Wednesday, June 11, 2008

Jobless Millionaires: The Consequences of Wall Street Layoffs

This is the first time in over 25 years of coaching executives that I’ve seen so many millionaires in the job market.

New York City and its upscale suburban surrounds are feeling the sting of the Wall Street layoffs. Families, communities and businesses are processing a new and painful reality.

As their net worth declines and short-term prospects shrink, executive lifestyles and spending habits are being subtly altered. The consideration of a golf course membership may be weighed against the payment of a child’s private school tuition. A vacation abroad may be re-evaluated against the possibility of zero earnings for an undetermined time.

Prudent financial planning will most likely ensure that many Wall Street millionaires ride out the rough patch for the time being. But the local organizations and businesses that depend on them, e.g. golf clubs, restaurants, spas, limo services, etc. may not be able to hold on if discretionary spending is significantly reined in … there is a possibility of “no fault” casualties.

Sustaining the seven-figure lifestyle …

Wall Streeters are being forced to reassess their careers. For the fourth time in just under 30 years, the industry is going through a contraction and, once again, there are more job seekers than jobs. The competition for coveted positions is intense. The previously unthinkable is being whispered, “What if I can’t get another job on Wall Street … how can I afford to keep all this up?”

The bottom line is that Main Street doesn’t pay like Wall Street. But life as we know it doesn’t begin and end on Wall Street either, regardless of the infamous words of Gordon Gecko. It’s been my experience that many of these executives go on to lucrative positions in other industries or start successful businesses of their own. Almost 80% of the executives I coached during the Lehman layoffs in 1992 ended up working outside Wall Street.

Succeeding on Wall Street is tough, but like the song says, "If you can make it there, you can make it anywhere." If you've got Lehman, Citi, Bear or any of the other firms on the street on your resume, the odds are you're highly marketable.

The take away: Career options … like stock options … are more plentiful and varied than most people know. And if the right one is chosen, it can reap millions.

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