Unemployed IT Story
A reader posted this unemployed IT story to aussie contractor website www.Brainbox.au.
I thought I’d send you this one as a warning or a lesson. I’m not sure what the moral is, I guess its don’t be too greedy.
Seven years ago, I was contracting in London for one of the largest companies in the world, and earning a very nice rate too. They offered me a permanent job heading up one module of an Internet project, which I accepted. The salary was £120,000 which at the time was about $300,000 a year. Not bad for a 28 year old!
Anyway, they released the application and it was a massive succes. The press reported it widely and it was the envy of the world. They promoted me and gave me a bonus of almost $1m. Journalists asked me for interviews and I made appearances on CNN and CNBC a couple of times to talk about the project.
Flat in Chelsea
I moved into a flat in Chelsea, one of the fanciest parts of London. I bought myself a new Porsche for my 30th birthday. I’d eat in the fanciest restaurants in London and go out almost every night, charging the lot to my company credit card. I often flew to foreign offices to advise them.
A few months after moving into the flat in Chelsea, I met one of my neighbours who was a Danish model. We hit it off and started having an on-again off-again relationship. She often went overseas on shoots, so I had the advantages of having a girlfriend, but also lots of space.
My company’s share price was going through the roof. I invested heavily in the discount shares they offered me and also invested almost my entire pension in it. I became addicted to share dealing as a way to make easy money.
So, I borrowed large amounts of money and poured it into the market. If you’ve got a good job with a big company, it’s easy to get credit. They don’t ask too many questions and it would amaze you how much I was able to get my hands on. I bought a lot of speculative tech shares and the like, but also quite a few blue chips.
Company Lying About Balance Sheet
In a huge shock to everyone, it turned out the company I worked for had been lying about its balance sheet. One month, everything was going fine, the next we were all out of work. They shut down the entire office building and over 1500 people lost their jobs in the London office. They gave me one week’s notice.
The share price plummeted and my pension and share options became worthless. I was already getting a lot of margin calls when the other speculative shares crashed at the beginning of 2008. Now I had massive debt secured against worthless shares and no job.
I looked around for another well-paid job in London, but there was nothing. I moved out of my flat, sold the car and moved in with my girlfriend. She didn’t like coming home from shoots and finding a broke guy messing up her flat, so this didn’t last long.
Living with Mum
Now I’m back in Australia living with my mum. I’ve managed to fight off bankruptcy a couple of times and am now on an agreement where I pay my creditors a relatively small amount of money every month.
They call and send letters every day and there’s still no guarantee I won’t be declared bankrupt. I’ve been looking for a Project Management job here now for over a year. I’ve had a few interviews, but no luck. I’m working in an admin type job at the moment just to keep the money coming in.
I’m still amazed at how quickly everything in my life changed. Next time I’ll be more careful to protect myself against unemployment and the stock market.
IT Contractor Comment
Readers, this guy was hit by the last downturn in 2008. It was the credit crunch that caused this unemployed IT story.
We normally get one major downturn in the stock market and contractor market per decade.
We haven’t had one since 2008.
Contractor Rates Rising
Once again the Stock Market is booming, the property market is booming and contractors rates are rising by 6.25% a year. That’s well above inflation.
There must be other contractors out there who are doing the same as this guy here.
We muay or may not have a downturn this year but one is due soon.
It may be a good idea to make some of your assets cash. You should have enough in cash to last a year.
I know it is tempting to use your money to make more money.
However, you need a safety net.
Contractors Caught Out by Credit Crunch
This was not the only contractor who got caught out by the credit crunch.
There will be others this time too.
As Warren Buffet said, “It’s only when the tide goes out that we see who is swimming with no trunks”.
The tide will turn as some stage. Get yourself some trunks.
Learn the lessons of this guy’s unemployed IT story.
For those not convinced read further heart rending Unemployed Stories from the last downturn.