"The Worst Is Yet To Come"

[ernie]

http://www.theage.com.au/news/busin...-is-yet-to-come/2009/04/27/1240684397986.html

I am one of those who voted "Yes I am at risk in the next few months" in the "Are you Concerned about your Job" thread. It is so bad at work that I can literally be tapped on the shoulder in the next hour and be told to pack up my things. My industry has just been hit pretty bad. Anyway, I read the article above and while I am still ok, I thought I would ask what things I can do to prepare for the worst. Here are some of the things I have been doing:

1. Reduced non-essential expenses (going and eating out, movies, etc)
2. Putting all spare income into the offset account -- sadly this means no buying investments, especially those that would require debt
3. Deferred big ticket purchases (no big screen tv or new car)
4. No overseas holidays

It has been nice to watch the offset account balance growing, although I still think that if my personal situation got better I would be using the money as a deposit on an investment.

Thanks in advance!

e

 

[want2bewealthy]

In a 'worst case' scenario, depending on your available equity, 'Capitalising interest' is a useful tool.

Although I do prefer to leave as much equity untouched for my greater plans in the future.

 

[GIDDO]

Hi Ernie,

I empathise with you ernie, it must be a shocking feeling for you.
Particularly when your aim would be as most of us here to become independant of job income. It's just that you're not quite ready for that yet.
Although Kev wants us to spend I am sure you are doing the right thing saving as much as possible.
As for the article, looks like a lot of scary drivel to me, but then I am sitting in a different place to someone whose job is currently under dire threat!
The healthcare industry is still short of people if you are talented in that direction.
Good luck

 

[Reach]

Ernie, I can completely relate to your situation..

I have been contracting for over 2 years, and have been on a month to month renewal for the past 5 months - sometimes not getting notice of extensions until the day before the current contract expires!!. Its very tense indeed to wait for my next purchase order to be renewed.

I have watched most of my fellow contractors dissappear, and it seems there isnt many left

I have been waiting for approval to go full time - or to be replaced - which thankfully will *should* next week. After this length of time Im just happy to be coming out of stasis!

I have been following the same advice as yourself.. saving money, and reducing expenses to carry over any enforced break I am required to take ;p

I *think* have enough reserves for about 12 months - but its difficult to say with my wedding .. and honeymoon! happening before the end of the year.

Worst case scenario Mrs reach and I will be enjoying the pleasures of the gold coast rather than somewhere in Asia, and will need to start renting again. But who know?

If I do get a secure position however - it will be a great oppurtunity to pick up another ip. Heres hoping!

All the best with your job! Remember to keep you eyes and ears out.. there are oppurtunities.. you just need to know where to look.. and know the right people to ask!

W2BW - Capitilising interest scares me a bit - but yeah it can buy important time. It is about cashflow - but it not something I would consider in my personal situation unless I absolutely need to

Reach

 

[ernie]

Thanks for the replies so far. I am trying my best to stay positive. As they say, "hope for the best, prepare for the worst". This is actually the first time since I got out of Uni that I have not been investing and I am suffering withdrawal symptoms .

 

[depreciator]

It's a terrible feeling, Ernie.

Back in the early 90s I worked in advertising - writer.

We worked in writer/art director teams.

It was a bad time for the industry and people in our agency started getting the punt.

One Friday afternoon, it was the team in the office to our right. Mid afternoon they were escorted from the building with their stuff in a box.

The following Friday afternoon, it was the team in the office to our left who copped it.

So the next week, my art director - Garry - and myself just packed all our stuff up in anticipation of our Friday afternoon demise.

We were at lunch on the Friday and I said to Garry: 'Hey Gaz, you know it's been happening Friday afternoons? What if we just don't back to the office?'

So we stayed at lunch that day.

Then every Friday for the next six weeks, we went to lunch and didn't come back till Monday.

Then we started to unpack our boxes.

No idea why we escaped the axe.

Scott

 

[The Y-man]

No idea why we escaped the axe.

Scott

That's simple - you were never there when the people with the envelopes fronted up - so they had to postpone it a week every time We had to delay serving the bad news once, becuase the staff in quesiton called in sick on the day! (must have had premonitions...)

The Y-man

 

[The Y-man]

1. Reduced non-essential expenses (going and eating out, movies, etc)
2. Putting all spare income into the offset account -- sadly this means no buying investments, especially those that would require debt
3. Deferred big ticket purchases (no big screen tv or new car)
4. No overseas holidays

5. Stay healthy (despite stress and everything else).
6. Invest time in studying (some new skill, honing up exisiting ones)

The Y-man

 

[HiEquity]

7. Maintain and refresh contacts in your industry for any openings that may be coming up elsewhere. In any downturn there are winning companies as well as losing ones.

8. Build contacts with recruiters for your industry and get your CV out there!

9. Prepare to move interstate / overseas as may be required to "follow the work".

10. Prepare to take a step down in pay to secure certainty of cashflow, which is more important in these circumstances.

 

[depreciator]

That's simple - you were never there when the people with the envelopes fronted up - so they had to postpone it a week every time

Yeah, but they knew where we ate. We expected them to come looking for us. I think they just cut till they couldn't cut any more without it affecting clients. It was a brutal industry. Lot's of fun in the good times, though. Ah, those were the days.

 

[Aaron Sice]

what a horrible article - that nearly even made me panic - and i never do. then i woke up.

there are TONS of ways to make money in the REAL world.

a bit of self education can get you places, and open up tax effective and further investment doors - that you never dreamed.

there IS more to making solid cash flow other than real estate or your J_O_B.

i'm currently investigating vending machines. i'm back to trading futures after work. i've got more contacts that ever. i trade thru tax effective vehicles. i've got more keys to more doors than i EVER dreamed possible.

all snowballed from investigating the best way to buy a small IP in Beldon in the early noughties and minimise any CGT.

amazing. now, that's not D&G, so i'm SURE we won't hear about it.

 

[craigb]

Blue card is spot on! as i can'tget to following up the opertunities i have in front of me , the ideas, and perserverence i am using is to do all of them at the same time, this is creating a slow road, but i am still traveling, just wish i could get somone to help me out at the moment .

 

[chilliaa]

http://www.theage.com.au/news/busin...-is-yet-to-come/2009/04/27/1240684397986.html

I am one of those who voted "Yes I am at risk in the next few months" in the "Are you Concerned about your Job" thread. It is so bad at work that I can literally be tapped on the shoulder in the next hour and be told to pack up my things. My industry has just been hit pretty bad. Anyway, I read the article above and while I am still ok, I thought I would ask what things I can do to prepare for the worst. Here are some of the things I have been doing:

1. Reduced non-essential expenses (going and eating out, movies, etc)
2. Putting all spare income into the offset account -- sadly this means no buying investments, especially those that would require debt
3. Deferred big ticket purchases (no big screen tv or new car)
4. No overseas holidays

It has been nice to watch the offset account balance growing, although I still think that if my personal situation got better I would be using the money as a deposit on an investment.

Thanks in advance!

e

Hi Ernie, i think you are doing all the right things. Just keep your head up and remember your long term vision. We all go through cycles, its just some of us are in different cycles to others. Remember its always darkest just before the dawn. Also if investing was 'easy' any muppet could do it, sometimes the key element to investing is perseverance. In your current situation, this might just mean keeping a tight ship and building cash reserves.

Best of luck

 

[Aaron Sice]

lets just remember that no one's life ended in the last recession because they lost thier job.

some unfortunates may have lost their house, or marriages broke down.

but losing a J_O_B is not the end of the world. if you do, TALK to your bank about your mortgage and your debts and obligations. get help with a financial plan. if you lose your house, talk to a friend about renting with them, or move back in twith the folks for a while until you're on your feet.

sometimes those that lose everything have a better start at building wealth long term because they can afford to take risks that those with obligations can not.

it can be a blessing in disguise, you just have to pull at the seams a little and maintain a "glass half full" mentality.

 

[Sunfish]

lets just remember that no one's life ended in the last recession because they lost thier job.

Just as long as they survived and reproduced. You need the renters.

Who gives a rat's bum about their hopes and aspirations, You have it all worked out how to retire early, that's all that matters.

 

[Aaron Sice]

lol very true Sunfish, very true. cut to the quick as usual