Now that it’s the second half of the year and the world is crumbling, all carrots have turned into sticks. Company managers all over the world are going to beat their employees into producing more. There’s no more pats on the back and sweet talking to woo the best employees to stay. Hiring binges have now turned to hiring freezes and layoffs are imminent. The most recent Philly Fed Index plunged to -30.7 in August from +3.2 in July, while the US 10-year treasury yield at 2% is signifying a recession. Things are about to get rocky and the latest jobs reports for August just proved the case!
Unemployment still hovers around 9.1% and it’s clear government initiatives to create jobs are not working. You might not think the S&P credit downgrade or political bickering affects you, but you’re mistaken. All our chances of getting laid off have increased, despite how great we think we are.
My mentor once advised me, “If you become the best at what you do, you will never worry about getting fired.” I’m sure many of you try your hardest to be the best. Sometimes though, structural changes happen and there’s nothing we can do. Hopefully during the good times, we’ve built up our savings war chest and developed multiple streams of income to hold us over until the next opportunity. But for now, all of us should be wondering what we should do if we got let go.
FIRST THINGS TO DO AFTER A LAYOFF
* Spend more time with friends and family. It’s good to come clean and share your misfortune. It’s your friends and family who will be there and want to help you out more than ever during these bad times. I’m sure my friends and family would cheer me up and give me some leads to get me back on my feet. I’d also make a strong effort to rekindle the good relationships which have faded over the years. Relationships take hard work, but are also so rewarding.
* Apply for unemployment. I’ve been paying into the unemployment insurance system for well over a decade and I think I will highly enjoy getting some of my money back. It takes several weeks to get your first paycheck after the initial application, so the sooner the better. I’m eligible for $1,600/month here in San Francisco. That’s a good chunk of change.
* Go travel. Nothing says I can’t go job hunting while I’m traveling the world. That’s what the Internet, e-mail, and social media is for. There is no way I’m going to give up this temporary lapse in employment to sit at home and search on the computer all day. I will plan a course of attack for job hunting, and systematically go through the plan while I’m on a cruise ship hopefully in the Mediterranean. The plan is to fully immerse myself in travel for a good 3 months. I’d like to see 10 new countries in Europe as well as travel all throughout South East Asia e.g. Cambodia, Vietnam, Thailand, Malaysia, and Indonesia.
* Look for odd jobs. During my travels, I’d probably look for random jobs here and there that pay cash. I’d probably go online and search for professional opportunities right here in the Yakezie Forums, e-mail corporates who need an online community manager, and probably teach some tennis in Bora Bora. There’s a whole list of jobs I’d do for free!
* Spend extra hours working on online endeavors. With suddenly 12 more hours a day (my normal working hours + commuting time), I will definitely spend an extra two hours a day writing more content and building better relationships online. In fact, I would probably start pitching for clients instead of just having all clients come to me. I’d work hard on running several ad campaigns for the Yakezie Members and work on promoting the Yakezie Writing Contest and enlist sponsors in the process. I think if I dedicated myself to Yakezie.com full-time, we could be massive and create some serious value to our Members and readers.
* Sell your largest assets. If I couldn’t find a job after six months, I’d seriously consider selling my house. The monthly nut is not cheap, even though I’m in the process of refinancing again with rates so low. I could live just as comfortably in a 2 bedroom, 2 bathroom condominium that’s half the size and half the price. I’d give up a deck, a yard, and a couple more bedrooms, but that’s OK. I remember being happy just living in a 300 square foot studio! I’d probably also sell several of my collection watches and definitely get rid of 70% of my clothes. Half the house’s furniture would go since I’d be moving to a smaller place. Other than that, I really don’t own much of anything that’s expensive. Moose, my car for example, might get $4,000 on Craigslist.
* Rent out two bedrooms. Alternatively, I could rent out a couple bedrooms in my house and probably collected at least a couple thousand in rent. If I was really desperate, I’d rent out my man cave in the basement as well, which commands another thousand a month for a total of over three thousand. That’s right, rent ain’t cheap in SF, but it’s much cheaper than NYC! It would probably be really weird living with three other people, but maybe I could get some hard core programmers to help me with my online endeavors!
* Find a sugar mama or daddy. The secret to early retirement is to find a working spouse. Therefore, the secret to living well unemployed is to just find the same thing! You can go on Match.com and OKCupid.com to easily find a lonely well-to-do person. You’ll just have to spend time getting into shape, working on being charming, and finding yourself some new threads!
* Rebalance your 401k. It’s important to keep track of your 401k and rebalance it to reflect your latest financial situation.
* Consider never going back to work. If I get let go, and the division/office/department still exists, I was obviously not good enough to be employed. I’d be tempted to go to another company and compete against my old firm to prove them wrong and give them the big “F-U”. But despite that undeniable joy to succeed, I’d seriously consider never going back to work. My dividends and CD interest income is enough, and I’d also get 3-4 years of deferred company compensation, and 8 months of severance. Finally, I’m sort of surprised, but after spending a couple years not paying attention to online income, I’ve realized that my online income has surpassed my passive income, which took over a decade to build. As a result, both incomes added together buys me a lot of banana cream cheesecakes!
PARANOIA & DIVERSITY
There’s a saying that “only the paranoid survive.” In some ways that’s true because if you aren’t thinking about the worst case scenario every so often, you’ll probably start slacking a little and let your guard down. Maybe that’s why I have 41 fully written pending posts on Financial Samurai. I’m probably too paranoid that I’ll run out of things to say, or get too busy that I won’t have time to write. Use paranoia to your advantage and plan ahead. When things go wrong, not only do you have a back up, you have a back up for your back up’s back up!
Diverse income is a necessity as we espouse. Working online has really become a boon for any of us who’ve stuck with it over the years. There are so many people making $50,000, $100,000, $200,000+ online it’s incredible. I can name 20 bloggers off the top of my head who make more than $50,000 a year. You know who they are, and there are countless more who we probably don’t know about. I’m happy that many of us in the Yakezie Network are aggressively building some side income. I’m also sure that if any one of us in the Network loses our jobs and needs some on-line work, there will be an outpouring of help from the team.
Let’s hope we never get prematurely let go. However, even if we do find ourselves without work, we have a wealth of income opportunities thanks to the online world and all our years of implementing sound financial decisions.
RECOMMENDATION FOR BUILDING WEALTH
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It’s 2015 and the bull market continues. Make a decision to be wealthy by taking control of your finances! If you plan to quit your job, don’t. Get laid off instead and negotiate a severance package!
Updated for 2015