A few weeks ago I read the following post on Reddit:
HENRY -> NENRY: A cautionary tale from FAANG-land
Imagine this scenario:
You’ve been HENRY (High Earning Not Rich Yet) for say two years and life is good. You feel successful and respected and have a fat stack of unvested RSUs. A few more years at this rate and you might be set for life!
Then you get laid off.
You are now Not Earning and Not Rich Yet (NENRY).
Your lifestyle crept up (and/or your partner isn’t working and/or you have kids). You have savings, but your burn rate suddenly feels quite high. That 6.5% mortgage felt manageable at the time, but now… woof.
You’ve been tracking your Net Worth the last few years (maybe too closely) and have been proud to see it grow.
Now it starts going down. Every week, every month, your FIRE number gets further and further away.
All those unvested RSUs you were granted before the stock price went up? Poof! Gone. You can delete the widget you added to your home screen then counts down the days until your next vest.
Even if you can find another job at the same level, which might take 6-12 months, your total comp might be half what you were making prior (given the difference in RSU value).
Moral of the story: Be grateful, keep your burn in check, and don’t count your chickens before they hatch.
Life comes at you fast. While such stories are rare, they illustrate the fickleness of some high income occupations especially in the tech industry. One day you are flying high and the next day you are trying to pick up the pieces.
The research supports this as well. A working paper released by the National Bureau of Economic Research (NBER)