Survived this round. There will be more rounds.
Assuming that I have about 7 years of experience, late 30s, mid 200K total comp, wife is not working, have a toddler. No debt/mortgage (renting in So Bay). Working in sales.
Is there a rule of thumb for how much should someone like me have to have saved to hedge layoff risk?
@ae has nailed it
Common lore says 6 months.
In this day and age, it should be 1.5-2 years minimum. If you've been reading the boards, it has taken some people over a year to get their next job. It's an employer's market right now. And the more junior one is, the harder it will be.
For "sweet spot" mid level with good experience, it could take less than a year.
Honestly though, whether companies use AI as an excuse or whatever, it's rough going right now.
But you asking about savings is the RIGHT question to ask....always! Witholding buying a house to build up that Emergency Fund is a good way to go about things!
These days you should try to keep with at least 18+ months of liquidable cash for emergency fund, in tech field it takes longer time to get a suitable high paid job these days in Bay Area
@dx this is $50k in liquid assets not our retirement, dou--e. And we are young, self made, and didn’t make this much until the last 5 years. We had $2k in savings 4 years ago. There are MANY Americans who have nothing saved
I would feel na--d with only $50k in liquid assets.
Be prepared to pay a lot for healthcare if you get laid off. COBRA is not cheap it will be in the range of $1500-3000 a month depending on your coverage. healthcare.gov is no bargain since the subsidies expired.
Having your wife find work might not be a bad idea so you aren't completely left without income if you get laid off. It will take her a long time to find a job right now too.
My husband and I make around $350k total in our house, baby on the way, and have $50k saved for emergencies. Not proud of this and ideally want $200-300k one day so we can also have a reasonable down payment for a house plus emergency funds. They say 6 months of living expenses saved.
If that’s all your earning you won’t be in sales for long … we make double that in my team .. you should try marketing that’s for sales people who can’t sell.
Wife (or husband) at home to take care of a toddler is the best investment in the world. It's literally the reason why the rest of us work.
Or if you only care about the financial side, it comes out pretty even once you pay for all the daycare and rides and stuff, but then you haven't dealt with the emotional side of being distant from your little kid.
Put the wife to work doing something other than being mommy.
Toddlers are a handful, and it's great that she can be with your child instead of putting the kid in daycare, but she can also manage to do some sort of remote work if she's at home, even if it's very part time. Something where she can drop it to attend to the kid's needs, and pick it up on her own time/schedule, but something that consistently brings in some extra money to your household.
Guaranteed there are some hours in her week where she has enough time to "sneak in" some work time. If she has time to shop online, engage in social media, hang out with mommy group activities, etc. then she has time to bring in some money.
Other than that, curb your spending (do not assume your $200K per yr. will always be there) live below your means, and invest in precious metals. Since you're in sales, you know how to hustle, so get other streams of income happening.
Use BrokerageLink Options Trading in the 401k. Max out your Roth IRAs. Day trade.
https://www.fidelity.com/options-trading/faqs
The tough part with options trading is needing to keep 9:30 to 10:30 AM Eastern open, that is prime-time. Plus you have to develop some thick skin.
We day traded in TAC long ago. It helped that our Manager also day traded with us, so he didn't care.
Hired on at Cisco in 2000, and moved my old 401k to all Brokerage-Link and have been advent SPY trader. When I left TAC in 2003, I had $300,000 in SPY at that time, and day traded it heavy until I left in 2017. I turned 55 a few years ago, and converted most of it to index funds. It has been a roller-coaster at times with trading, not recommended if not tolerant to risk.
I am in my 60's and have been through a couple of setbacks over my career.
If you have no other financial safety net (parents, trust fund, etc.), I would want a full year reserves at your current full monthly spend. Cobra payments alone for a family after a layoff could really hit your budget.
The best of luck to you!
Rule of thumb is usually 6 months of salary saved with the expectation of cutting back on non essential spending but being in sales presents a different challenge since you’re selling solutions that do not meet customer expectations and ruin your relationship as a “trusted advisor”
Ask Claude. Not here.