income. Survey participants believed that roughly 19% of US
00:16:00.560 | households earn more than $500,000. So based on this survey, I think our perceptions about
00:16:07.200 | how much money we have, if we have money is kind of warped, and how much money other people have,
00:16:13.040 | if we don't have money is kind of warped as well. So the more you know the facts,
00:16:17.760 | hopefully by listening to this podcast, reading Financial Samurai, reading books, the better you
00:16:23.920 | will be. More education, the better. So in conclusion, I hope all employees fight to get
00:16:29.920 | the best pay possible. If you do, you'll boost your chances of reaching financial freedom sooner.
00:16:35.840 | And if you don't, you may end up bitter as you work way longer than you should. The reality is
00:16:42.800 | nobody will care more about your finances than you. Loyalty is an excellent trait. It is a
00:16:48.240 | Financial Samurai trait. But loyalty also goes both ways. If your CEO is making mega millions
00:16:54.320 | while paying you peanuts and talking to you in a condescending manner, you've got to leave.
00:16:58.800 | Don't spend the best years of your life working for an organization that takes you for granted.
00:17:05.840 | Because if you do, you will look back with regret. And regret is the killer feeling that just grows
00:17:14.240 | over time. Thanks so much everyone for listening. If you want to pick up the latest copy of How to
00:17:20.080 | Engineer Layoff, Make a Small Fortune by Saying Goodbye, check out financialsamurai.com/h-t-e-y-l
00:17:30.160 | and use the code SAVETEN to save $10. I think it'll be the best severance negotiation book,
00:17:38.880 | and I think the only severance negotiation book out there on the market that'll help you break
00:17:43.760 | free from a suboptimal job situation. Take care everyone and don't forget to sign up
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00:17:51.760 | com forward slash news.