Keep Calm and Carry On

 Our world has been disrupted. Covid-19 keeps spreading. Working or studying from home almost feels normal. If we are still working, many coworkers, friends and family are not. Multiple industries have cratered. Among ~400 engineers with notice will need a new job in November, and ~12,600 laid off this year in WA. Far from alone.

 

The expression above is British. During the nightly bombings they slept in bomb shelters not knowing if they would survive. In the morning they went to work and prepared for war. This extended months and years with no clue as to when it would end. Admire the people who went through World War 2 daily despite the hardships. They planned and executed projects to win a four and half year war. Frankly they saved the world.

 

Few people thrive in uncertainty. Who does? It is stressful, hard to make plans, confusing what to do next or figure out your options. Usually are too many choices in life. Second everyone wants to know when is it going to end? But no one knows.

 

Remember this too shall pass. Take a deep breath and pick something to do now. Does not have to be the perfect thing to do. Something else will be next. Just break things down and start small. Give yourself grace to make mistakes.

 

Decisions don’t have to be made immediately. Talk with other people who have been in or are in your situation. There are support groups for near any situation. Helping support other people will help you cope. Create more options by researching industries and careers using your skills. You need plan A, plan B and maybe more during a recession. Unemployment normally covers 26 weeks with a 13 week extension. Not much time to find work.

 

My plan A - Laid off from Boeing Commercial Airplanes, find work within Defense Space & Security or Global Systems. Plan B - nationwide job search for production/manufacturing engineering positions in aerospace, defense and space. Expand target industries if not finding opportunities. Plan C - supplement earnings with gig work. So far networking and implementing plan A.

 

Able to relocate, an option most people don’t have. They have to look for alternate careers in their neighborhood. Look at what is important to your life. Having relocated several times, do not recommend relocating for most people. Difficult to give up family, friends and support systems to start over.

 

If you are in this situation, feel free to reach out to me. Been here before and still saying my prayers. Start by reading Change Comes in a Minute. Adaptability, resilience and resourcefulness are learned by experience. You will be surprised how much you already have.

http://problem1solver.blogspot.com/2020/07/change-comes-in-minute.html  

Shape of Economic Recovery on Your Finances

After Covid-19 is under control, the economy will start growing again. Businesses will figure out how to grow, and new businesses will open. How fast this happens affects your careers, pensions, investments and retirement. 

Economists describe V, U, J and W recoveries. Investors look for forward earnings to price investments like bonds, stocks, mergers, businesses and real estate.

‘V’ recovery assumes after a sharp drop, the market will quickly return to normal. This was the early market opinion, and you can see the quick rally that occurred.

‘U’ recovery assumes a longer period down, followed by fast growth. This assumption lowers the value of investments because of discounted future earning valuations.

‘J’ recovery (or Nike Swoosh) assumes after the drop, the recovery will be slow steady growth. The post 2008 recovery is an example where economic growth was only ~2% for several years. 

‘W’ recovery is the scariest when the market rallies on hope after a steep drop, then bad news causes more steep market drops. The Great Depression is an example. Eventually economies return to growing, but this assumes bear market rallies follow by more bear market drops.

No one knows exactly how the economy will behave, and reading the news is confusing and misleading. Best can do is give opinions based on observations and research. As always “your mileage may vary”. Not an expert.

After the depth of this drop on the global economy, we are starting from a Much Smaller Global Economy. Most small and medium sized businesses are able to handle short periods of lower earnings, but not long earning breaks earning nothing. A good number of businesses will not reopen. Not good for business spending.

1 of 6 workers are now unemployed. They are not buying anything but necessary goods and services. When these businesses return they won’t need all their previous employees with less sales. Eventually most will find jobs, but not necessarily at the same salary. Drops of 10-30% are possible after extended periods of unemployment. Does not help consumer spending.

Business recovery will be different by industry. Hair stylists will lose income this year because we only need one haircut to recover. Travel like hotels, cruise ships and airlines are going to be low and slow for 2-5 years. Small luxuries like Starbucks, meals ordered in or eating restaurants will recover much faster. Delivery services will have continued growth. Oil and energy will start growing from a lower user base. Durable goods will be smaller for a longer period.

Real Estate is going to vary by market: Strong demand for low income housing and apartments. Condos and housing will have lower prices with less qualified buyers. Commercial real estate will have more retail vacancies and lower office space demand with the growth of work at home.

What to Do Now? Decided at my age to lower my exposure to stocks from 40% to 30% in my 401K and hold more money market (cash). Also reduced International Bonds 10% moving to Domestic Bonds to lower my risk. Did not move completely out of the market, but made slight adjustments until think stocks are a good investment again. Investing is easier when you have a long term strategy.

Pensions May be Cut due to low returns. Look at your spending and see what can be reduced or deferred until you know how this will affect you. Do you have assets you can sell you don’t need? 

If your job is secure, the next year may be a good time to purchase a car or home. Major purchases are the most important decisions for your wealth.

I hope not to be laid off, but may have to change industries again. Time to update my LinkedIn profile and create a resume in case. Preparation will help if the time comes.

Survival Actions for Unemployed

Over 16 million have applied for unemployment benefits in the last 3 weeks. Coronavirus has disrupted economies worldwide. Been there several times in my career. You are not alone. 

Here are steps for you to take:

1) Grieve Losing Your Job. Being unemployed is emotional. You miss your routine, paycheck, coworkers, job friends, and peace. Most of us have identity from our work. We plan vacations, visiting family, and how to pay for large improvements, cars or luxuries. Heck, now you worry about getting take out. This is a big loss up there with divorces or losing loved ones. Give yourself permission to go through the grieving process. Your mental health will thank you.

2) Apply for Unemployment Now. Normally unemployment only covers part of your expenses, but the CARES act adds $600 per week until July 31^st and covers freelancers, gig workers and care givers if your employment is affected. Take advantage to give yourself more time to find work.

3) Find Taxi Jobs. These jobs are not careers, but ways to make money during your job search. You can stretch length of your unemployment benefits if you earn money during week. I worked for the Census Bureau twice during 2008-2009 recession.  Supermarkets and delivery services are hiring now. Or start gig work while you look for jobs.

4) Take Survival Financial Steps Now. Look at where you are spending your money and write it down / enter in spreadsheet. Look where you can cut or postpone payments. Internet is necessary, premium movie channels & streaming service are not.

Payment Deferral - Forbearance is a written agreement between the borrower and the lender to move a negotiated number of payments to the end of a financial obligation, eliminating required installment payments now, and preserving your credit rating. Negotiate with your lender for a six-month forbearance (traditionally the standard), then resume payments after the term.

Freeze Your Memberships - Contact health clubs/spas, golf or tennis memberships, tanning, recreational clubs, social clubs, etc. requesting a freeze. This preserves you rejoining in the future when working your new job.

Mortgage Re-casting or Mortgage Re-amortization - If you have been in your house a while paying down balance or made extra payments, lenders recalculate your mortgage based on the new principal balance instead of refinancing. Avoid refinancing mortgage fees and underwriting expenses. I need to do this myself.

[Full credit to Heather Wagenhals “Unlock Your Wealth” and Jim Woods “Successful Investing” & “Intelligence Report” for ideas in this section]

5) Write Down All Your Skills - These are not job titles. Write down individual tasks or projects you have done on all jobs. The skills you used have lead to business successes.

Next you classify these skills in 3 categories - Those skills you enjoy & want to use, those skills you tolerate, and those skills you can’t stand. Preferably your next job will use most skills from the first 2 categories so you’ll be successful.

Reason for this exercise is you may be in a field that is changing or dying. Will be very competitive to find work there. New careers are created every year that use skills you already have. Identifying these skills will help you research alternative career paths forward.

The economy may evolve, but definitely will recover from Coronavirus effects. Future may be different for certain industries. Quite aware could be unemployed in several weeks myself working on commercial airplanes. Not too many travellers for near future, but in a couple years airlines will recover. Meantime other companies will grow and need our skills.

We have the resilience and talents to thrive in the future. Doesn’t mean we won’t be uncomfortable, but we have already overcome and learned much being uncomfortable. And on an Easter weekend we are reminded God is still in charge.

Living Off Savings

Have you ever been laid off or your spouse loss their job? It’s often not their or your fault, but the business cycle changed or the economy in recession. Worked for one company with only one customer. When the US Navy did not need two suppliers, we were out of business. We feel bad because we did not see it coming.

Working in several industries have been through this cycle and expect to experience it again. My joke with younger workers is there are two types of aerospace employees, those who have been laid off (point to me) and those who will (point to them). Entrepreneurs may have their income go to zero with no warning.

What do you do when you have lost your job? Panic? Get Mad? Usually am in shock, and crawl in bed for a week. Had a co-worker who brought his clubs and played a round of golf every time happened to him.

There are some things you should do when jobs and income disappear:

1. Breathe. Some deep breaths will help you relax and start to think.
2. Exercise and take long walks. Humans think better when we move.
3. Start making a list of all your successes. Not in our nature to compliment ourselves, but these case studies are going to help us get to work.
4. Cut Spending Now! You need internet (unless you have a kind neighbor), and you don’t need premium cable or Netflix subscriptions. Take in a roommate or rent a room. You want to stretch unemployment and savings as far as you can.
5. What do you have you can sell? I sold a house because I could not afford the mortgage. Got an extra car? Collectables? If you have to move can you get rid of it now?
6. Take a taxi job to help you get to your next job. Work temporary, bartend, wait tables, serve coffee, clean houses, consult, drive for Uber, or do telemarketing. No this job does not belong on your resume, but doing anything will help your confidence and recovery. It extends your unemployment benefits, you with people, make a little spending money, and recover your balance.
7. Research your industry and any related industries. Who is hiring and why? What are the future trends? What new technologies are coming? Reading the last 6 months of industry magazines & newsletters will have you ahead of the hiring managers and create small talk topics to talk about in the interview.
8. Set a maximum amount of time to apply for jobs. After 6 hours would start to lose my mind.

The goal of these ideas are to lower your stress, get a little fitter, and keep your ability to network and interview. Unemployment destroys your social support and routine. Be the relaxed, confident job applicant with a tan who is ready to get back to work at the interview. You will get back to work sooner.

Don’t Say You Can Do Anything

Advise for job hunters. Don’t say you can do anything. That is not true and will delay your finding your next job.  

Most people looking for jobs find accidental jobs. Hey that store is looking for grocery clerks. You could do that.

Not every job will fit you. I have a fear of heights. There is no way I would be a great roofer for instance. Being productive requires comfort at your work.

Instead look at your experiences. What are you good at? Even better, what are you great at? Think about your successes, and all the actions you took to contribute to your team.

Then break down the different skills you have from those experiences. Your old industry may be in the dumps, but almost every business needs those same skills your old job did.

Then start searching for new careers that need your talents. Many new jobs did not exist 5 or 10 years ago. Widen the scope of your search, but stay focused for a few positions.

Your career will go further if you use your best talents.

Your Losing Streak

(Upcoming book: Adapting! Things I Learned from Unemployment)

Everyone goes through tough times. Don’t care how rich, how famous or how ordinary you are. You are not alone. Everyone has hard times.

Being unemployed is tough. You lost your routine. Lost the place you went everyday. Lost the people you saw and enjoyed everyday are gone. You no longer have enough money to go buy your wants, or even needs.  You don’t even know what to do with yourself today. What are you going to do later?

In today’s economy you can be out of work for months or years.  I know from experience.

You can feel confused, frustrated, angry, lost

… or all the above and more.

It is truly a difficult experience.

Understand you are not the first. You are not alone. Go find support. Realize people do care about you, and use their strength to keep going. Experience unlimited, church, temple, mosque and religious groups are wonderful.

Believe in yourself and set out to help someone else. This is the key to success.

Know you will eventually find work. Not always what you want, nor as much as you would like to earn.  You may have to start over, and that is not always a bad thing.

Why should you believe in yourself? Truthfully you have had more successes than you remember. Every year or two you had a success you participated in. Not by yourself, but one you participated in with a team.

Your contributions matter then, now, and in the future. We need you to succeed.

So step one is going through your work, schooling and volunteering. Find those successes. What is the definition of a success? “Anything you think that was a success.” Do not make this hard.

What purpose is this for? You are going to figure out what talents and skills you have. These transferable skills are what employers want.

You have to show your personal value proposition to employers. Same thing entrepreneurs have to do with their customers, you have to do too.

Then look at each success and break it down. What was the situation or problem? What did your team do, and what was your contribution? Write these stories down.

Then estimate, calculate or take a swag at how much $, %, # or time was earned or saved. Don’t exaggerate, but do your best. Remember dollars is the language of business.

These are the stories you are going to tell during your interviews. When they ask have you done this?  You answer. “Not exactly, but I have done something similar with your story. Practice telling these stories out loud, and the more you do it the better you become.

Get started, figure out your skills and the value you have to offer.  We want and need you to succeed. Really.