Oct 172018
 

Last week I lost nearly $20,000 in net worth. 🙁 Parts of the stock market slipped into correction territory. My Amazon shares lost up to 6.2% on a single day, the worst performance since 2016. The market has recovered a bit this week, but I am still in the red for the month. The recent volatility is a stoic reminder that the market can be fickle, and doesn’t care about how much we pray or like it on Facebook.

Stocks and bond funds move up and down without our control. But the one investment that can not be taken away from us is personal development.  When it comes to building wealth, human capital is more valuable than money in the long run. 🙂

Developing useful knowledge and skills is the best way to maintain a prosperous life. Ideally you want to become so valuable that the company can’t afford to give you the pink slip. 🙂 But even the most stable careers are susceptible to a labor shake-up or restructuring. I was employed by the same company for about 10 years. My position certainly felt safe, until I was suddenly let go earlier this year without any warning.  :/

If anyone is nervous about potentially being laid off, below are 8 suggestions to help you prepare for the unexpected.

  • Keep your LinkedIn profile and resume up to date. Recruiters often use online tools to help them look for potential new hires. 🙂
  • Save up your vacation time and treat it like an insurance policy. Any unused vacation days must be paid out if a worker is laid off in my city. I always try to keep at least 10 working days of vacation stored up. This amounts to 2 weeks worth of extra termination pay. That’s a pretty good parting gift. Yay!
  • Build up some cash liquidity or savings to give yourself time to look for other opportunities. Many experts believe saving enough to withstand 6 months of living expenses is enough. I personally prefer longer. According to my stress test calculations (under the employment risk category) I currently have 36 months.
  • Collect work achievements. I have been periodically saving projects throughout my career to demonstrate my thought process and problem solving skills. I keep these files at home with permission so I can update my resume and show off my skills to future employers.
  • Don’t burn bridges. Be nice to everyone because you never know who can help you get your next job. One coworkers who was laid off the same day I was received a call from the same company a few days later. Apparently they wanted to hire him back. He even got to keep his termination package lol. 🙂 #bonusmoney
  • Practice solving problems. Our productivity is correlated with how many problems we can solve. If we are good at finding solutions to big problems then more people will want to employ us for our skills.
  • Explore new careers options. I worked at an Amazon warehouse making about $14.50 per hour, which is less than half of what I was making at my old job. The experience made me appreciate my old desk job a lot more. I also developed more respect for physical laborers.
  • Create a side income. My part time job kept food on the table while I was looking for another full time job. Other side hustle ideas include giving music lessons, selling t-shirts online, or building up a dividend stock portfolio.

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May 172018
 

It’s natural to be upset about losing one’s job. But sometimes being laid off is not so bad. When my company unexpectedly downsized in February I became unemployed for the first time in 10 years. Actually I was still working part time, so technically I was just under-employed. I didn’t have any other jobs lined up at the time. But instead of feeling worried or sad I was happy. That’s partly because I have the resources to last me years before having to work full time again. But I also had a pretty good feeling that this change in my career was for the better. That’s why I was optimistic in my earlier post about losing my job.

I received a big payout worth more than 3 months of my salary. But I managed to find permanent full time work before 3 months. So from a financial point of view I didn’t lose any money. In fact, my income situation has actually improved because my new job pays more than my old job. Hurray! I can become financially independent a little sooner now. 🙂 Furthermore the job I’m currently at is more fun and rewarding than my old job. I also had fun working temporary at Amazon for awhile. But what I enjoyed the most about this whole situation is taking some time off to relax and experience a small taste of early retirement. 😀

And to add icing on the cake I recently received a letter in the mail from Great West Life, an insurance company, asking what I want to do with my previous job’s matching RRSP fund. I’ve been paying into this retirement program for the last 7 years. I couldn’t access it or use the money in any way while I was employed. Since I couldn’t touch the money, I didn’t think it was worth including in my net worth statements. But now that I’m no longer working there, they have to give me my money, lol. It’s a typical 4% employer matching plan so the sum is not that much compared to the 25% or more I typically save and invest personally, but it’s another benefit to look forward to.

 

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Random Useless Fact:

You know your country is in trouble when the national currency is worth less than the paper it’s printed on.

 

Jun 232016
 

I heard this parable on a radio talk show. It explores some important lessons about conventional wisdom, expectations, and opportunity, so I thought I would share it. I don’t know where it originated from here’s a paraphrased version of it.

16-06-janitor-cigarettesThere once was a janitor who worked for a large corporation in the 1900s. Like many working class folks at the time this janitor couldn’t read or write. 🙁 Although he was a quick learner, he never finished school because he started working at a young age to help out his family. Over time many of the other custodians at the company would go through janitorial education and get certified and promoted. But because this janitor was illiterate he couldn’t pass the certificate exams to become a world class janitor.

On his way home he would sometimes pass by a group of men loitering outside a local pub. They would often complain how there was no place to buy cigarettes around the neighborhood. They had to walk 10 blocks away to get to the nearest store that sells smokes. The curious janitor stopped one day to ask the men why not start their own cigarette business close by. “We don’t have the time,” they would reply.

Eventually the janitor decided to open a small cigarette store right beside the pub. He operated the store on his own during the evenings and weekends. It became very popular and he soon opened another location, and then another, and hired people to help his growing business. Then he quit his job as a janitor and continued to grow his cigarette company, which made him a ton of money. 🙂

When a large tobacco company offered to purchase his company he asked his accountant to read the offer letter to him. The accountant was unexpectedly surprised to learn that the successful entrepreneur didn’t know how to read. “You’ve already accomplished so much with your knowledge,” said the accountant. “Imagine where you would be right now if you were literate.” The ex-janitor chuckled and replied, “I’ll tell you exactly where I’d be. I would still be back at my old job sweeping floors.”

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Random Useless Fact:

There’s a piece of land in the far Arctic named Hans Island. Since the 1930s, this nondescript island has been at the center of an ongoing battle between two countries.

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Jun 162016
 

A recent report from the Brookfield Institute says that 42% of the Canadian workforce is at high risk of being replaced by computers and technology in the next 20 years. Suncor Energy is already planning to replace its fleet with autonomous trucks by 2020, which will lead to the permanent loss of thousands of oil sands jobs. Earlier this year Google’s AlphaGo program beat Lee Se-dol, the world’s best Go player. What makes AlphaGo different from other AI programs is that it doesn’t play by any specific algorithm to win. Instead, it learns from its mistakes and plays better after each game, which is similar to how we humans learn. 🙂 In the past automation has been restricted to laborious, routine tasks such as assembly lines in manufacturing. But new breakthroughs in artificial intelligence, advanced robotics, and faster hardware have pushed automation into cognitive occupations, such as driving and customer services.

16-06-42-percent-jobs-at-risk-automation

The report puts a 70% or higher probability that high risk jobs will be affected by automation over the next 10 to 20 years. These “high risk” jobs include:

  • Retail salesperson
  • Administrative assistant
  • Food counter attendant
  • Cashier
  • Transport truck driver

However, there are also low risk jobs that have less than 30% chance of being affected by automation. These are usually higher paying jobs which requires critical thinking, people skills, and tend to be in the science, technology, engineering and math fields (STEM.) These positions include:

  • Trade managers
  • Registered nurses
  • Primary and secondary school teachers

Naturally the careers that require higher cognitive and judgement abilities are at low risk of being replaced by machine or software.

If you believe your job may be at high risk of automation then it’s best to learn some new technical skills or transition into a different position of lower risk. Being good with computers and technology will always help, and as time goes on the technical standards will increase. At one point in time being able to type 50 words a minute was considered a legitimate computer skill to include in your resume. But boasting about this common ability today would just be silly.

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Aug 112015
 

Most Bosses Aren’t Rich

Some workers have a passive outlook on their salaries. They believe their income is based on what their boss can “afford” to pay them. But the irony is that employees have more control over their own salaries than their bosses do. 😉 This becomes apparent when we consider the source of all salaries. Money doesn’t come from our employers. It actually comes from the consumers who buy our goods and services. And the amount of money they pay us is directly proportional to the quality of goods or services that we give them. 🙂 So if we want a raise, we should try to please our customers, not our bosses.

Besides, most bosses aren’t that rich to begin with anyway. A 2013 study found that the average salary a small business entrepreneur makes is $68,000. Let’s say a Japanese restaurant makes $100,000 a year after expenses and employs 20 people. If the restaurant owner gives all his employees a $5,000 annual raise, then his entire profit would be wiped out! It’s a different story in large fortune 500 companies or in professional industries, such as engineering. But 70% of Canadian workers in the private labour force are employed by small businesses with fewer than 100 employees. So for most workers, asking for more money from the boss isn’t going to get them very far.

Wealth in Numbers

So if we want to earn more, we have to set our focus on the consumers. 🙂 Our customer base has an endless supply of money that we can tap into. If that Japanese restaurant mentioned earlier manages to attract just 100 more families to dine there every month then the business can easily earn $100,000 in additional sales every year. Everyone can get a raise and the business remains profitable! 😀 The boss is only one person, but hungry consumers are abundant. There truly is wealth in numbers. Instead of trying to get more money from the employer, we should be thinking about ways to work with the employer to get customers to spend more money. 😉

15-08-possible-universal-language-want-a-raise

But for this to work we must offer something of equal value in return to the paying customers. This means finding ways to make them more satisfied. Create additional value to our product or service. Give consumers a legitimate reason to pay us a premium over a generic competitor. Don’t work to please our boss. Work to please the customer instead. Don’t work for money. Work to solve the customer’s problems. The money will ultimately follow.

If you’ve shown that you can bring a lot of new business to the company then usually the promotion will come to you. 🙂 Talent is hard to find. Your boss knows that if you feel underpaid, you can simply leave and work for a competitor instead.

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