KYJ in 2009 (keeping your job)
July 10th, 2009In light of the recent global financial meltdown and the ongoing uncertainty which surrounds it - with politicians, economists and all market commentators contradicting each other, this is what you can do to maintain your sanity and get ahead:
- Protect Your Job – Stay put with your current job. A new job is a lot harder to find during unstable times like this. Give your boss more than you are required to do on a daily basis; volunteer on a new project, volunteer to stay on some extra hours when required, etc.
- Establish an Emergency Fund – set aside at least six months expenses in a separate account. You should never touch this account unless you lose your regular job or your regular monthly income stops flowing in. This is something you need to do only once in your lifetime. Alternatively, have access to money in times of emergency – like a line of credit on your home.
- Reduce Your Debt – Focus on the debt which is non deductible first – like your home loan, credit cards or personal loans. When you have debt, you are no longer in control of your life. You are instead working hard to pay interests to your financial institutions. If you lose your job, you will be in a more high-risk position than someone who does not have any debt. Stop borrowing more money and concentrate on paying off your existing debts.
- Reduce Your Expenses – Are you really on the cheapest phone plan or do you really need Foxtel with all its channels? Is there a way you can go down a package? When was the last time you visited your gym? Although your gym membership fees are still appearing every month on your bill, do you go? You buy your lunch how often and have how many coffees everyday? You smoke how many cigarettes a day? If you can reduce you expenses here and there for small amounts, it will all add up and turn into a large amount at the end of each month.
- Have An Additional Income Flow – look into generating a second income. You can earn additional money on top of your regular nine-to-five job by starting an e-business, writing a book, doing a part-time job, starting a home business, etc.
- Learn To Invest – If you are not familiar with investments, learn how to invest. This may sound like contradictory guidance in a financial crisis, but a lot of sanity returns to stock markets and property markets – to the point where you can find ‘deals of the decade’ during these times. Speak to experts in the industry – study and learn. It’s fun and useful – possibly applicable now, but definitely for the future.
- Live A Simple and ‘real’ Life – Do you really need that latest iPhone, HD Plasma TV, BMW, and gigantic house? Does your child really need the latest Bratz dolls, Pandora bracelet or would they want more time to play with you? We spend our precious life energy on the weekdays to earn money so we can spend it on the weekends. We work to pay our daily expenses, but we end up spending more than we make on things we do not need. So we go back to work to get money to pay interest on money we’ve already overspent.
- Diversify, Diversify, Diversify – The old adage “Don’t put all your eggs in one basket” is still true to this day. Regardless of market conditions, some sectors will always go up and some will always go down. Try to spread out your investments across different sectors investing across a variety of businesses, cash, real estate, bonds, natural resources, and so on. No matter how sure a bet is, there is always a risk in ‘betting the house’ on something. Speak to your financial advisor on how best to achieve this.
- Relax: Don’t Panic - this is not the end of the world. Avoid unnecessary risks by not making panic-filled emotional decisions. Life will go on, things will change as always so just relax and be in a good position to maximise any potential gains and minimise any potential risks.
- Make it personal – Take time to get to know your advisors – your accountant, finance broker, lawyer and manager at work. Invite them over for a bbq and to meet your family. These are people who can influence your life, give you warnings about unexpected issues and give you a leg up in times of crisis – only if you make it personal.