Tuesday, November 20, 2018

Child of the Recession: On Financial Fear

via - I moved away from the Bay Area long before Apple started building their new office complex, but my elementary school was quite near their old headquarters.

For an inordinate amount of time after I start each new job, I'm regularly plunged into a simmering state of abject terror, filled by the mostly irrational fear that I could, at any moment, be summarily fired* without having spent enough time in the job to adequately or reasonably explain, in future job interviews, why it lasted such a short time, leaving room for only one possible inference, that my performance (and thus my suitability to be an attorney) had been horribly defective in some way. I didn't initially feel this way when I started my first ever job, the only time I was actually in biglaw, but well, I learned from that experience, and I learned real fast.** 

By describing it this way, I may be overstating how much time and total headspace this line of thinking actually took up, but this was also the best way I could think of to accurately describe the intensity of the feeling when it did hit, and to indicate that the feeling reared its head often, even if it was only for extremely brief, fleeting moments most of the time.

It wasn't until recently that those feelings dissipated as to my current job, a few weeks after I crossed the one-year mark. Finally, I had some time and mental space to reflect on where the fear comes from. Fittingly, financial fear and anxiety are themes that some of my favorite money bloggers have discussed recently. For some of them, it sounds as if the source of their fear or anxiety, or how it manifests, may be similar to mine.

My own deep-set financial fear or anxiety is, I think, the product of being a true "child of the recession". And it wasn't just the 2008 crash, either. I also grew up the child of a Silicon Valley tech industry employee, surrounded mostly by other children of the tech industry. Throughout our childhoods, through the dot-com bubble and its bursting and other boom times or slow times, what little information trickled down to me, mostly through overhearing gossip shared between parents and family friends, was only enough for me to half understand what was happening. It was enough, though, to make life seem like a constant cycle of feast or famine, with some peoples' parents getting sudden stock options-related windfalls and other peoples' parents caught (sometimes more than once in just a few short years) by layoffs that always seemed to come as a surprise***.

Then, when I was in college, came the 2008 crash, which hit a year or two before I graduated. I wasn't old enough to have built any real financial foundation for myself yet. (I could certainly have been more responsible with my money as a student, but, trust me, I did not have realistic opportunities to make enough income as a college student to make a significant and lasting difference to my future after graduation.) The result was that I (and most others my age, I'm sure) felt like this terrifying thing had happened, except that I had never had a real opportunity to prepare for it, or to protect myself from it. It also came at the exact right time that my job hunt, and the first few years of just about any career I chose, would almost certainly be greatly affected by it.

I remember senior year of college being this awful time suffused with extreme anxiety and stress, not just for me, but for all of my classmates, enough that I believed deeply that there was such a thing as a "quarter life crisis" and that we might all have been in the throes of it right then. There was so much fear and, because of the crash, we all seemed to be acutely aware that desirable job opportunities were in short supply, and that we were all in direct competition for them.

I feel like a certain shared madness set in for myself, and all my close friends, one that didn't lift until at least a year after graduation. For that first year or two in our jobs, or in graduate school, we all had those typical growing pains that come from entering adult life and taking on the full range of adult responsibilities for the first time, but they were amplified tenfold by the anxiety brought about by the recession. Every little sign that things weren't going swimmingly (and we each encountered a good number of such signs, we're all only human, and learning the new norms of the workplace, or of any given graduate school, was hard work) inspired an outsized amount of angst and worry.

Please follow the link below for the rest of my thoughts on financial fear and the steps I take to try and mitigate it, some of them more useful than others. You'll also find the rather lengthy "footnotes" of this post, which may be helpful background information to the rest of this post. (In writing said "footnotes", I also got the chance to ramble about topics I've long wanted to write dedicated posts about, but haven't  quite gotten around to yet.)

On top of all that, I also chose to go to law school in the shadow of the recession, an extraordinarily expensive bet that so recently did not pay off (even at top 6 schools that'd normally be a relatively "safe" path to biglaw) for so many people who, like me, also made that choice in the midst of the aftereffects of the 2008 crash. At the time I chose to attend, my classmates and I had no way of knowing we'd have the relatively good fortune of graduating into a time when the biglaw hiring market had been robust for years and would, by all indications, continue on that path. People have mixed reports regarding how strong the market is now, some practice groups and firms are definitely doing much better than others, but things generally seem mostly okay.

This fear that comes from being a child of the recession, and all my related fears and anxiety about money (whether I'm on track to save enough, whether it's reasonable for me to someday take a paycut to go into public service, the extent of my financial obligations to my parents and extended family, how K and I should juggle our responsibilities to both our respective families, etc. etc.) aren't something I ever expect to have a complete solution for. To a certain extent, a small part of me thinks it's madness for most of us here in the US to ever not be at least a little bit afraid about money. (If nothing else, it always seems to me that just about anyone's financial plans in this great country could easily be torpedoed by one major bout of medical disaster, even if one is insured, if the insurance company decides to play hardball.)  It's just a question of how that fear should be handled.

I don't have many answers for how, exactly, to best handle that fear. I have some productive methods, namely by trying to be as smart with my money as possible. This includes (a) maintaining a fairly high savings rate; (b) keeping at least a six month emergency fund in cash separate and on top of additional cash savings for any large, planned expenses; and (c) paying off my still-substantial student loan balance aggressively. There are still things I could learn more about when it comes to personal finance management (various tax and investment-related things, for instance), and certain categories of spending that I indulge in way too much and could stand to cut (mainly restaurant and takeout food expenses), but I'm generally satisfied that I have all the skills needed to manage my money reasonably well.

I also have some far less productive methods for keeping the fear at bay, including tracking my finances (the fluctuations in my net worth, the gradual growth of my savings and investments, and the slow shrinkage of my student loan balance, etc. etc.)... more than once a day sometimes, using both Personal Capital (not my favorite, it doesn't work well with some of my accounts) and old, pre-subscription model YNAB (which I mostly use to track expenses, but it also tracks net worth) at the same time, along with an occasional stop over at unbury.me to recalculate how much time I have left until I've paid my student loan in full.

I'll fully admit that this frequency of checking in on my accounts is largely pointless overkill, particularly when I'm not doing much analysis of the data. Yet it did serve one important function in those moments when I felt that largely irrational terror about being fired too soon (leaving me without the ability to pivot to another job without some extraordinarily awkward interviews). Opening up my personal finance tracking apps at those times functioned as a sort of talisman to ward off the fear. It was also, I think, a useful reminder about the realities, about how I would, on the power of my savings, have at least six months (and probably more if I cut some expenses) to find a new job.

Well then, this turned out to be an odder, more meandering, and darker post than I imagined when I first came up with the idea. It's a small piece of some larger ideas I've been trying to write about, so this post is more about background information and setting the scene for those other posts than anything else.(I'm actually quite cheerful most of the time, I swear, particularly about my financial prospects and my career! But whenever I try to write about my thought processes in great detail and what makes me tick, I often end up sounding quite "doom and gloom".)

Anyone else know what I mean about being a "child of the recession", or being otherwise indelibly affected by the things you perceived or thought you were learning about money when you were very small (and probably too young to fully understand what you were seeing or hearing)? Am I the only one who thinks of that year or two after college as being this uniquely stressful and generally wacky time? And not just because of the badly timed recession, though of course, that contributed a lot! Oh, and I couldn't help but throw in a quick mini-review of Kathy Wang's new novel Family Trust at the end of the "footnotes" below (it's relevant, I promise). If anyone else has read the novel, I'm eager to know what you think, but er, please do keep in mind that I feel a great personal connection to what's depicted in it, warts and all. 

*Never mind that even the worst case scenario generally wouldn't result in immediate firing. The most typical result is that one gets between three to six months warning to look for a new job while still getting paid. Sometimes they'll say you have a chance to improve, sometimes they'll be explicit about how you're getting your walking papers. (Our profession is super-weird, between this particular practice, our super-fixed and super-transparent salaries that generally leave no room for negotiation, etc. I'm told that there are some firms that will fire people with less warning, however.)

**The reasons why I think this fear was a natural consequence of spending any time in biglaw, particularly as a minority and/or a woman associate, will get a whole other post of their own someday, but to try and give a sense of it, I've collected a few links that I believe may provide a decent illustration of some of the reasons:

(1) This Corporette thread describes a fairly typical biglaw experience, a somewhat sizable (3-4 hours of work), and urgent (do it today, not Monday morning) Saturday assignment with no real advance warning. I personally think the poster handled it about as well as can be expected. She made the decision to continue with her weekend plans for a few more hours and then did the work that night, even if it that meant working late. Presumably, she asked for and received permission to do the assignment later that evening instead of immediately. And unfortunately, such scenarios are the reality of the job, so one absolutely can't fuss at more senior colleagues about it. But that's probably why she's bringing this to Corporette and not to someone at work.

There are, however, definitely real people in the profession who might have a slightly... kooky... and angry reaction to a junior handling the situation this way, which may be seen somewhat in "Anon Sr Associate's" comment. Back when I first saw this discussion and saved the link, I interpreted it as a harsh and rather loopy response (by implying that no associate should ever allow themselves to be out of pocket for 7 hours on a weekend and that one simply isn't "prepared" for the demands of the job if it happens). I've actually changed my mind, I now favor giving "Anon Sr Associate" the benefit of the doubt, that she's giving blunt but constructive, and ultimately well-meaning, criticism. I've definitely met people who would raise their voice at (or leave a nasty performance review for) a more junior associate for having handled the situation like OP did. Those people would have been incensed about the several hours delay in getting the assignment, even if they didn't explicitly say the deadline was sooner, or even if they actually said it was "fine" when OP emailed for permission to work on it later that evening (ours is sometimes an extremely passive-aggressive profession). So I think "Anon Sr Associate" was conveying that truth in a realistic and ultimately well-intentioned way. 

(2) There have been a few recent news stories of biglaw partners, i.e. people who had won that promotion that so many associates work themselves so hard for, who have nonetheless seemingly been broken by the pressures of the profession, and the even more acute stresses and higher expectations that come from being a biglaw partner. These are obviously not typical cases. Regardless, one attorney claimed to have been driven to commit federal crimes (ones that would end one's career as an attorney for good) because of a fear of not bringing in enough business to the firm to keep his new job. And in another, much sadder story (content warning for discussion of suicide), even well-established partners can feel the same pressure, that they could be fired at any moment

*** I'm always a bit self-conscious as to how being from this background could lead people to assume I grew up so privileged and with substantial enough parental financial resources, access to an excellent public school education, etc. that I can't possibly have known any struggle in life or have anything to complain about. The truth, I feel, is far more complicated than that. I do see myself as extremely privileged. Both my parents (who divorced while I was still in elementary school, which was essentially unheard of in the community I grew up in) have consistently made outsized financial sacrifices for my education. Just by attending the public schools I did, I was amply prepared for success in college, which I know is far from a given with all public schools in the US.

But my family was also not wealthy for our community. Most of my high school peers were not eligible for any need-based financial aid (one scoffed about, essentially, being above the effort of filling out the FAFSA because there was "no point"), while ~65%-75% of my cost of attending college was covered by my institution's generous need-based financial aid policies, and my parents covered the vast majority of the rest. Most of my high school peers have parents who are capable of (and are generally happy to) offer some amount of financial support towards graduate school tuition, but that  also wasn't the case for me. I financed the cost of law school on my own. 

Kathy Wang's new novel Family Trust (affiliate link) is, among other things, an extremely accurate portrait of the specific Asian-American community I grew up in, except that it depicts a subset of that community that is a big socioeconomic step or two above mine. It seems that the subset of the community that she describes was not as badly affected by regular tech industry layoffs and the like as mine. Her novel also reflects on the impact of the "bamboo ceiling", how difficult it is for Asian-Americans, both from the generation that immigrated here and the one that was born here, to be promoted past a certain level at many big companies, and that's an experience that the characters in her novel and the people I grew up around all share. (I highly recommend her novel, by the way! I may write about it in more detail at some later date. The observations captured in the novel are extraordinarily sharp and incisive, though that makes the experience of reading it a bit... complicated for me personally, as I know that community so well. I feel strongly that her book perfectly captures the American experience of people like my parents, their friends, and I, and this is both for better and for worse.) 

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