Your Money > Millionaire in the Making
Millionaires interrupted
They used to make a lot, now they do not. The road to riches is crowded with detour signs.
August 15, 2003: 1:16 PM EDT
By Jeanne Sahadi, CNN/Money Senior Writer

NEW YORK (CNN/Money) They didn't think it could happen to them.

They'd gone to great schools, worked for reputable companies, and done well along the way. They had good jobs with high or even spectacularly high salaries and expectations of being financially secure.

But pink slips and a jobless recovery have diverted their careers and their expectations. And the diversion continues.

Among the unemployed in July, about 16 percent had college degrees, up from 14.6 percent in 2002, according to the Bureau of Labor Statistics. And among those college grads out of work, 25.5 percent were out of work 27 weeks or longer. That's up from 22.8 percent in 2002.

10.9% of job-seeker accounts created so far this month were created by job-seekers with graduate degrees. That's up from 10.4% in July, 10% in June and 9.7% in May.

While everyone knows an MBA who has been laid off, there are no hard numbers capturing the national picture. In a survey of business-school graduates conducted in March by the Graduate Management Admissions Council, about 13 percent said they were not working, although they didn't specify the reasons why. In August 2002, 12 percent said they didn't have a job.

Those percentages seem low to Michael Laskoff, at least when it comes to MBAs from top-tier business-schools, who typically are among the most expensive employees for companies.

Laskoff, a Harvard MBA in his mid-30s who himself has been snared a few times in cost-cutting or reorganizational layoffs, now runs a Web site about issues facing job seekers. He has also written a survival guide for the unemployed to be published by Three Rivers Press in January 2004.

For some of the educated elite, he notes, it's been a tough adjustment getting comfortable with "the new normal" you know, the one with extended job-search times, pay cuts, and a perpetual sense of job insecurity. After all, these are people who used to be high fliers, or had seemingly realistic aspirations to become one.

"When they find out that they, too, are bound by gravity, it's a shock," Laskoff said of those who have had a hard time finding work.

Even though intellectually they can see that the layoffs aren't personal, emotionally, it's like being dumped for the first time, Laskoff said. Sure, others may have experienced it, too, but it's no consolation.

Trying to put panic in its place

Sharon Durling, 46, used to bring home a six-figure paycheck. She has an MBA from Kellogg School of Management, 12 years experience as a bond broker, and three years as a strategic risk management consultant for a major accounting firm.

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She's been out of work for two years and doesn't expect she'll be able to find another full-time or part-time consultant position anytime soon.

So far, that hasn't been an undue hardship for her. She has spent the time retooling herself, volunteering to teach financial literacy in the Chicago projects, and getting a modest advance to write a book about women and money.

Durling also began renting out her 3-bedroom home for some income. She moved into a one-bedroom apartment, where she gets a break on the rent because she shows prospective renters available apartments in the building.

"I'm living in a great deal of uncertainty," she said. "It's not a truly bad place to be, because certainty isn't always certain. Nobody has certainty. And I'm a long way from missing a meal."

Durling has plenty of friends who have been unemployed for a year or more. Some are doing well enough emotionally and financially. But for others the struggle is more acute. One mother who's been out of work for nearly a year, Durling said, is "closer to a panic level."

For her part, Durling has managed to avoid a sense of financial panic. Even so, she does get concerned when she considers how to present herself and the way she's spent her time these past two years to prospective employers.

'Having it made' gets delayed

After a prolonged bout of unemployment, Laskoff has seen former high fliers shift their financial expectations. They now realize the goal is to make a living.

"They've gone from planning scuba vacations in St. Bart's to 'Hey, does this come with health insurance?'" he said.

Durling, who was good about saving some of her big paycheck, used to think she might become a millionaire by the time she turned 50. For awhile, she even thought she might hit that mark a few years earlier right around now, at age 46, in fact.

But given that she's been without serious income for two years, Durling expects that goal will be delayed several years.

Such a goal may be delayed quite a bit longer, if not scuttled altogether, for those who are still paying off student loans from their pricey graduate degrees, have families to support, and weren't diligent about saving when they had the chance.

For all the temporary paper millionaires created by the boom and for all the brand-name degrees under folks' belts, "most of us failed to get rich," Laskoff said.

Not that those who got their degrees from the Harvards and Stanfords of the world won't have a better-than-fair shot at doing well in the future. But, Laskoff said, "It may involve adjusting your notion of what success is."

So instead of banking on a multimillion-dollar portfolio by your 40s, he noted, the goal now may be, "I'm going to have a good stable job in a company with a fair wage and good future prospects."  Top of page

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