“Success consists of going from failure to failure without loss of enthusiasm” — Winston Churchill
One thing that those in employment fear allot is the prospect of job loss. Of late my company has been making allot of people redundant in an attempt to reach a breakeven in terms of costs and just last week we lost two members of the team. As my company is not very stable financially and not in profit yet, I thought it would be a timely moment to write and prepare myself in case I was ever to face unemployment, so how do you prepare for the prospect of job loss?
One way, is doing what I am doing now and trying to find other sources of income such as dividend income which I am looking at currently as well as starting my own business. The issue is that with starting your own business it takes a couple of years before a business starts to make money especially if you are going the self funded route like I am and with dividend income you need to invest a very large amount of money for the dividends become meaningful, the dividends I am getting can only be described as petty cash. Its also good to think about health insurance – and scout for the best plan for you family.
Its also advisable to have an emergency fund that is able to sustain you for a period of like 8 months – that could be about four months worth of salary if your able to like on 50% of your salary. Eight months is a good enough period to give yourself to find another job without dipping into your savings.
I want to start saving a small emergency fund next year maybe just to cover 3 months of living expenses at first because I don’t want to spend the entire year saving into this emergency fund. I will aim to live on 50% and save the remaining 50% – the concern that I have is that the money will be lying around in a bank account, easily accessible by me – will I be disciplined enough to leave it alone and not touch it?
Preparing for this scenario also helps you to prepare both emotionally and mentally because for some people a job loss can affect their emotional state which is just not reasonable because we don’t need our jobs that desperately and its important to be a little detached and not have your entire life depending on your employment status. Job loss can sometimes be a blessing, and can open the door to even greater opportunities. Its good to take the time to beef up your CV, take advantage of any training opportunities and just scout your options. Also take some professional photos to put on your linked in profile and make sure your creating the best possible impression with the professionals you meet.