In a recent Yahoo Finance article, they spotlight a 37 year old man who was making roughly $100,000 base who now works at Starbucks. His primary reason for taking his barista job is for medical benefits. The whopper of the story, which very few commenters pointed out was this line,
“But with a college diploma, 22 months of severance to rely on and 15 years worth of experience under his belt, he figured he had nothing to worry about. Right? Wrong.“
First of all, the readers are not thinking when they don’t comment that 22 months of severance equals $180,000! Or put it another way, this fella can live the SAME standard of living for the next 22 months if he doesn’t lower expenses one bit. I don’t know about you, but 22 months of severance is better than a hot fudge sundae on a blistering day!
Second of all, Yahoo Finance tries to paint this 37 year old guy as a person in dire straights because he now works at Starbucks. This is one of the main reasons why I dislike mass media. Schadenfreude, schadenfreude, schadenfreude! If you give me $180,000 in severance, I’ll be happy to kick it at Starbucks! Wouldn’t you?
Sensationalism makes a story out of nothing, never talking about the positives, and tries to focus on juxapositions that aren’t the crucial focal point. The focal point of the story is the $180,000 severance he got and his reason for working at Starbucks for healthcare benefits, and not because he needs the $10 dollars an hour.
Finally, you know there is way more to the story than a 37 year old guy needing to work at Starbucks for money. The article says he’s blown through his $180,000 already and implies he’s so desperate for cash he needs to work as a barista. You and I know there is nobody on earth who works for 15 consecutive years, makes six figures, and doesn’t save anything!
DON’T QUIT YOUR JOB WITHOUT A PLAN
Maybe people are stubborn. Maybe people have too much pride. Or most likely, people do not understand that negotiating a separation package is a skill that can be learned. I negotiated several separation packages for friends, one of which was valued in the hundreds of thousands of dollars. If this person quit his job, he would have lost his severance his deferred compensation.
We went through an entire game plan of how to approach his manager. We devised a way to suggest a possible separation without getting fired instead. We finally negotiated the separation agreement package, and created a happy exchange so that he could return someday and fulfill his manager’s need to cut costs.
You may be drawn to the trend of quitting your job early to pursue your passions. That’s fine if you’ve given your job a go, saved some money, and have several well thought out back-up plans. But, if you’ve got minimal experience and just several thousand to your name and decide to quit your job, it’s very likely things will be tough going for a long while. Working for yourself is not a walk in the park, and I’ll discuss more about my own adventures later.
If you quit your job with no safety net and decide after several years you need a job, you’ll have one gaping hole in your resume. Meanwhile, your peers who stuck with their jobs and saved during this time period will be enjoying their lives with way more financial security. Just be very careful about jumping without a parachute. Plan and plan some more!
PLEASE PUT THINGS IN PERSPECTIVE
If you get a $180,000 severance, I don’t care who you are, you starving going to hurt for money. $180,000 is a crap load of coin that can last many people years. 22 months of severance blows the average severance package out of the water!
The other lesson to learn is that getting laid off is big business. You do not want to quit your job and leave big money on the table. Companies everywhere are BEGGING their employees to quit so they don’t have to pay severance. Meanwhile, other companies are almost forced to provide severance to perserve their reputations as is the case in this article. Don’t ever quit, get laid. You deserve way more than nothing!
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I think they focus on Starbucks because more people can relate to that than the huge severance check. Would I leave for 180k in severance? It is tempting but I would really have to think out a very detailed plan first. My job is the best job I have had to date and that would be hard to give up in the area I live in. Ask me again in a couple years when I hope to have my blog much further along.
That’s quite a heft severance. I would be tempted to leave for that amount. However, I’d probably save most of it and go and get another similar job to pay the everyday bills.
180K isn’t a lot. It sounds good. It sounds even great under some light but let’s be real… Where do you live? What are you MANDATORY expenses? Do you have insurance? Car? Debt? Family? What about food, rent, clothes and daily living? Forget social life…
Can one stretch it? Sure. Can one survive on it? Sure.
However most people cannot.
Great viewpoint. You saying 180k is not a lot of money makes me VERY bullish about the economy. It shows me that you and perhaps many other people have and make much more since they need that much to survive.
To me, 180K is plenty a lot.
The average person only makes about $40k a year so most people could survive for years on $180k. I’m guessing this person waited too long to start downgrading his lifestyle.
The comments on Yahoo don’t surprise me. They are negative on almost everything over there.
Well, it’s kinda apples to oranges in this case. It’s the 22 months of severance which is the consistent stat, hence around 75K in severance for the person making 40K a year. not bad stil!
it sounds good, I could probably do it, but i’d have to seriously change my lifestyle. If I felt confident that I could get another job quickly, I may just take the money and start a new position!
This is a massive severance package. Wow that is awesome, invest it all in index and dividend paying stocks and you will be earning some good coin. If he doesn’t invest it, he can pay cash for a good home and be mortgage free forever thus allowing him to work for Starbucks for as long as he pleases.
It truly is massive, and instead of readers and the writer focusing on the 22 months of severance, they focus on him working at Starbucks for the benefits. Itøs amazing how people can miss the point completely.
I’m not sure what you’re steaming over? He was making 150k a year and was laid off. He ran out of money and had to find a job because it was a surprise to him that nothing else was available… By his standard of living 180k is nothing. As for the focus on Starbucks I think that’s just a side detail in the story. They are trying to point to the fact that Starbucks has good benefits etc… The whole point here is that he never saw this coming and when it happened he surely didn’t expect to be out of the job this long that it came down to working for $9.75/hr
The only thing I’d be worried about is re-entering the job force after 2 or 3 years off. There are a lot of things you’ll forget, things you’ll miss out on learning and what will you tell your potential new employer you were doing for the past two years? chillin at starbucks?! haha
“Don’t ever quit, get laid.” Who says you can’t do both? ;)
So…I’m a little confused. I was under the impression you only got paid severance if you were fired or laid off, not if you quit. Help me understand!
It would be great to think he had savings, but you never know. And he might have blown through it pretty quickly. It might be a shock story, but I think the shock they should have highlighted is how irresponsible people can be with their $. Because like you pointed out…he should have been fine.
Heck! Once I “retire”, I will probably find a job like Starbucks because I would be bored!
I’m the same way. My grandfather retired a total of 5 times!
While I disagree that “noone” fails to save money working 15 years and making a 6 figure salary, I certainly agree that $180k should last anyone a while. I did the quick math and it would last us 7.5 years… more if we cut back. And that’s assuming we both left our jobs.
I don’t know of anybody who has worked for 15 years and hasn’t saved, and I know a lot of folks! 180k plust 15 years of savings équals a very nice life doing nothing for a long time!
Granted, they are by no means at the 6 figure level (closer to half of that), but my parents haven’t managed to save a dime in their entire lives.
Why do you think your parents didn’t save a dime?
Despite the hefty amount, there is NO WAY I am going to leave my job. Well, maybe yes, if I have a savings enough for six months worth of my expenses, a new job to go to, or my homebased business is already stable enough that I can concentrate on it full time. This way, the severance will be an addition to my savings and investment.
With his modest earings from Starbucks he can probably use that $180k, plus whatever he has saved, to subsidize a similar lifestyle for may years to come. He is probably far more chilled working there, and so his life is probably a lot better overall.
With that type of severance, my question is this: did the guy sign a non-compete or is the amount at risk if he finds employment? If he gets the full amount without many restrictions, wouldnt most people take such an offer?
That would be a great opportunity to double up if you find another comparable position soon, or a chance to take a sabbatical and then take your time looking for the next job or career change.
Everything depends on the individual! If this guy had a plan to quit to pursue some lifelong passion, he has 22 months to make it. If he quit to find himself, he has 22 months to find his new career. Most people focus on the easy answer in this type of article versus the parts that may be incomplete. My first reaction was why did he quit?
Thanks Sam for pointing out the ridiculousness of popular media. The way they emphasize certain points is ridiculous and often goes unchallenged.
180K goes quite fast. Just look at the dollars and cents, It’s only 4 years of income if you’re making about $45,000 per year. what are you going to do after 4 years?
I agree with Barbara. 180K goes fast unless you have proper planning when you jump ship. When I took sabbatical from the corporate IT consulting work, I already had three income producing hotels. So the severance package went straight into savings. I didn’t work for almost four years. All the while I was paying for private schooling for my daughters and their expensive tennis lessons. :)
I think the key is to have an income source to sustain your lifestyle before taking a plunge into an ocean of retirement. You can drown quickly if you don’t plan and learn how to swim before making the plunge.
I bet that guy is a peach of a barista.
Lol!
The other part of the mass media that I don’t like is that they’re basically cr*pping on someone who works at Starbucks. He’s so desperate he…*gasp!*… took a job at Starbucks??!! Oh nooo!!! Seriously dudes, a job is a job, and whatever people need to do to make their ends meet, giant severance or just someone who couldn’t find anything else, then they should do it, and mass media shoudn’t look down on those jobs. A job is a job!
I agree. I say good for him and stand proud!
TB, when I read your posts or comments, American flag waving behind your silhouette comes to mind.
$180,000 in severance is not enough for me. It may only help me to lead a good life for 5 – 6 years after that I will have to search job or do business for living. How soon “$180,000” will spend it depends on several things including food expenses, fuel expense and some others. If you are leading a luxury life then “$180,000” is just for one year.
SAM, I am agree with you for “DON’T QUIT YOUR JOB WITHOUT A PLAN”. I always follow it.
I think at 180,000 he would be a Crorepati, that is a person with 10 million Indian Rupees of net worth. An Indian millionaire if you will. If he went to India, he could live on the interest.
CROREPATI working at Starbucks. Lol. I would buy a coffee shop and become a store owner with that much capital. Now, he might be networking there, and he could turn around and buy a coffee shop later and hire the efficient starbucks barristas with good work ethic and run his own store. No Crorepati will work as a barrista and work like a donkey just for the benefits. There are lot of more cushier jobs out there and you would have the luxury to cherry pick a better job if he was making what he was making.