In August, 2001, I started writing about the job market in the first issue of this ezine; the timing was extraordinary because two weeks later, I was able to chronicle the affects of the attack on the World Trade Center, Pentagon on the job market.
What we in America commonly call 9/11 affected job hunters and recruiters alike. With firms not hiring and laying off in large numbers, all of us in recruiting were on a huge hamster wheel of speaking with people we could do little to help. Like theirs, my income slid dramatically, falling to 15% of what it previously was.
As the economy improved, a friend asked a chance question and I was starting to feel good about my prospects, a friend asked a chance question–“Jeff, if you hadn’t had a mortgage would it have been a lot easier for you?” From that, began a series of events.
I had already been working hard to eliminate my debt. At the time I met my wife in graduate school in the late 90’s, I had already adopted a habit of paying off my credit card each month. Getting married meant that I had already paid my own graduate school bill but now needed to pay hers, too (she was going to stay home with our son). we now had a house with a mortgage and I took on her accumulated credit card debt and was working to eliminate it.
When Joe asked that question, I answered that, of course, it would have been easier. He replied, “Jeff, I haven’t had a mortgage in 7 or 8 years.” He told me about owning his home in Princeton and not having a mortgage on any of the other properties he owned.
After speaking with my wife, we began a process of selling our home on Long Island (at the top of the real estate market), buying a new lower cost house for cash, pocketing the profits, and saving feverishly for the next catastrophe.
For those of you who have followed me for a long time, you know that I warned in 2007 about a meltdown in the job market. What followed was worse than I warned about but I was prepared. I had enough money that if my income cratered again, I had a lot of cash available to ride through the hurricane.
So whether you have found work already or are relatively secure in your circumstances, NOW is the time to prepare for the next calamity–the one that may hit you hard and cause you to lose your job.
Here are a few things you can do to prepare for the next calamity:
1. Eliminate your credit card debt. For those of you with credit card bills and mortgages, the past few years may have been hard for you. You may have needed to juggle when you pay your bills. Pay off your credit cards.
There is conflicting advice on how to do this. Some say pay off the high interest cards first to reduce new charges. Others say to get rid of the payments on the cards with the lowest total amounts due so that you feel the success of having accomplished it. Whichever way you do it, just do it!
2. Resolve to take on no additional credit card debt. I have not had to pay a finance charge for a purchase I have made in 20+ years because I pay my bill off at the end of the month. Develop the habit of paying your credit card bills within the billing cycle.
3. Pay off your mortgage or move to a lower cost home. Not having a mortgage payment to make has made riding through the hurricane that has been the US economy the past few years easy for me. Even though we lost money on our recent sale (April, 2011), I made three times as much when we sold in 2005. This has given us the freedom to move to North Carolina (June, 2011), research the local market and plan a new purchase there for what will be cash, too.
4. SAVE MONEY! While you pay down your debt, save money in accounts you don’t touch specifically for emergencies like job loss. Without a cushion and with debt, you can sink under the weight of your obligations.
5. Increase your income and save it. If you changed jobs twice in the next five years and earned $10000 more each time and received a 3% raise in years 2 through 5, here’s what would happen.
Year 1: + $10000
Year 2: + $20300
Year 3: + $30,609
Change jobs again Now you have your original $10000 increase PLUS a second one.
Year 4: + $50,909.
Year 5: + $61,536.27
If the government takes half, you will have more than $30000 saved just by having changed jobs twice in 5 years, getting a modest $10000 raise and a far more modest 3% increase.
And if you start a small business on the side you can save even more.
6: Stop buying crap. The book, “Fight Club,” has a wonderful quote:
“You buy furniture. You tell yourself, this is the last sofa I will ever need in my life. Buy the sofa, then for a couple years you’re satisfied that no matter what goes wrong, at least you’ve got your sofa issue handled. Then the right set of dishes. Then the perfect bed. The drapes. The rug. Then you’re trapped in your lovely nest, and the things you used to own, now they own you.”
This does not mean that you should live with torn old ugly stuff, but it does mean acting like an adult, setting priorities and not just buying something to feel good or because you want it NOW. Children do that.
I know all of this is obviously but most people don’t do it and lurch from crisis to crisis unprepared.
You do not have to repeat the hardship you’ve experienced the past few months or few years and you can be prepared for the next down draft in your fortunes with a well executed plan that allows you to ride through the next disaster–but you need to put your plan in place NOW!
© The Big Game Hunter, Inc. Asheville, NC 2011
Do you really think employers are trying to help you? You already know you can’t trust recruiters—they tell as they think you need to know to take the job they after representing so they collect their payday.
Jeff Altman, The Big Game Hunter has been a career coach and recruiter for what seems like one hundred years.
JobSearchCoachingHQ.com is there to change that with great advice for job hunters—videos, my books and guides to job hunting, podcasts, articles, PLUS a community for you to ask questions of PLUS the ability to ask me questions where I function as your ally with no conflict of interest answering your questions.