Saving: It Works

My pile of savings has been steadily increasing over the last two and a half years, since deciding that a life in the office was an increasingly bleak prospect I began to financially engineer an escape.

The omnipresent oppression of the corporate life hasn’t quite got me down yet, but when my knees finally buckle under its pressure I want the supple and supportive cushion of some investments to fall back on.  The alternative of dragging my metaphorically shattered body to MegaCorp and back again, day after day, just isn’t that appealing.

And so it goes, I work, I save and I repeat.  Habit at it’s time-sucking best.

For the most part, life is the same in it’s post-saving set up as it was before.  I still go out and hang out with friends.  I still go on surfing and snowboarding trips.  Fuck, I even buy a coffee every now and then.

Cracks begin to form

But everynow and then things are noticeably different as a result of my secret wealth.

No one knows of my secret savings

No one knows of my secret savings

A few weeks back a suspicious looking invite made it’s suspicious way into everyone’s calendar, highly suspiciously sent out the evening before for a 10am meeting the following day.  A teleconference invite, the worst kind of invite.  Entitled something along the lines of;

Dear Stupid Members of the Horde who will do anything to keep their monthly salary.  Important business update! Make every effort to attend!!

Yours,

The Hive Mind

My highly developed senses prickled at this, something dangerous was afoot.

Suspicious

The Update

If you work for one of the many MegaCorps you get used to someone moving into a position of power and feeling like they have to swing their junk about, just to let everyone know how terribly important and powerful they are.  It’s all part of it.

This tends to result in endless “restructuring” and “efficiency realising” exercises as time marches on.  Seemed another one was on its way, I could smell the stench of the Redundancy Monster through the passage of time.

The announcement was protracted out over a couple of days, I suppose to keep someone in power feeling powerful.  End result for Mr Zombie wasn’t much, he’s still got his job at MegaCorp.  A few others weren’t so lucky.

I did find myself in a state of calm during the announcement, mulling over the pros and cons of staying in my job or being asked to leave with a nice redundancy payment.

Peeking out from my Zen Bubble, the majority of the Horde didn’t seem to share my thoughts.

There was a world of commotion out there, the ying to my savings induced yang.  Plenty of worried emails were sent, red faces worn by worried workers and the stench of panic hung in the air.  For many, that unwavering stream of future income in the form of salary was starting to shimmer and waver, it wasn’t looking all that certain.

It would have been a pain if I got hacked with the Redundancy Axe.  Looking for a new place to work would have been  an upheaval.  Especially in the specialised role that I find myself in.  But it wouldn’t have been a rushed affair that needed to completed with any immediate urgency, I could have used some of my savings and taken the time to find the right role for me.

It seems that having savings, rather than a larger house or a nicer car, is a rather awesome in these situations.

I’m certain the people impacted will be just fine in the long run, but I suspect they have set themselves up for a stressful time of it.

Before the announcement was completed I sent an email to a group saying that perhaps we should cancel our cinema trip in case some of us couldn’t afford it come 5pm.  It elicited not a single response.  I stick by it, it was a funny email.

A wandering mind

Did make me wonder, if I had got the “It’s us, not you” talk, my P45 and a redundancy payment, what would I do?  One of four things;

  • Jump straight into a job search and be back at work for another MegaCorp without missing a beat and bank the whole redundancy payment.
  • Travel for a few months on the redundancy payment and start looking for a job on my return.
  • Use the redundancy payment and savings to embark on a new venture.
  • Sit about in my underpants until the redundancy payment was exhausted, panic and then re-start work.

Let’s all agree on something, they all have their positives.

The first would allow me to keep up the momentum I’ve built over the few years.  The middle two would be much more of an adventure, but would likely take a huge chunk of my savings away in the process.  There’s a lot more risk wrapped up in them.  The last would leave me feeling a guilty and ashamed mess.

It’d probably be the first at the moment, but give it a couple of years and the second two options start to look more and more appealing.

Thing is, without the savings your options are reduced to frantically looking for a job before you burn through your redundancy money.

Real Life Ain’t No Fairy Tale

The point of this rambling is that this is the first time I’ve really felt different to other people as a result of ignoring the norms and saving over 50% of my net salary.

As the months roll by and you continue to save, that becomes your norm.  And it’s all to easy to forget that the vast majority of people aren’t living like you.  Although I walk around shaking my head at fancy houses and needless commutes, endlessly complaining to Mrs Z about cars on finance, I still think at some level people can’t be that bad with money.  Surely they must have some savings.

From where I’m sat, on my couch, fingers dancing across the laptop keyboard, some old school In Flames blaring away, it seems so fucking obvious.  It’s crystal clear to me that borrowing money is, for the most part, a shitty decision.  That buying the biggest house and the flashiest car you can just afford the monthly payments on is approaching personal finance like a labrador might.  And labradors are known more for their love of rolling in fox shit, not their personal finance abilities.

And yet this is how 95%* of the population approach it.  *figure plucked straight out of thin air

It’s very easy, once on the path of saving to Financial Independence to forget that having savings provides other benefits too.  It’s not only Early Retirement or Financial Independence that make saving 50% of your income a good idea.  Hopefully the shock that the Hive Mind provided serves as a reminder to the employees of MegaCorp to sort out their finances.

For me, it’s been a reminder that I’m on the right track.

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Mr Z

(I am aware that being made redundant can be a right pain in the ass.  Weenie over at quietly Saving is going through it right now.  Head over to voice your support  🙂 )

11 thoughts on “Saving: It Works

  1. reckless saving

    I’m one of the average joes in bigcorp, on the roller coaster, the yearly restructure merry go round. Blase to it all and my FIRE journey has helped me not worry about it despite when family and friends ask what would you do if you lost your job, usual reply “I’d get a job down Tesco”, not a flippant reply, it’s the type of customer facing aspect of a job I miss from my youth from now doing a desk office job.

    I’m less than 10 years away from when I feel I’ll be FIRE ready, nearer the time I’ll be itching to see what I can do to secure a redundancy payment to hasten my path to leaving, I think that’s going to be difficult as in all reviews I’ve never had to apply for a job I’ve always been pigeon holed to a role. Only problem I’ve got at the moment is being at a secure stage financially I do feel freer in the working environment, happier to raise point, say no to something I don’t want to do or agree with. I do have I pitch myself whether I pushing too many buttons thinking I already in FIRE’d mode. My current security doesn’t replace my current income, that is my goal for the next 10 years, like with you my saving rate is the main contributor helping speed up the investment income to replace my wage.

    Reply
  2. The Rhino

    Its difficult to quantify the psychological benefit of being FI, but I think it is a significant stress reducer.

    Its a bit like painting a room, you know it looks good now, but its hard to remember how bad it looked before you started.

    Its always nice to feel that you have something tucked up your sleeve that singles you out as being a bit different from the rest, but you can never talk about it, at least not in real life, only to a bunch of people you don’t know on the interwebs..

    I would recommend a gradual extraction from megacorp as your stash grows via ever smaller and therefore more personal business ventures, ideally with ever fewer hours maybe ultimately culminating in something of your very own creation?

    Thats been my glide path, and its not given me too many problems.. I certainly think it has a higher chance of success than an SHMD or RIT jumping off a cliff approach

    Reply
  3. Living Cheap In London

    HELLO! Sorry haven’t commented in an age but i been reading your posts!

    Your post certainly has echoes of what’s been going on at my work over the last couple of years. We’ve had a 30% reduction in head office staff, couple with some “restructuring” in the business units that the HO supports. Some long standing people who i thought were in the kinds of positions our business considered pretty much vital were made redundant.

    I am a sort of outlier in my role, & look after a few things that are legislative so I wasn’t really worried that the axe was going to swing my way, but for some time the changes have still has really changed the atmosphere in the business, & i sense the “restructurings” are still not complete.

    Luckily Mrs LCILs work is not going to be affected by these sorts of things as she works in a sector of huge skills shortage, so either way it’s the same each month… just like you… earn, spend a lot then we earn, & save the rest. The “FU fund” continues to build up nicely!

    Reply
  4. FIREin' London

    Hi Mr. Z,

    Congratulations on keeping the savings habit ticking along, it puts you in such a strong position to be able to not worry as much as others. If it were me I would go option 1 – bank as much of the payout as possible and speed up the journey!

    Reply
  5. Norm

    I’ve had that same thought, too. Not that we’ve had any layoffs here. Although if it did happen, we’ve saved enough money by now that I’ve imagined my big panic would be, “Oh no! I have to delay retiring at age 40 to age 41!” That’s some strange worry to have.

    Reply
  6. weenie

    Cheers for the shout out, Mr Z and good to hear that you dodged the axe. I’m still pretty calm about my situation and yes, it does help that I had a half-decent severance package AND savings available should I need to tap into them. When the axe first swung at me in 2009 following the financial crash, although I dodged it at the time, I recall feeling extremely stressed, worried and anguished as I was still carrying a load of credit card debt at the time. Even if not saving for FI, people should be sorting their finances out.

    Reply
  7. theFIREstarter

    Yep, very similar thoughts as when I thought I was being made redundant. I was pretty ecstatic about the whole thing and actually a little disappointed when they did a U turn on it.

    It gives you peace of mind and extra bargaining power at work if people are trying to boss you about. You don’t have to fully FI to have the cojones to walk imo, just some modest savings and you get that benefit after just 2 or 3 years of saving 50% of your income.

    It totally works!

    Reply
  8. Mrs Chai

    I got axed at end of 2015, but luckily my hubby has a secure and much loved job so financially I was not too worried. I still haven’t found myself a new job but make a bit of money from side hustles and selling stuff on ebay. I only recently discovered the concept of FI and could kick myself for not discovering it earlier, but am totally inspired to get more frugal and save more. I have started budgeting and am pretty surprised how we have allowed money to flow through our fingers over the last 5 years. This is especially shocking as we paid off our mortgage very early by throwing everything at it but once we achieved this, we seemed to have changed direction, forgotten how to save bar the normal contributions to pensions and spent the surplus on crap pointless purchases, none of which I remember! This needs to change.

    Reply
  9. debster

    Now that I am getting close to FI I find myself being very careful not to act too cocky and independent at the office. There has been attrition here, so fewer people doing more work, but that’s okay! My days here are numbered. Ha!

    Reply
  10. Jacq

    My company had a layoff in Q4.
    The rumors of layoffs started a few weeks before. 2 people who had been hired after me complained frequently, took long coffee breaks and lunches. I doubted I’d be the first to go.
    I’ve been through layoffs before, and nothing you do immediately has an effect. It is the work you’ve done until now, and sometimes it’s the whole place. I know being on the FI path means I have my emergency fund, and I am determined so I would have gotten a new job. I only have myself to support so no panic on that aspect.
    I feel like the future of the company is still not set in stone, so I save as much as I can, appreciate the 401k match, etc and have my back up plans just in case. 🙂

    Reply
  11. Grace

    First time reader here. I started saving earnestly 2.5 years ago when I suddenly found myself in a job that paid six figures. Due to both savings and some sweet company perks, by the end of this year I’ll have $100,000 in savings, excluding my Roth 401K. I live in the US on a work visa, as do the majority of my co-workers and we end up being stuck in stressful jobs due to restrictions around who you can work for. About a year ago I suddenly realized I didn’t have to.stick around for this. I could go to my home country and start a business OR relocate to a more open country like Canada.

    Today, I’m preparing to apply to graduate programs in Canada. With the money I saved from my job, I can easily pay for an MBA (but really prefer to get a scholarship, so I’m putting together a strong application). The key lesson is because of an FI mindset, I can make a monumental change to my life that will likely lead to me getting permanent residency in Canada. I wish more of my immigrant coworkers had my approach.

    Reply

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