New friend got retrenched - Importance of savings buffer

[Rolf Latham]

Its a GREAT and timely thread Alex

Its the sort of stuff that a human that works in finance for and with other humans thinks about and works through every day, sometimes even at 3 am.

For many peops that we work with a cash buffer for challenge or opportunity is mandatory.

The mandatory nature can be a reduced a little by appropriate IP and TRauma etc insurance.

ta
rolf

 

[chindonly]

I think its a great topic to consider. So many people seem to stretch their finances to the limit and think that nothing can go wrong.

And yet it does.

 

[ZachAnSel]

Hi Alex,

I recommend at least 12 months (more is always better), as we get older especially after 40 years old. Its more likely harder to find job, part of the natural selection I believe. Especially if you get sacked

Yes I agree with you in terms of gratitude, but I want to "challenge" you to help her. But if only she want you to help her. Not offering the money, but help her to find the job and get back to her feet.

This universe drive you to meet her for some reason, and responsibility come with it..

 

[Alex P Keaton]

She's pretty positive she'll find something. She has a lot of contacts, networks a lot. She's a librarian and had been in the job for just 7 months when there were major cutbacks. She wished she had kept her job in local government where it's a bit more secure. Yep I'll keep in contact with her to see how she is going and encourage her.

Yeah I agree these days no job is 100% safe. I am a permanent public servant & I only just found out that I'm not as secure & permanent as I thought I was! There are new public service laws now. In the old days once you were in you couldn't be touched you were there for life, well not anymore. The only way pretty much that you could be sacked was if you were to do something criminal like stealing or assault. I have made myself pretty indispensable, valuable to my team, and there is expansion happening and always a high staff turnover rate so I should be fine but in the back of your head there is that bit of worry.

After I sell my unit, my ppor mortgage will be small at around $100 k with my cash buffer of $80 k in my offset. Loan on ppor is $177 k & its valued at $275 k. I will be using some of the built up ppor equity for my next ip that I'm buying in the next few months. I'm pretty happy with how things are going for me and have around 2 more property cycles to build up my portfolio.

 

[Peter_Tersteeg]

Loosing a job can be a fantastic opportunity. Like many, I think the book, "The Secret", was simply marketing to the masses, but I do also believe in the law of attraction.

When you're looking for something, all of a sudden what you need seems to appear. It was probably already there in one form or another, but you weren't looking before so you didn't see it. You always seem to see a lot of yellow cars as soon as you purchase a yellow car.

Many people loose a job and start a business, or they'll end up in a better job in a higher income after a break. Others simply get depressed and can't figure out what to do with their lives.

The law of attraction definitely exists, but you've got to get off your backside, go looking and grab the opportunity when it presents itself.

 

[lizzie]

I agree that the economy seems to be rapidly slipping - and it's not just the big boys shedding (although they are doing that).

Taking to a friend today who's partner lost her job at a small website/design company recently. Was 3 on staff but they're only getting in enough work for one.

One reason for this - and I am guilty - is that they design websites and logos ... logos can cost up to $1,000 thru them ... I had mine done overseas via online for $150 ... websites can costs $2-5,000 ... having mine done by a home based business for $1,000.

I know we should be supporting business - but with such variant costs and, at the end of the day, it's my money I'm spending - I can't justify the big dollars.

And on a bigger scale in NSW - found out on Friday Ausgrid is shedding 40% of it's workforce over the next 6 months in anticipation of privatisation.

Hubby's mine only has a future life (at this stage with expansion approval) of 2 years ... then around 4,000 will be out of work in one hit.

Last round the mining industry soaked up a lot of the unemployment - who will take up the slack this time? Bit worrying.

We'll be right - can sell a couple of IP's to clear the mortgage and are moving into a cash crop - but there are many who won't be.

 

[devank]

is that they design websites and logos ... logos can cost up to $1,000 thru them ... I had mine done overseas via online for $150 ... websites can costs $2-5,000 ... having mine done by a home based business for $1,000.

Did I design your site?!?
Because I get logo designs done (for my clients) for about $150 through online freelancers and create web sites for $1000 (Joomla CMS)

 

[cimbom]

I'm a bit worried about this atm. We're having an important meeting at work later this week which I've heard is "not looking good". I'm guessing there'll be a number of lay offs. I've been here for 3 years so would get a small payout but it's still very scary. We've only been in our PPOR for five months

 

[Berryskud]

Redundancies now a way of life

I work in the mining/engineering industry in Queensland. We have seen huge redundancies in the last 18 months or so. So many of my collegues, many of whom have 20+ years experience have been out of work for 9 or more months. Its hard going. I have been facing possible unemployment for over 2 years. I am currently on a 6 month contract that was just about to expire in 3 weeks and just got a 3 month extenstion. It makes its makes it really hard to invest when you can't guarantee an income. I've had to really alter my investment strategy and fortunately nothing is really dependant on my income.

I used to leave 3 months pay as backup in my bank, then I increased it to 6 months, now I have more. Its really tough out there. So many very experienced people all competing for the 1 or 2 jobs that are out there.

I am seeing some green shoots. Few construction roles appearing but until the dollar drops and salaries drop I cant see things improving.

Oh and the 11.11 thing. I see this quite often. Felt shivers up my spine when I sore this post and googled. Definately makes sense to me...then again my numerology puts me as an 11


Oh and the secret and law of attraction - falls in the same basket as NLP. What it boils down to is believe and take action and things will happen. No great mystery.

 

[baby blue eyes]

Hubbie works in pharma, faced redundancies in this industry regularly with takeovers. He has changed areas in the business twice now in two years to avoid being laid off. Lucking he has experience in many areas of the business, that saved one person from redundancy, two more to go.

The payout is good with his service however the process is ego denting....

We have shares held outright, offset and loc as a buffer. Income protection and life insurance is in place. Any redundancy would give a years payout. So we are covered.

 

[lizzie]

Did I design your site?!?
Because I get logo designs done (for my clients) for about $150 through online freelancers and create web sites for $1000 (Joomla CMS)

No - but obviously similar service.

News thru last night that the Newcastle Dockyards look like closing due to lack of work - another 800 skilled workers out of a job in an area that is already suffering from shedding of mine contractors on a huge scale

 

[Sean M]

Loosing your job is not easy that is for sure. I think it is a good idea to always have a cash buffer. It is amazing when I talk to my clients who have bought or thinking to buy a house and they haven't accounted for things like what if they loose their job or if one has a child and they are down to one income.

Unfortunately there really isn't you can get to protect you from loosing your job. Therefore I guess it is always good to make lots of contacts/networks and unless you run your own show your job is never really " secure".

If anyone has been retrenched and wants advice on what to do next, as a thank to all the somersoft people advice to me, you are most welcome to contact myself and I will do my best to put you in the right path.

I deal with a lot of people who get retrenched and sometimes all they need is someone to talk to.

My contact details are below.

 

[allsuccess]

we're a single income family with kids. I have 6+ months cash in an offset account. As few others said, more the better. I'm comfortable with 6 months though.

 

[china]

Unfortunately there really isn't you can get to protect you from loosing your job. Therefore I guess it is always good to make lots of contacts/networks and unless you run your own show your job is never really " secure".

.

I think running "your own show" is no guarantee of security. I think the most secure is some sort of government job in a recession proof field such as health care or essential services.

 

[BayView]

I think running "your own show" is no guarantee of security. I think the most secure is some sort of government job in a recession proof field such as health care or essential services.

Health care worker in a Public Hospital goes pretty close from my observation.

 

[gottabespotless]

I think the most secure is some sort of government job in a recession proof field such as health care or essential services.

I have to agree. At the risk of sounding smug, I am very grateful for my husband's secure govt job. I'm also grateful that he joined many years ago when the super schemes were more generous. He works in an essential service and has done so for almost 30 years. I have never seen any sackings or retrenchments in his line of work in this state. The pay would probably be considered peanuts to most people on this forum (approx. $100 000 pa) but it's always there whether the economy is booming or not and there's no requirement to have to work more than 38 hours per week. If injured at work he is in an old scheme where he will continue to be paid his wage as will I, as his wife, if the worst should happen + big payout. He is also guaranteed a pension for life that works out to be more net money than he brings home now (due to lower tax rate). Certainly takes the pressure off when investing money in real estate. We won't have to rely on rent for retirement income - if there is any, it will be a bonus.

Understandably, for those starting in the same line of work today, the super, etc is not as generous (although paid maternity/paternity leave, etc, job flexibility, and advancement opportunities are much better for them now) but the excellent job security is still there - business is always booming (unfortunately )... if they can possibly cope with the actual job...

 

[Angel]

I reckon the only recession-proof industry is the funeral industry

 

[pinkboy]

I reckon the only recession-proof industry is the funeral industry

My mate who I ride with is a coroner. His favourite line is:

'We don't even advertise, and the work keeps rolling on in!'



pinkboy

 

[devank]

My mate who I ride with is a coroner. His favourite line is:

'We don't even advertise, and the work keeps rolling on in!'

I wouldn't let him drive

 

[pinkboy]

I wouldn't let him drive

Ride as in cycle!

It would be a tough gig!

His jokes are as dry as desert sand!

He has several commercial properties with tenants like Centrelink, Westpac and the like. So I have been feeding off that knowledge. He is my ex soli until he took up his position as Magistrate appointed as the Coroner.

pinkboy