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.
I received 3 new job offers since my layoff in February thanks to being well prepared and planning ahead. Some points above are universal, but others are more specific to government regulations or industries so your mileage may vary. Losing a job is one of those things where we don’t think it will happen to us, until it does. So the important thing is to be proactive about it and not wait until it’s too late.
Random Useless Fact:
Pit bull dogs are banned in New Zealand, Germany, Singapore, and many other countries due to their tendency to be aggressive.
It’s great that you were jump back on your feet after being laid off with better prospects 🙂 I worry about my own stability at work and I think it will be tough for me to find another job that will pay the current rate I get lol.
At roughly 5% unemployment rate, Vancouver’s labour market is in a pretty good place compared to the country’s average. I assume that’s part of the reason why lots of people are moving here which makes housing really expensive lol.
Great tips, especially on keeping some time in your bank, assuming that you don’t lose it for the year. ON top of that, if I were to get let go for any reason other than performance, I would get half a week of pay per year of service, and with 11 years of service under my belt, this would be another added cushion.
11 years is a long time. I hope you get a nice pension with that too. 🙂
Your comment on working at Amazon for less than 50% of your previous job is interesting on a couple of points. 1) You were willing to work even at a lesser wage rather than live off the system. A lot of welfare people do not know what it is like to have to work for a living. Just so some of you don’t have a hissy fit, I have nothing against welfare – for those that deserve it. Having three generations in one family with not one person being able to work makes one wonder a bit about how the system works. Interesting documentary currently on PBS about eugenics – not that I believe in it but interesting non the less. 2) You were/are better able to appreciate the money that you earn as making a living wage is not the same as making a middle class wage. I hope I do not lose my current employment any time soon as I am retired. The only way out now is down – six feet. Make the most of what you have now while planning for the unknown future. Better to be the ant than the grasshopper. As far as dogs… Read more »
I think part of a dog’s behavior can be explained by its ancestor’s genetics and how they were bred. But the other part is from how the dog was raised. Just like with people, there’s a wide variation of intelligence, natural assertiveness, and physical abilities along the population.
Hey Liquid, hope you are doing well. This is a great article, really enjoyed it! Would love to see you cover a bit more about the recent stock market downturn – your thoughts, opinions and strategies. Thanks 🙂
Sorry, I was late seeing this comment. I think I briefly blogged about it. The downturn in 2020 was a larger move. I discussed that event in good detail.
Part of how people handle corrections depends on what they did before to prepare for it. When there is not much news is often the best time to plan what one needs to do when the next big downturn comes. 🙂
For example, what I’m currently doing is selling put options and buying value stocks. When the market corrects again I’ll be in a good position to rotate out of my bond position, buy stocks at lower prices (via option assignment), and not have to sell my long term holdings.