I learned today an extended family member on my wife's side lost their job. This was at a major retailer company as a manager. He was on time, never called in sick, and did a great job. Was there over 11 years as a faithful employee.
The company was consolidating positions. He had been there so long he made decent pay 25k plus a year.
They told him today he had two options. Take 6 week severance and then file unemployment or he could stay on but would lose insurance and health benefits, they would move him to part time hours, and he would have to take a reduced pay. He chose the severance package as with his family the alternative would not have worked.
I think probably since he is in his mid 40's and making money they opted to eliminate positions and put a young buck in doing 10 things for a cheap price. They have very limited savings so he will have to find a job soon because unemployment will not give him the full earnings he made weekly but just a portion.
This goes to show that NOBODY should ever get comfortable. I am very great full I have a successful business and many, many years worth of reserves. Whether working for someone else or for yourself this shows you need to have investments throwing off cash. While you wouldn't fire yourself from your own business there might be times you can't work due to health reasons. The income coming in regardless of if you are sick, laid off from the job etc. gives you the security to weather life's storms.
I agree completely. I hear people say they don't like the risk of investing in real estate, and depending on tenants to pay you, and of course the response is, "Yet you risk everything on the assumption that you will have your job forever?" Having multiple sources of income is a risk reducer.
Great Post Joel!
I don't depend on tenants to pay me. I have buyers pay me. It's a lot better. They have skin in the game.
Saw that all too often in IT. We had several rounds of layoffs there and each one was tougher than the last. These companies simply don't care about people and actually flaunt it as if its some kind of badge of courage. "The business is here to make money". "Have to do whats best for the company".
Well, I'd say that was 50% of the reason why I pushed so hard to go so fast in my investing. I did not want to hit 50 yrs old and have the reaper call me in to one of the cutting rooms to let me go.
We had a guy in our group whose mom was let go 8 months before her pension would have been locked in for years of service. I started much later than when pensions were still on the table. But its that kind of stuff that really hits home.
My aunt, who works at a bank, was the same way. She was about a year or so away from retirement. No pension. But they knew she had her finances all setup and was basing everything on that one year. They dinged her with a 90 day notice even though her branch numbers were great. Just a thing they do to try to weed out the older more expensive managers apparently.
Luckily for her, the asst branch manager got pregnant and quit. But, again, its the reality of exactly what most of these companies will do. And try getting a new job after you hit 50? We saw a lot of those former coworkers really struggle to find new jobs. Some were over a year in waiting. Some were close enough to retirement that they simply gave up and retired. But they took a hit.
So, I agree, don't let the man stick it to you. Be prepared. I love my job now. But I don't ever want to be in a situation again where I tell my wife before I leave for the day, that if I lose my job, we're in trouble. And then have to wait 4 or 5 hours until all the cut calls are done to tell her the coast is clear. Try doing that 2 or 3 times and then see if you're willing to give up a few weekends and nights here and there to build something that at one point I used to refer to as my "ex employee name here" Employment Insurance. :-)
Quite honestly, if I had been at my current job the whole time, I don't think I'd have as many as houses as I do today. They're unbelievably great. So in a way, I like to think that everything happens for a reason and it was actually good for me that I saw first hand how scary the power of the man could be.
@Joe Pickett But if you have buyers paying you, doesn't that mean you have to constantly be selling something to make money? If you are out of commission for 6 months, how do you make money?
Yeah when we go shopping at Wal-Mart I see 70 year old people putting out pallets of freight.
Pretty scary stuff. It's one thing for people to work part time because they want to but for many it's a HAVE to thing in their golden years to supplement S.S.
I read a scary statistic the other day that 90% of seniors have a net worth of 100k or less.
These kinds of things just make you think how bad things are out there.
There is a lot to say about this subject when it comes to income for people. I'll leave my personal thoughts out of it. Since I was 20, I saved, lived below my income level, diversified, and invested. I'm thankful for my grandmother. Before Clinton was president, she gifted money to the grandchildren in an IRA. At the age of 20 I had no idea what that was. During the Clinton years that tax break went away. I wanted to know why my grandmother couldn't put money away into my IRA. So, I started educating myself. If not for that event in my life... I might have been the two full time jobs rent paying adult.
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