From $124,000 Yearly Income at Age 25, To No Net Income
In 2018 I was 25 years old and brought home around $124,000. I worked both as an employee and a contractor in Alberta and BC: oilfield services, IT, business development, marketing, and financial consulting.
In 2019, this year, it has been about $95,000 – excluding owed wages not yet received. I have 2 lawsuits against a former employer, and a former client. I also parted ways with my business partner and that operation this year bled me tens of thousands. My net income has been -$36,000. If considering paper losses: another approximately -$100,000 in real estate.
The first hand experience from this: that the more money to make, the riskier it becomes.
I won’t make a Cliff Notes of my entire experience, but one of my cases (Wrongful Dismissal) is directly tied to employability.
In Employment Law, the common law entitles a wrongfully dismissed employee, or dependent contractor, a reasonable notice period (severance).
For an employee, this notice period entitlement stemmed from the landmark case Bardal v. The Globe and Mail Ltd. (1960), 24 D.L.R. (2d) 140 (Ont. H.C.) at p. 145. According to that, the notice period is calculated based on these following factors, while not being exhaustive:
- Character of the employment;
- Length of service;
- Age of the former employee and the availability of similar employment;
- Employee’s experience, training, and qualifications.
Thereafter, case law has evolved based on the unique circumstances of each case, and decisions made by justices and judges in courts across Canada. Nevertheless, the goal of the courts was to compensate a wrongfully dismissed employee for damages suffered. The more vulnerable and helpless the employee is, the larger the award – as the lost employment income is more difficult to replace.
In my case, factors warranting the notice period and punitive damages have been:
• Work requiring high level of responsibility;
• Specialized supervisory, IT, and finance responsibilities and skills catering to industrial (including oil and gas) service industry;
• Lack of similar employment available due to extensive education and experience requirements;
• Sensitivity of industry to downturns, and current recessionary environment;
• Inducement to leave former employment and income sources;
• Adverse interference with economic affairs and search for alternate employment;
• Non-competition clause;
• Non-solicitation clause
There are whole sectors of employment law and case law on these topics. But the general consensus is that the more expensive you become and the higher up on the ladder you go: the more of a liability you become, and the harder it is to replace that income (and/or losses).
You also have a larger target over your head.
Higher income industries / businesses also tend to be much riskier, as the earning potential is higher to compensate for risk.
There also are more ways to become suddenly liable for things you’d never imagine yourself to be for so before. This especially if say you are a CPA, CFA, or some other professional dealing with sensitive information or assets, or have the capacity to potentially cause a lot of damage (or profit). I’ve had 2 companies I did work for before threaten to sue me for just mentioning their clients and employees. That obviously did not get anywhere. What happens is employers / clients here then try to squeeze in restrictive covenants and then having expensive legal battles over them.
Education, experience, and credential requirements also rise with higher responsibility and earning power. Most positions nowadays around the $100,000 annual income mark or higher ask for a lot. The 5-10+ years of one’s life to dedicate to get there, also becomes a risky investment.
Trading and equities is another topic, but I had a colleague who went almost $100,000 in the hole over options. He kept shorting the Big 5 and other financial firms’ shares, betting against the price of oil, etc. It may had worked out but the timing was off.