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
Manage Your Finances In One Place: The best way to become financially independent and protect yourself is to get a handle on your finances by signing up with Personal Capital. They are a free online platform which aggregates all your financial accounts in one place so you can see where you can optimize. Before Personal Capital, I had to log into eight different systems to track 25+ difference accounts (brokerage, multiple banks, 401K, etc) to manage my finances. Now, I can just log into Personal Capital to see how my stock accounts are doing and how my net worth is progressing. I can also see how much I’m spending every month.
The best tool is their Portfolio Fee Analyzer which runs your investment portfolio through its software to see what you are paying. I found out I was paying $1,700 a year in portfolio fees I had no idea I was paying! There is no better financial tool online that has helped me more to achieve financial freedom.
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
Regards,
Sam
I’d try to convince my wife that I’m going to be a blogger full-time :>. Right now, she laughs at the notion; likes the security of a steady salary and benefits. At the rate the economy’s going, who knows, maybe I’ll soon have to test her!
Why would she laugh at making $100,000 a year blogging?!
This post made me think of so many things! With your plans, unemployment sounds like a good thing. :) I just wrote a post about a family surviving unemployment, and the wife said the real key for her husband was to not get depressed about his job loss but instead look at it as an opportunity. He did just that and went back to hobbies he enjoyed and took up new ones like yoga. He eventually did get a job, but that mind shift made all of the difference in his attitude, which is exactly the type of mind set you are advocating here.
I am also so impressed that you have 41!!! posts written in advance.
Yeah, I am the perennial OPTIMIST! I love to see the good in everything. Hence, if I find myself suddenly unemployed, I would make the most out of it. It would be shocking at first, b/c we all feel we deserve to be there, but after a while, it’s about doing the things you’ve always wanted to do.
41 written posts in the queue is somewhat ridiculous, that it has forced me to write about topics that are not time dependent. The bad thing is that I FORGET sometimes what I’ve written, and end up writing something very similar and wasting my time! After the 20th pending post, I got that wake up call, and things are better now. There’s always just too much crazy stuff to write about in the world i.e. S&P downgrade, $50,000 free money for homeowners who pay their bills on time from the government etc.
Anybody who gets blown out should use it as massive motivation to join a competitor and prove your existing firm wrong! It’ll be so fun!
Wait a minute. Did I hear you right? The government is giving away free money for paying bills on time?
Yep! If you are an on-time paying homeowner, the government rewards you with $10,000 a year for five years! Yihaw! http://www.financialsamurai.com/2011/07/11/free-money-from-bailout-government/
I would be just fine if I got laid off tomorrow – however, like you said, being the best eliminates that possibility in all but structural changes. If I was laid off, I would re-group, work on maximizing my side incomes, and search out another job.
I agree. I would be in a similar boat. I would just come up with a new plan and start tackling it. Great post Sam. Helped me realize I might need to re-evaluate some priorities.
“only the paranoid survive.”
Love that quote. I’m definitely the paranoid, conservative type.
Travelling is my next big goal and work is what’s holding me back, so that’s what I’d do if I lost my job. I might even look at cobbling together a couple of fun PT/freelance jobs assuming my partner could carry the weight of our burden for a while.
Hey, that’s what partners are for, carrying the burden :) Having a sugar daddy to rely on as you go and do your own thing is nothing to feel bad about. I wish I had a sugar mama myself!
There are so many freelance opps out there, its nuts!
Well it’s been 8 months, and things are slow, but slowly picking up! Hubby brought up an idea to open up a business together. I don’t know if he was serious or kidding but I hope he was serious. I would love to pursue that dream with him. Until then, it’s freelance freelance freelance!
Hang in there! Good things will come, just you wait! Give your hubby a nudge to start executing that good idea!
This is an interesting scenario. I would actually enjoy not working a 9-5 job. it is my goal someday. But for now I appreciate the health care benefits and the paycheck too much. However, i do live very frugally and save what I can so if I was suddenly unemployed I think I would try my hand at other ventures to see if I could make a go of it. Having my house paid off (which will hopefully happen very soon) will give me a lot more peace of mine and confidence to try new things. And the 99 weeks of unemployment sure wouldn’t hurt! Unlike you, though, i don’t think I would be so willing to travel extensively as I am too attached to my frugal ways. I don’t think I would change my lifestyle much regardless if my income dropped by 50% or increased by 50%.
I’m pretty attached to my frugal ways too, but I’m trying HARD not to not live it up a little. Life is going by so quickly that I will be severely disappointed if I don’t do a lot of what I want to do.
You are in a great position to have a stable mindset and lifestyle even with a 50% income drop! Nice!
Funny, I was thinking something similar recently. If I were to be let go, I would definitely spend more time blogging as well. I always plan for the future and would be fine financially. There is much comfort in this to me. Nice article.
Sounds good WOF! Feeling good financially about your future is a wonderful thing. It allows you to do more now and take more risk.
If I was let go I’d definitely end up spending a lot more time online. I’d also try to visit family for a bit and get some new stamps in my passport! -Sydney
[…] 22nd, 2011 Financial Samurai Leave a comment Go to comments On Yakezie.com, I write a post about what I’d do if I got laid off tomorrow. Go check it out. I am the perennial optimist and try to see the good in everything. However, […]
In my case, I would work on my sites harder and probably get a couple of certificates on the side in order to increase my chances of getting back to work in case the side income remains puny.
I don’t know how you can do it with 20+ posts in the queue!
Getting those certificates and more education is a no brainer! Good stuff.
I found an idea for the posts in the queue. Will think about farming em out!
Our plan in the event of a layoff is in two stages. The initial three-month steady-as-you-go, and the next three months’ sell-everything plan, where we move out to the country place and slash bills down to the bone.
“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.”
I have been to all the countries you listed in SEA and would be happy to give you advice – if you get laid off. Also, if you go – you have to add Laos – it is a WONDERFUL place!
I’ve been to Thailand, Malaysia, and Indonesia, but I’d really love to check out Cambodia and Vietnam. I’ll ping you if and when I go!
Thankfully, my eyes have been opened to the many avenues of making money online. With the extra time away from my job, I am confident that my wife and I could make ends meet. I think we could even survive if she lost her job as well! Having 2 side businesses really helps our financial situation. :)
Nice job having 2 side businesses! What is the other one besides the blog?
When I was in college, I couldn’t handle being a full-time student and working part-time at Baskin Robbins. How do you handle a full-time job and two side businesses? You must be a super-tasker.
I would definitely apply for unemployment first. Then I would spend 25 of 50 hours every week I would normally spend working at my day job onto my blog. The other 25, I would do day-trading.
Any idea whether we can collect unemployment while earning money from our blogs? Careful about day-trading!
Oh, I didn’t even think of that. That’s something worth investigating. I know day-trading is risky, especially if you don’t know what you’re doing, but I would at least give it a try if I were to become financially desperate. Hopefully, I’ll never be in that situation.
I would definitely enjoy spending more time with my wife and kids and pour a lot more time into my online business. Finding time to do everything I need to do is always a challenge for me. This day job is such a hassle! :)
I hope Sam you aren’t on the chopping block? On a positive note I found out from my accountant I’m could collect unemployment insurance from my own company should I go under.
I take nothing for granted. I am nobody and can easily be replaced so nothing will surprise me.
Glad u got insurance!
this is a nice, thought provoking post. i agree that job cuts are likely coming . . . and that said unemployment is not necessarily a bad thing especially for a disciplined person which i believe can be generalized for the Yakezie membership. there are countless things that we take for granted or “forget” in the busy day to day routines we get ourselves into and sometimes it takes a drastic change such as unemployment to snap back to what our real priorities are or should be.
Really impressive post! We all think that we may never get fired, or even if we do, we say “Oh, I’ll get another job in no time”. But stuff happens, things change. Always a good idea to be mentally prepared.
Just curious Sam, but what do you actually do that you get 3-4 years of deferred company compensation, and 8 months of severance. Can you be specific?
If you work anywhere long enough, you’ll gain a lot of severence and deferred comp. If you work for USA for 30 years, u get a lifetime of severance called a pension!
Nice Deflection!
My husband did get let go. Your advice is very good. (Although in Australia we can get unemployment indefinitely as long as we meet certain requirements).
What did we do? Told friends and family, as many were able to help, both of us looked for work and I ramped up my online methods. It has not been easy, but we’re getting through. It is not the first time, but it was easir before as we had no kids. Having children makes it a little harder.
One of the biggest things I keep getting asked ‘How do you cope and stay positive?” For us, it hasn’t been the end of the world, we had some money to fall back on, and lots of help. Besides, all you can do is look to the future with hope and do what you can. No point dwelling on the negative.
Thanks for sharing,
Hi Kylie, thx for sharing your situation and tips. Can you tell us more about indefinite unemployment benefits and what is the max you can get? We get 99 weeks in the US and something like $14-1600/month during that time period ie ~$400/week.
I wonder if mentally, gettig let go is harder for the man with a family thnx to pressures from society.
Awesome post, Sam. I was surprised to see this headline from you since you are usually such an optimist about the economy, but in the forums and here I now see you talking about how you expect things to get uglier by the end of the year. I wonder; are you privy to any information? ;)
I agree with the points and would like to do many of the same things, though my online income and savings are probably not at the point where I could do the travel for 3 months sort of thing. I’d love to break the $50k barrier but I’m nowhere near a fraction of that, haha. I’m still far beyond where I would have expected to be a year ago, though!
40+ posts in the queue is awesome! I have ideas but nothing finished and ready to just hit submit.
Thanks Kevin. It goes back to my post on May 1 discussing selling equities and banking the 10-11% profits. We’ve now had a 20% swing. It’s about being realistic as well.
I firmly believe we will be talking about how much crappier the employment picture will look 3-4 months from now.
We have to look ahead, always.
No secret info from me, I’ve just seen this movie so many times it’s inevitable that mass layoffs will occur unfortunately. Employment is always a lagging indicator.
Ive forced myself to execute the ideas into fully written posts bc the problem is that the draft/idea portion was getting to a couple hundred and unmanageable!
So does President Obama still win re-election with the new wave of layoffs? (I ask because you thought killing Osama Bin Laden made the Obama election all but certain.)
I think this prolonged bad economy makes President Obama likely one term President and if get worse – I think its almost a certainty.
Vegas odds have Obama as still the favored (-125 to -150). But, if my prediction holds true that it will get mighty ugly for employment over the next 6 months, then I think the odds go down to 50/50. If a strong Republican candidate emerges from the field of 3-4, it will be hard for Obama since he has let down the middle class, and upset the wealthy.
I still think Obama wins, for now b/c he looks like he will fight for the people struggling more than a Republican President.
Intrade is the most accurate predictor. Right now he is at the lowest 49.9%
http://www.intrade.com/v4/markets/contract/?contractId=743474
Based upon the predicted unemployment rate next year, I say he’s Jimmy Carter part II.
Rick Perry so far is the lead contender:
http://www.intrade.com/v4/markets/contract/?contractId=656777
If I were let go I would absolutely try a mixture of online income and my own little solo practice…I doubt I could make it but I would have to at least try!
I bet you could make it if your back was against the wall and you had no other source of income besides your website! You got a family to feed now!
I think I can I think I can…
I would freak out! I just got my job. And even though I am bringing in some income from the website it’s still not enough to put me where I want to be in 3 years. But with all of the extra time, I would defintely be able to put more effort into advertising and working on proprietary products.
Don’t freak out! Lol. You’ll just go on overdrive to make good things happen for you! Not to worry!
I was actually laid off from my first two jobs out of college (as recently as in 2008), and in 2008, my boyfriend (now husband) and I were both laid off within two weeks of one another! Eek!
The good news is that the second time I was able to truly enjoy myself because I had learned that I am a very motivated and hard worker, so I need to take the “break” when I get it. Both were over summertime, so that was a plus. I spent 11 days with my family in PA, spent a month in Houston with my boyfriend (I now live here), took a yoga class in the middle of the day, and thought up/created/marketed Frugal Confessions! Now look where I am;).
Nice job hanging in there, spending time with the fam, doing what you want, and keeping a great attitude! That musta been rough with both of you guys let go. But, it sounds like u made the most of it!
2008 was a crazy time. I don’t think we will get that bad again, but I feel things will get worse before we get better.
I hope things don’t get worse!
We would be OK if I was let go. We’ve been living on one income and we have everything we need. If we both got laid off, we probably would sell the condo and take off to Thailand and other cheap locations for a few years. It would be much easier to live on the online income in cheaper locations around the world. I’m afraid the online income might dries up if the economy get worse though.
As a Thai person who went through 3 months of only living on your wife’s salary, going back to Thailand sounds so idealfor youguys if crap hit the fan!!
Personally the best advice I took away from that was the sugar mama or sugar daddy! I’ve give up the real estate space on my ring finger for someone taking care of me. ;)
I’m glad there is still hope for you to find your big poppa! There are are plenty in NYC for sure!
But you are having so much fun with your tenant! What would a rich, really good looking, physically fit, and nice guy do for you?!
I love this one: Find a sugar mama or daddy. What happens if you’re already married and your spouse isn’t that sugar mama/daddy? Divorce is expensive!
And as for your 41 posts already written, that just confirms you really don’t sleep! ;)
Well, everybody knows that husbands spend on average 2x more on their mistresses than try do on their wives. Got to get with the program Jennifer!
Can I just say that I love the fact that you named your car Moose? If I got laid off tomorrow, I’d take the opportunity to really focus full steam ahead on my business and not worry about finding a job. I work where I work because I enjoy it, and because it’s paying my taxes and helping me sock away money for retirement. But if I didn’t work there I’d just enjoy the extra time for my business.
I’ve found that naming my car has helped me cherish and hold on to him longer. I used to have a car problem (a car a year for 7-8 years), but no more! How do I get rid of Moose after he’s treated me so well? :)
How’s your app doing?
“Only the paranoid survive,” I love this quote. I always have a plan b, c etc. There are always options, as you clearly stated in your article. And everyone goes through financial ups and downs. Maintain a solution oriented mentality and don’t let your pride get in the way of making a living!
I lost my job 18 months ago, before my additional income streams were fully developed. I just worked at continuing to develop those income streams and developing new ones. I really love not having to work a “traditional” job.
For people like “us”, losing a job becomes an opportunity. That’s why we are bloggers and internet marketers, etc.. However, far too many people have their entire lives wrapped up in one “job” and that is just a shame. The key to success is having multiple income streams and always looking out for opportunities.
I think I’ve been secretly hoping to get laid off so I’d have an excuse to work 24/7 on my side business and websites! I’ve even been tempted to open a small business line of credit in order to get started full-time.
I would just pour everything I had into my business, and I would give myself a year to earn a full-time salary from my business, and then I would consider going back to work.
Careful what you wish for mate! I think I understand what you are saying though….. perhaps we dont wish to get laid off, but if we do get laid off, we will be excited by the challenges and opportunities ahead. And when we pour everything into our business, I think we will succeed! It’s as if we want some divine intervention.
Right! I would definitely face the prospect a lot differently then I would have 3 or 4 years ago.
My husband is already convincing me to be a full time blogger, if I got laid off it will be an excuse to finally take the plunge I guess.
Sounds like a good potential plunge to me, esp if the hubbie is working! (from dashboard)
Testing 123.
I think you should do it! You are definitely one of my favorite writers. When I write about certain topics, I usually set your writing style and ability before me as an example!
I am recently unemployed, have applied for unemployment and am enjoying this little break. My husband works full time and carries the benefits. This little hiccup does put a monkey wrench in some of our financial plans, but it will all work out. Would love to travel, but so would my husband. So, right now I am getting rid of stuff on Craigslist, and Ebay. Cleaning out the clutter never felt so good!
[…] eat ramen!If I couldn’t get my old job back after a couple years of trying, I’d probably sell 90% of my assets and relocate to somewhere cheaper. The problem with that strategy is that I love it in San Francisco, and don’t want to leave, […]
[…] But, I’m used to it now. I do realize the employment picture is not very pretty and it’s about to get very ugly right before the […]
[…] to see the government extending unemployment to beyond 99 weeks, for new recipients and old. Things are going to get real ugly before the holidays, and we need all the help we can […]