Forget 2006, let's go back to '96

Like many of you, I have been waking up in the middle of the night wondering what's going on with the global economies and how the world will look in a few months when we adjust to the new economic reality.  I started thinking about about the world when people lived within their means, took a job for a job's sake, and could plan for the future.  It then hit me hard - things have simply fallen out of proportion. 

When I graduated in '94 there weren't a lot of high-powered careers available to graduates - you took what you could get and worked at it until something better came along.  I actually started off in customer relations for a burglar alarm firm... doesn't make my LinkedIn profile, but it actually started me off on a track that somehow got me here (and I did have some hilarious conversations with London celebs with their alarms wailing in the background).

Let's talk about proportion and focus on the two staples in life - food and shelter.  By 1996, I was flying high as an analyst earning a whopping $30K a year (about the same as an Oracle developer in Bangalore today).  I also purchased an apartment for $100K.  In those days you could borrow 3 times your annual salary - that was it.  The cost of groceries was about $40 a week, and a good restaurant meal was never more than $35 a head.  I'll stop there.  While my salary seems terrible by today's standards, I didn't build any debt and I had a mortgage that was manageable for a property that was fairly valued.  Life was good, and I slept well at night.

Take 2008.  The equivalent salary for a graduate-level analyst is about $50K.  The cost of that equivalent apartment is $300K (6 times the salary), weekly groceries $75 and a good meal $60 (if you're lucky and the wine's cheap).  There's no feasible way you can enjoy the same quality of life without mortgaging yourself way beyond your means and delving deep into credit-card debt.  What's worse is that debt has become part of life for so many people.  And that's precisely what happened, and now everyone's paying the price.

The optimum way out of this crisis is for these proportions to be redressed, however painful it may be.