By Jim Toes, STA
Bonuses and pay raises have been reported with great enthusiasm in the daily journals recently. Speculation forecasts increases of 25%, 50% and higher, and comparisons to the past high-water mark set a decade ago are being made. For those individuals who have lived through the cyclical nature of our business and the inconsistency of pay and job insecurity it brings, there exists a unique perspective and deep appreciation for this benevolent event. However, for the younger generation, those just starting out in their careers, there may exist an expectation that every year going forward will be this rewarding, and that can lead to financial trouble down the road.
No matter what industry you work in, the need to save a portion of your income is very important. And if you find yourself in the financial services sector, where job security is not guaranteed, it becomes even more important. For many, finding the discipline to save is challenging. As a young trader, I remember the words of my father, an NYPD Captain, echoing in my ear: “I don’t care about how much you make, I only care about how much you save.” Yes, my father grew up during the later years of the Depression and while I never followed his message completely, what I did absorb has kept me in a safer place financially.
I remember the words of my father, an NYPD Captain, echoing in my ear: “I don’t care about how much you make, I only care about how much you save.”
There is wisdom in previous generations that should be shared with the younger generation on this topic. By previous generations, I am not necessarily referring to the Depression, the Vietnam era or the even the Dot.com bubble of the late 1990’s. If you are a manager with 15+ years of experience, you possess more Wall Street wisdom than you might realize. Recognize it, own it and share that wisdom with direct reports who have only been in the business less than five years.
Explain the importance of saving, and saving early in their career and consistently, through employer retirement savings and investing plans, as one example. Encourage saving over spending, and recommend having a plan to pay back debt. And yes, explain the harsh reality that a day may come when they find themselves in-between jobs through no fault of their own. It’s likely someone you trusted imparted this wisdom to you during the early stages of your career; now, it’s your turn.
This is the perfect time to explain to younger colleagues the two headed nature of the metaphorical Wall Street coin. One side has the potential to provide incredible rewards, while the other can be extremely harsh. Make sure they are well prepared, regardless of how the coin lands. Congratulations on a successful 2021. Here’s to doing it again in 2022.