Is Company Loyalty Costing You A Fortune? Here’s How I Lost $500,000 In Three Years

Company loyalty is overrated in this day and age. Long gone are the days of pensions and opportunities to work at one company for life. Due to globalization, being loyal is a suboptimal move.

How Company Loyalty Screwed Me Before

Instead of leaving for another firm, I simply asked my boss in a nice way what I should do if they were me when I was getting aggressively courted. They always told me to stay and simply offered me a raise between what I was getting paid and what I was being offered by a competing firm.

I never pushed them to match because I didn't want to create a hostage scenario of resentment. Wall Street income is relatively absurd compared to practically every other industry, so I found it always distasteful when people complained about their bonuses.

But if I managed my career perfectly, I could have made $400,000 more after tax if I had accepted a juicy, two-year guaranteed income offer at another firm in NYC from 2010-2011. I left Wall Street in 2012 anyway, so it didn't matter that I was going from a bulge bracket firm to a lower tier firm. I was never going back to finance.

Opportunity To Work For A Chinese Investment Bank

Even after a four-hour interview with the interested company's CEO in NYC, who so happened to be the eldest son of China's former Premier, I still couldn't take the leap out of loyalty to my firm. If you were a fly on the wall during our interview, you would have thought that I was some type of superstar based on the praise he gave. I stood stubbornly strong like a patriotic soldier and politely declined multiple times after.

NYC is a great place to visit, but pretty much sucks in terms of cost and work/life balance. Besides entering a much more stressful lifestyle for two years if I took the job, I was also hesitant to sell my house in 2010 given the real estate market was still depressed.

Another concern was whether or not the courting firm would actually pay the second year guarantee if the first year performance results were not up to expectations. I heard stories of companies luring employees in with great promises only to welch during the second year. 

What was the new employee supposed to do after getting screwed in the second year but suck it up, sue his employer, or find another job. It's not as easy finding another job if you're coming from a small shop.

The Silver Lining

Although I missed out on some heavy dollars, at least I was able to negotiate a severance package from my firm of 11 years that lightened the blow. It would have been impossible to negotiate a severance if I quit after a two-year guarantee at the new firm. Manhattan is a wonderful playground if you have money. Alas, I'll never know.

One of my regrets between 2007-2012 was not aggressively entertaining other job offers. By 2007, I had been with my previous company for six years and felt tremendous loyalty to the firm. How could I hop to a competitor for more money when my company first gave me a chan

ce here in San Francisco? I now wonder whether the reason why I stayed at my firm for 11 consecutive years is because of my predisposition to feel guilty whenever something good happens.


Loyal dog. Woof

I've been consulting for one firm (Personal Capital) since the end of 2013. I've enjoyed my time immensely and have learned a lot about digital marketing.

I was considering joining full-time starting in 2015. However, I was unable to proceed given I would have had to give up the freedom to write what I want here at Financial Samurai. Compliance is very strict in the finance world and maintaining my freedom of speech through this platform is very important. Besides, you guys would also hate me for going “more corporate.”

Instead, I've been given an offer to extend my consulting services with options that vest over a certain period of time. I'm extremely grateful for the offer and asked out of curiosity whether I could receive health care benefits like my colleagues.

Sitting in one of the open enrollment sessions reminded me how awesome it is to have company benefits. Unfortunately, I was denied because health care benefits are only for full-time employees. I respect the rules and completely understand, especially since the government has some strict guidelines on what constitutes an independent contractor and what constitutes a full-time employee. I just had to ask because health insurance is an extremely important part of wealth preservation.

Making The Best Of A Situation

To make me feel better, I was reminded that I'm free to contract with other companies. Having one company pay for my health care while I do work for another company would seem completely off and I totally agree if that were the case.

But, I have never consulted for any other company since I began consulting for them. Furthermore, the thought NEVER crossed my mind to make money consulting for any other firm out of loyalty.

I have consistently rejected consulting job offers from other firms because I wanted to concentrate all my attention on one company. Yet, given I'm not an employee, I have every right to consult with other companies as well.

I spoke to a number of other contractors and full-time colleagues, and they all think it's fine for me to consult with other firms, just not direct competitors. Many of them were surprised I haven't been contracting with others already.

Given my company loyalty as a contractor, I probably gave up another $100,000 in after tax income in 2014. Of course missing out on $100,000 doesn't just take a snap of the fingers. Hard work is still required. But the point is the same. Having a loyal mindset continues to limit my maximum money making potential.

Company Loyalty Is Overrated

In the startup world it's commonplace for employees to move around every three years. Nobody bats an eye if someone job hops after the third year in tech/internet/startup land. Whereas I'd probably not hire anybody who worked three jobs in the past nine years during my time in finance. I'd be too afraid of flight risk as it takes a long time to train employees to do a good job and engender trust with clients.

The reason for such transience is partially because companies themselves are not that old. Companies often fail and employees need to find new jobs as a result. Startups that grow big tend to hire middle management that suppresses the enthusiasm of early employees as well. 

Companies have also shown less loyalty to employees by cutting benefits and laying off employees more easily during difficult economic times. Employees are forced to look out for themselves. Furthermore, when 75% of your initial stock grant vests after three years, it's also not a bad idea to diversify your net worth by accumulating stock options from a new firm where you can make a difference.

Financial Independence Matters

Since I've built my financial nut, I'm not as dependent on money anymore. I'm the old fogey who loyally sticks around until something bad happens in the work place; much like how the violinist plays on the Titanic until the very end.

If you also have a propensity for loyalty, it's up to us to ADAPT to the new realities of the workplace. If we don't adapt, we'll end up losing out on incredible amounts of opportunity.

It's sad to see loyalty dying on both ends. It may be awkward in the beginning consulting for another company, but who am I to deny other offers, especially if I've been given the green light and have the time? I would like to make at least an extra $15,000 a year to cover the absurd cost of health care premiums for two this year. We should take advantage of today's opportunities. They may disappear tomorrow.

If there's one thing you should show loyalty to, it's to your family. Company loyalty is dead. Respect your bosses and managers. However, when you can, accept better opportunities. Nowadays, the value of a severance package has gone way up. Take advantage!

Recommendation For Leaving A Job

If you want to leave a job you no longer enjoy, I negotiating a severance instead of quitting. If you negotiate a severance like I did back in 2012, you not only get a severance check, but potentially subsidized healthcare, deferred compensation, and worker training.

Since you got laid off, you're also eligible for up to 26 weeks of unemployment benefits. Having a financial runway is huge during your transition period.

Conversely, if you quit your job you get nothing. Check out, How To Engineer Your Layoff: Make A Small Fortune By Saying Goodbye, on how to negotiate a severance.

I first published the book in 2012 and have since expanded it to 200 pages from 100 pages in the latest edition thanks to tremendous reader feedback and successful case studies.

Both my wife and I negotiated six-figure severances to be free!

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Business Recommendation

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Financial Samurai started as a personal journal to make sense of the financial crisis in 2009. By early 2012, it started making a livable income stream so I decided to negotiate a severance package.

Years later, FS now makes more than I did as an Executive Director at a major bulge bracket firm with 90% less work and 100% more fun. Start your own WordPress website with Bluehost today. You never know where the journey will take you!

41 thoughts on “Is Company Loyalty Costing You A Fortune? Here’s How I Lost $500,000 In Three Years”

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  6. Loyalty – that is one of my greatest strengths but also one of my greatest weaknesses. I have been with my company 15+ years. Advancement early on was pretty steady in terms of position and compensation. The last 5 years has been stagnant on both fronts. I am the “go to person” for nearly everything including special projects. I have expressed my desire to move up the organizational chart thereby getting my compensation to move as well. However, I get the same response that they need to sit down and figure out a path for me – has not happened. I honestly think I am “stuck” in this spot because I am too valuable to their success and accomplishments and they would not have anyone to fill this void if they moved me. I thought if I came in every day and did everything asked of me at a high level I would advance and make it to the top. After 15 years I woke up – better late then never but I don’t know what to do. I considered looking elsewhere but my loyalty and fear of not landing a spot at my current compensation level stops me. It is a horrible cycle I can’t seem to resolve.

    1. I’d actively look for other opportunities and just go for it if the company excites you and the offer is solid.

      There’s a lot of excitement at a new place, especially after 15 years at your old place.

      1. I’ve been out of the game for a longtime. I’ll have to update my resume first and then figure out where the best places to actively look without rocking the boat. It seems odd thinking about it having to that. I always thought I would make partner and eventually retire here.

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  8. What I have seen in where there is a single founder or enterprenuer, the guy or gal who was there in the beginning and built the business, there is often a sense of loyalty. That person usually has made a bundle, still feels the business is a personal reflection of them, isn’t worried if quarterlies are off as long as they see the path of their vision is achievable, and treats the people under them with a fair amount of respect because of that personal connection. In other words, they are loyal to their own creation and want to see all aspects of it grow and be healthy. Once that person goes, either dies or is bought out, then the corporate efficiency folks step in, and it’s not about loyalty, it’s all about hitting your quarterlies, squeezing out profit, etc. Moving the company to another country, or dropping suppliers who have provided service for decades for a marginal cost savings, or axing people right before they hit their age requirements for the antiquated pension you had to agree to in the take-over are all acceptable moves. There is no loyalty shown, other than a loyalty to generate profit.

    1. That’s kind of what happened at Goldman Sachs when I worked there as a private company. Once GS went public in 1999, people retired and we hired a lot of “outsiders” who didn’t grow up as a GS financial analyst to where they are now.

  9. I didn’t want to think this was the case, but I do think I lost out on tens of thousands of dollars in income by sticking at one company for many, many years. I stayed because it was easy to stay, finding something better felt too hard, I liked who I worked with so I felt guilt for thinking about doing something else, and also because what I really wanted to do instead wasn’t going to be easy or a quick pay increase. So all in all, a lot of excuses really. But I still think it’s better late than never to go for a change and do something different, which I’m working on now. Sometimes we just have to move past feelings of guilt based on how we think other people will feel, and put ourselves first.

    So, I definitely understand a lot of what you wrote about in this post. I definitely think you’re in a position to consider as well as take on other opportunities. The main question to ask yourself, is how much can you handle before getting burnt out to the point that you’re unhappy from being overworked. You know your own limits better than anyone else, so at the end of the day you have to listen to your gut and do what you think will make you the happiest with the least amount of regrets. It never hurts to try and we can always make adjustments if things turn out differently than we planned. Which as we know can be easier said than done!

  10. Loyalty is dead in today’s world.

    In general… Employers feel no loyalty to employees and cut them whenever is convenient to them. Employees feel little loyalty to employers after they’ve been shafted one too many times in a layoff. Government employees feel no loyalty to their constituents or the citizens they serve given the general level of apathy of most citizens.

    There are small pockets of light in the darkness, but they are rare and growing smaller by the day.

    I wonder what the common man of 100 years ago would think about today’s world. On some hands it’s miraculous, but on a humanitarian perspective it’s just sad.

    I’m loyal to myself, my family, and my friends – in a word, the people I trust. Employers get my skills, my diligence, and my conformance to their requirements, but not my enduring loyalty.

  11. Loyalty is what I used to have. I worked for a company for 6 years, and saw 97 top executives with 15-30+ years ofservice being laid off by 10am some morning they walked in just like any other day. Although they received good severence package, what I saw and heard for days after is how it crippled them emotionally. I dont think I want to ever go through that. To me a company is a place I earn money, it is purely transactional and I do my part. That is all it is for me. I no longer think I should be loyal to any nor expect the same anymore. It is just business! Whatever I do today, I ask myself does this suit me, no? then move on that is it – simple!

    1. Yes it does cost you a fortune because you become comfortable, dont want to challenge yourself and think oh there is time later. Them LIFE happens!

  12. Loyalty?

    Companies and corporate management never have that toward employees anymore so it goes both ways.

    “whereas I’d probably not hire anybody who worked three jobs in the past nine years during my time in finance. I’d be too afraid of flight risk as it takes a long time to train employees to do a good job and engender trust with clients ”

    Though I bet you’d hire a “rainmaker” who had that work experience if that person could double your profits…

    1. I wouldn’t. B/c to hire the rainmaker would cost “rainmaker money.” There is no free lunch. I want someone who has a history of staying at one firm for at least 5 years, b/c it takes 1 year to train and get accustomed, and YEARS to build a client relationship.

  13. I live in the UK and we have a National Health Service, free to everyone at the point of delivery. I used to be against socialized medicine and had private insurance, but recently I’ve changed my mind. There are a lot of problems with socialized medicine but it kind of places a permanent safety ring around you and your family and provides a sense of security. Whatever happens to your job, you know you wont go bankrupt if you need medical care. As I said, its not perfect nor moral because some people who have never paid any tax or contributed to the system will get the same level of cover as me, but no system is perfect. In fact I came from a poor Indian immigrant background and our family used all the medical services frequently. I’m not sure how my father, who was a factory labourer would have been able to afford it otherwise. Regards, Jon

    1. Well, the more you benefit from the service, the more you will be for the service that’s for sure. It s just like in the US on income taxes. Everybody who wants to raise taxes on people making over $200,000 tend not to make $200,000!

  14. I had a boss one time that told me “you have to move around to advance your career”. I also used to work with a brilliant nuclear engineer who told me “nobody is going to manage your career for you”.

    It’s kind of like investing, but in yourself. You invest yourself at one firm and ride the ups and downs for a while with periodic reviews of performance, risks and potential upside. But, sometimes a brilliant opportunity strikes out of nowhere and you have to at least attempt to seize it while you can. Will your current firm be upset? Possibly, but (hopefully) it’s just business and not personal.

    I personally think you should keep up your personal consulting here. I recently made a ballsy attempt to reach out to a firm I know is just now raising capital and considered having you review my resume and email to the CEO. Raise prices if your demand is too high. This seems to be consulting you enjoy, likely doesn’t conflict and can be done anywhere.

    1. Im actually having trouble raising my prices due to the nature of the beast. Ive got a good steady guarantee of hours every month. Since I failed to raise prices, despite consistently working over time, I optimized for lifestyle.

      Happy to do a free review of your resume and email to the CEO.

  15. I think loyalty means a lot and can lead to a good relationship that goes beyond money. Unfortunately, these days, even if such a relationship is established, there’s almost a certain guarantee that it will be challenged or destroyed for one reason or another. The pace at which the business changes means that there are always new jobs, new managers, new positions, and new strategic plans for the company. These can create changes overnight that can make employees or employers (or both) revoke their loyalty. I’m lucky that I’ve been in my current job for about 7.5 years, and there has been a great deal of loyalty, but I’m also very aware, based on past experiences, that this could change, and thus keep my eye out for warning signs.

  16. Gen Y Finance Guy

    I think the short answer is that it depends. There is something to be said that jumping ship too early in your time at a company could end up costing you. So in the form of lack of loyalty you could burn yourself to an extent. But it depends on the industry and what is expectable like what you pointed out.

    I have always operated under the philosophy that you should always keep an open mind. So when a headhunter or someone I know wants to talk to me about a new opportunity I am always open to hearing them out. They be able to make me an offer I can’t refuse. But I am talking about life changing offer not and extra $10 or $20K.

    At my current employer, I am even more apt to have deeper loyalty because of the 3-5 year succession plan for me to take the CFO role. As long as everything stays on track and they live up to their end of the deal I am going to feel a huge responsibility to live up to my end of the deal and stick around. They are making a huge investment in me. And there is a pot of gold at the end of the tunnel and all along the way there.

    However, I still think it is a responsibility of mine to still keep an open mind for other opportunities that exist out there.


    1. Them anointing you as CFO and detailing the timeframe and steps to get there is huge. Just keep that open mind that it might not happen because thugs change all the time.

      Everybody I know who has worked for at least 10 years has felt jilted in some way or another. It’s just life.

      1. Gen Y Finance Guy

        I absolutely am aware that it might not happen. So when we first started talking about it, I made sure I had them commit to certain milestones and investments in me along the way. So even if we get there and it doesn’t turn out the way we planned, I still have made a ton of forward and accelerated momentum in my career.

        The biggest risk to the whole plan is centered around the premis of my boss the current CFO’s departure. His plan is to cash out his options based on a plan liquidity event in 3-5 years. We already have a majority private equity owner. So the risk here is that the current founder and CEO of the company cells his remaining interest in the company and retires and then the PE group decides or whoever we end up selling too decides to bring in management from the outside.

        Which makes me think I probably need to think about how I can set up some sort of exit package in the event this happens. Thanks for provoking the thought.


  17. I’ve done very well by being loyal to my company, but then again I joined them as their 3rd employee and we’re nearing 50 now. I’ve been able to grow my responsibility and salary faster by hitching myself to a rapidly growing and profitable company that’s willing to take risks.

    But I’ve always made a point of ensuring that my total compensation was _at least_ market rate. That’s easier for me to do because I’m near the top of the org chart. It’s also easier now because I have some of the longest institutional memory… and the company values having that body of knowledge over someone equally as qualified but without that direct experience.

    I do think this is the exception to the rule, however. Most of my friends have done very well to move jobs every 2-3 years. For whatever reason, many companies don’t give significant raises anymore and the only way to move up quickly is to jump ship.

  18. Question –

    Why do you pay so much for health insurance? Someone like you I would guess would be in the high deductible, low premium class. Young, healthy and plenty money to meet the deductible if necessary but since you wouldn’t need to go to the doctor often why pay so much?

    I also am in favor of Obamacare for the reason you mentioned.

      1. That’s not far off from what someone at my company pays for health insurance if they have a spouse or a dependent, so health care benefits, at least where I’m at, aren’t worth a whole lot. I favor a high deductible plan with an HSA at a bank that lets you invest it in equities, with the strategy of banking your entire HSA contributions year after year and paying for out-of-pocket costs with cash. $650/month for a single person seems too expensive – might be worth considering other options?

  19. FS, these are your feelings about ‘loyalty’, so they must be correct. But I urge you to take a second look at your strict definition, particularly about your current contracting opportunity. ‘Loyalty’ is easy when the money flows and the sun shines bright. Do you see a reciprocal ‘loyalty’ from your client? Or from the ‘poaching’ firm, where you would be FIFO? Just asking.

    Another subject caught my eye. Do you think your readers would be interested in hearing about your evolving experience and enthusiasm for Obamacare? 16 months ago, you pushed pretty hard for it and seemed to doubt reported downsides. Sorry the hammer got dropped on you, but $15K for two (even after taxes) is what this new market bears. Lots of new data and information available now, please keep us apprised.

    1. Like I said, I’m generally loyal to the very end. I think I am actually MORE loyal if the company is in trouble because I want to stay and fight for the company’s survival. It’s easy to want to find other opportunities when the going gets tough. There’s a big part of me who likes being the underdog to prove others wrong.

      Regarding Obamacare, whether Obamacare would have happened or not, I would still be paying $15,000 – $18,000 after taxes for two for a Silver level health plan. Yes, I agree, spending $22,000 – $26,000 in gross salary on health care is absurd, but the government says I an afford it, so there’s little I can do.

      I am totally fine with subsidizing healthcare for lower income groups. My due diligence on subsidy amounts by income for Obamacare allows me to understand the system quite well. Genetics/disease doesn’t discriminate among rich and poor, and I don’t believe anybody should have to suffer b/c they got an unlucky break with health.

      Go USA!

  20. Having one company pay for my health care while I do work for another company would seem completely off and I totally agree if that were the case.

    Why? What is so special about healthcare? It ultimately has a dollar value. Say it’s $20k/year. What is so special about that particular $20k per year that it earns your complete exclusivity when that exclusivity is not otherwise contracted or expected? Would you say the same thing about a company paying you with $20k worth of options in addition to cash compensation? (“Having one company pay me in options while I do work for another…”)

    Healthcare is just a form of non-cash compensation unless there is an expectation of exclusivity. And many full-time employees moonlight for money even with that expectation in place. (Not that that’s right.)

    On your broader topic, I stayed at my last company for eight years, which was about five years too long, out of a false sense of loyalty. (I played a key role and the CEO would always jokingly say I’ll kill you if you try to leave.) About six years in a had a chance to jump over to a friend’s company, but didn’t out of loyalty. That company was acquired shortly thereafter and I suspect I would have done pretty well in that deal. The company I was at could never quite get its act together. Ooops.

    1. Agree about it being off for one company to pay for healthcare while one contracts for multiple companies. The issue is due to my default setting of “Loyal Soldier,” I NEVER considered contracting for anybody else.

      The post’s goal is to talk about how loyalty could be a detriment to wealth building because so many of us automatically assume the Loyal Soldier stance. I was at my precious firm for 11 years and turned down offer after offer after offer. Looking back, the final turn down was a net negative move from a financial standpoint. From a happiness standpoint, I think I made the right move to stay because the transition to early retiree/unemployed writer was easy.

      1. That first sentence was supposed to be a quote, I actually don’t agree with this. I think it is just another form of compensation and shouldn’t engender any particular burden of loyalty. That’s what I tried to articulate with the options example.

        1. I see. Well, I do believe from a company’s perspective it seems off to pay for healthcare to a contractor if the contractor contracts anywhere else. But I think the bigger issue is that there are laws in place that employers must follow to clearly delineate betwren employee and contractor.

          There are cases where employers decide to just hire contractors for years to save money on benefits and such. I think the government is trying to protect independent contractors from getting taken advantage of (could be wrong). The laws are there to help companies make the most informed decision on their hiring decisions.

          One solution is to ask for a “medical credit” or simply a cash raise to cover the medical expenses or whatever. It’s really just semantics given as you say, healthcare benefits is just a cash cost/benefit.

          Good post to read:

          1. If you are a contractor/consultant that is incorporated (LLC, S-Corp) then you can avoid the grey areas of whether you are an employee or independent.

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