Wednesday, December 30, 2009
Get a load of some of these tales of woe from the well-heeled in American society. It seems that the (formerly) highly paid are taking a hit along with the little guy during this downturn and there may be fewer $100,000+ incomes in our country's future.
As chief financial officer of a top New York advertising agency, Jeff Boose boasted annual pay exceeding $400,000, a spacious office and a lifestyle to match.Maybe a little less spending in the past might have made today's situation a bit less of a shock for the Boose family and, it could just be me, but why didn't the Boose's take some portion of that huge income to pay cash for the car instead of ratcheting up the family's monthly debt service total to match his income.
Boose and his family live in a sprawling house in this affluent suburb, belonged to a country club and took numerous lavish vacations each year.
But since he was laid off in late summer 2008, they've made a head-spinning pivot. It's no surprise the country club membership, the vacations and a Volvo sport-utility are history. More tellingly, the Booses question every dollar they spend, sometimes eating pancakes for dinner and borrowing from their parents to pay the bills.
Boose, 43, is equally dumbfounded by his inability to land a position despite a résumé brimming with accomplishment and a steady, 20-year rise to the upper echelons of Corporate America.
"I never thought this would happen to me," says the burly, easygoing Boose. "It's a punch in the face."
How can anyone possibly have any sympathy for someone who has worked twenty years, then gets laid off from a job that paid him $400,000 a year and has to borrow from his parents?
Some more details about the Boose's spending...
The Booses' lifestyle grew proportionately. They moved from a tiny apartment to a townhouse, then to their current 4,000-square-foot brick house here on a quiet, winding street lined with expensive homes, having four kids, now ages 7 to 14. Several years ago, they began splurging on vacations, taking seven a year to places such as Hawaii and Costa Rica, and spending $500 a night at the Four Seasons. They joined the country club in 2007.Well, laying your own mulch is a start...
"Every year, the bonus got better, the salary increased steadily," Boose says as he and his wife, Karen, sit in a family room dominated by a large Christmas tree and a 52-inch flat-screen TV, the thermostat set at 66 degrees, on a recent weekday. "I just never thought it would end."
But as companies chopped advertising as the financial crisis deepened last year, Boose, a relative newcomer to the firm, was laid off. He wasn't worried.
"I thought I would be easily employable," he says, noting that a day later, the family took its annual trip to Hilton Head. By January, he realized, "This isn't going to be as easy as I thought."
The Booses, meantime, have gradually, sometimes painfully, downsized their way of life. In late 2008, they suspended the country club membership, stopped maid service and didn't schedule anymore vacations. In the spring, Boose laid his own mulch in the yard instead of hiring a landscaper, saving $500. Last summer, they turned off the air conditioner and axed their DirecTV NFL package.
I'll never forget what LA Lakers Jerry Buss said about twenty years or so ago - the secret to becoming wealthy is to spend less than you make. A pretty simple concept, but one that the Boose's haven't thought much of, apparently.
There are a few more human interest stories in this report that really make you wonder what some of these people were thinking over the last ten years. But, what's most amazing to me in reading these accounts is that so many highly compensated laid-off workers just blow through their entire savings - however, big or small - maintaining their current lifestyle before they realize that they may never again make $150,000 or $400,000 a year.