Lazy Man and Money

End of Your Rope? Tie a Knot and Hang on Tight.

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If you ever feel like you’re at the end of your rope… tie a knot baby, and hold on tight!

– Steven Tyler, Aerosmith

It seems that the quote comes originally from Roosevelt, but I remember it from an Aerosmith concert in the mid-1990s. Google didn’t exist yet, so, to me, Steven Tyler owns the quote.

Livin’ on the Edge!

Yesterday I explained how I got an e-mail from a woman who lost her job and the feelings that I went through in a similar situation. Today, I’ll detail what I did about it then and what I’d do about it today.

(* This was originally written in 2007 but, with few edits, it is still applicable today. As COVID-19 continues to make 2020 terrible, this may help you or someone you love.)

First off, I’d break your plan of attack into three phases:

Phase 1 (Immediate Term) – Desperation mode

Before you even begin this phase, I hope you have an emergency fund.

Step 1 – Cut costs

Look around at everything that costs you money. Try to either eliminate it or bring the costs to a minimum.

  • Extras – I would quit most any subscription service… Netflix, Cable TV, Vogue Magazine… all gone. (In COVID-19 world, this advice may not be the best, it gets better.)
  • Food – I’m not entirely joking, but I’d go on the Survivor diet – lots of white rice and water. Perhaps some Ramen noodles if you want to splurge. I’d mix some beans in as they are a great source of protein and fiber and are relatively cheap. Eggs can be a good cheap option as well. Chicken is extremely cheap as well. We are lucky that food costs in 2020 are low if you are flexible on nutrition for the short term.
  • Insurance – Use COBRA to get health insurance unless you have a better option such as a spouse.
  • Housing – The woman in the email had a home and mortgage payments. If you own a home, can you get a roommate? Is AirBnb an option? Is it possible to sell it and downsize or rent?

Step 2 – Earn an income

It’s impossible to make payments on your home without money coming in.

  • Look into Unemployment – This is an obvious first step, I hope. When I was jobless, my unemployment benefit was quite large as I was downsized from a high paying job. The downside of this is that it discouraged me from looking for work. With unemployment, if you make $50 that week, you report it and then you get $50 less for the week. This extends your time on unemployment though, so if you are still unemployed when your unemployment would have run out, you’ll still have that $50 to get the following week. This was poor motivation for me to take any available work, which would normally be my instinct. For example, if I took a minimum wage job, I would be working 40 hours a week for literally no money. It’s a strange system in my opinion.
  • Make Extra Money – See if there some ways you can make an buck on the side. There’s another great example at Get Rich Slowly.
  • Think about small jobs – Don’t be afraid to work double shifts at McDonald’s or some other fast food place. I used to work at a fast food place and I actually thought it was fun (in high school at least). The bonus is that if you work the night shift, you can often bring some leftover food home. It wasn’t uncommon for me to bring home 12 calzones a night that would have otherwise been thrown out. They went into the freezer and our family had food for months.

    Focus on what skills you have. Maybe you can teach a class on something better than most people. Maybe you can create logos on Fiverr. One benefit of 2020 over 2007 is that we have a robust gig economy. I make money dog sitting.

  • Talk to Friends – Tap your social network and see if you can find a job there. I once found a job for a friend through another friend… and none of it happened through a social network. It was talking to people in real life.
  • Look for Jobs Online – Look online at Monster, CareerBuilder, and Indeed. LinkedIn is an obvious way to go.
  • Blogging – Blogging for money is possible, but expect to earn somewhere around 5 to 10 cents per hour spent for the first 5 months. It took me a year of 2 hours a night (on average) to make a thousand dollars a month… but it was much, much easier in 2007. Most people spend their time on social networks, not independent blogs. Thirteen years later and it’s a struggle to grow beyond a thousand a month… and I know a lot of bloggers who would love to make a couple of hundred dollars a month.

    Nonetheless, if you are looking into blogging as a longer-term solution here are ten reasons to be a personal finance blogger. And here is a little guide to being a successful blogger. (Note: These articles are in need of updating. They are good motivation, but there is better practical advice out there.)

  • Consider selling things you have of value – This is a tough decision and must be made on an item by item basis. You may have a few hundred dollars in stuff from eBay, Craigslist, Facebook Marketplace, or a garage sale.

Step 3 – Take Care of Yourself

It’s more important now than ever. I originally meant that because losing a job or dealing with any kind of financial hardship is tough. Coronavirus turns it up a couple of notches.

  • Pay Attention to Your Health – It’s easy to get depressed when in this desperation mode.
  • Be Social – When I was laid off in 2001, I was lucky enough to live with roommates. They pushed me to be social when I worried about the expense of the restaurant meal or drinks at a bar.
  • Exercise – My apartment building also had a gym, so I scheduled a block time there every day. If you are on the cheap diet I mentioned above, you should be working out. Exercising releases endorphins which will make you feel better. Studies show exercise works as well as (or even better than) some anti-depressants.

Phase 2 – Recovery

Hopefully, you won’t be without a steady income for a long time. I had to go for two years until software engineering jobs came back. That’s a long time to try to get by on emergency fund.

If you took my advice and ended up getting two minimum wage jobs, chances are you are going to burn out before too long. It’s almost like treading water, you just want to prevent yourself from sinking. Once you’ve stopped the bleeding, it’s time to begin the recovery phase. The recovery phase is where you will need to spend any spare time looking for one job that used to pay like the one you previously had. That means making a huge effort to apply for new jobs in your industry. You may find that you need to learn new skills or require additional education. It will be hard to do this while you are working two jobs, but it’s necessary to get back to where you were.

Phase 3 – Prevention

If you’ve been able to secure a salary near what you had before the job loss, you are ready to enter the third phase – prevention.

You want to prevent this situation from happening again. You want to build back up that emergency fund. I prevented a total loss of income by building passive income streams. That way if I lose one, the others can keep me afloat. Looking back at this 13 years later, my wife and I have a very solid net worth, great retirement income, some rental properties, equities, side hustles (blogging, dog sitting). We can be financially independent in a couple of weeks by eliminating extra education costs.

Originally published May 15-16, 2007

For fun here are a couple of the outdated references I removed:

– Vonage’s cheap per minute VOIP home line instead of a traditional landline
– Advice of getting rid of your cell phone. Now just get a cheaper phone and a cheaper plan.
– Use HotJobs as a source to find new jobs

Laid Off? Some Survival Tips.

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I got a sad email from Candi yesterday (name changed to protect the innocent):

[blockquote]Help, I have been layed off and will no longer be able to keep up on the mortgages (2) or bills. Family of 5. Husband works still but I made so much money previously that our income is cut more than in half. I was told by someone that the world is going to h*ll and we need to sell everything and stock up on food and prepare to just survive. I am afraid for us.[/blockquote]

The easiest way out is to simply move to Belgium and sell your children You’ll make money while reducing your cost of living. I joke (don’t even try it’s illegal), but in times like this I try to remind myself that laughter is free.

On a serious note, I got a similar e-mail last May. It led me to write these tips. I am surprised that many of the tips still apply. That should go a long way towards righting the ship.

I did list some ways to save money, but here are some more ways to save on clothing, movies, music, television, and books, razors, hobbies, gas, housing, groceries, and almost anything on the Internet.

I’d focus on some of the big things. I don’t want to go all Suze Orman or Larry Winget on you, but the two mortgages is a problem. Are you at least renting out one of the places? Some income to offset the mortgage is better than none. Can you sell one, even if at a loss?

I don’t have a lot more information to work with here. One thought is that if you have new cars of significant value you may be able to sell them and pick up servicable cheap ones (a used Kia or something). It will get you from point A to point B and either put money in your pockets or reduce your payments. Another thought is to look at refinancing the mortgages at today’s low rates. If the homes lost a lot in value, it might not help, but it’s worth looking at.

I don’t know what Candi’s job was or what her prospects are going forward. It’s hard without knowing a profession or region. I just hope she isn’t the only lumberjack living in New York City or a similar situation where you would expect jobs to be extremely rare.

End of Your Rope? Phases 2 and 3

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Yesterday I wrote about some emergency measures you should consider if you find yourself without an income. With any luck you won’t have to live without a steady income for a long time. I really hope that you don’t have to go two years like I had to.

If you took my advice and ended up getting two minimum wage jobs, chances are you are going to burn out before too long. It’s almost like treading water, you just want to prevent yourself from sinking. Once you’ve stopped the bleeding, it’s time to be begin the recovery phase. The recovery phase is where you will need to spend any spare time looking for one job that used to pay like the one you previously had. That means making a huge effort to apply for new jobs in your industry. You may find that you need to learn new skills or require additional education. It will be hard to do this while you are working two jobs, but it’s necessary to complete this recovery process.

If you’ve been able to secure a salary near what you had before the job loss, you are ready to enter the third phase. The main idea with this phase is prevention. You want to prevent this situation from happening again. One way is to start up an emergency fund that can you get you by if this were to happen again. Another way that I’m preventing a total loss of income is by looking for and building alternative income streams. That way if I lose one, the others can keep me afloat.

I Lost My Job

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Last week, on May 8th, Lazy Man and Money turned one year old. In that time I have received nearly 1000 e-mails, but none like the one I received on that day:

Hi Lazy man, tell me how do you create a blog to get help to pay my bills. I was recently layed off work because of budget cuts with a non profit organizations that I was working for and I just purchased a home, and would like to keep it. I have been applying for job but have not be successful just yet need some help. Thanks, [Joyce, the made up name that I will call her to protect her anonymity].

I don’t possess the writing skills to explain how this impacted me emotionally. The desperation in the e-mail just oozed into all my waking thoughts. That night, I ended up getting about 4.5 hours of sleep instead of usual 6.5. I have mentioned this a couple of times in passing, but I’ve been pretty close to this situation. No, I didn’t own a home, but I was nearly at the point where my checking account was down to zero. I would have had to start withdrawing from my retirement accounts to pay the rent. It was back in the dot-com boom in 2001. I went 2 years without finding steady work as a software engineer. I had found three or four short-term contract jobs during that time – the longest being one month. I had been employed at another company for three months, before they cut their headcount from 100 people to 6 (I had made the first several cuts, but not the last one). I was not one of the 6.

Here are some thoughts I had after digging up the pain of that experience:

It’s incredible hard to have any kind of social life when your friends typically want to go out to a fancy restaurant. I remember one time getting invited to dinner amongst friends, and, in not one of my better moments, wrote a pretty scathing response, questioning why society dictates that we must go out and spend 10 times the cost for food at a restaurant (I still feel that way, but things change considerably when you have money in the budget for the experience). It was even harder trying to date.

If you don’t have an income, there’s a constant process in your head that calculating costs. With the dot com bust, everyone talked about “burn rates.” And now it wasn’t my company having a burn rate – it was me! Even today I count every cost. The skill I needed to get by back then, has become a habit that I can’t drop. Today, I often annoy myself with ultra-frugal thoughts.

Everything can easily spiral downward leading you into a deep depression. Not having an income is terribly depressing in it’s own. Not being able to do things with friends and getting angry at the situation doesn’t make things better. Whenever someone buys themselves something nice, it draws resentment from deep inside. It doesn’t get much worse than being alone and pennyless.

The story for me has a happy ending. I found a part-time job in the autumn of 2003 that paid more than many full-time jobs. In Feb. 2004, a contact from the old dot-bomb asked me if I was available to work at a new start-up. Knowing the people, I jumped on the opportunity and made more than average person, but still a disappointing salary for a software engineer. In the same month, I met a woman whom I would eventually ask to marry me. Last year, she got a big promotion to move out to Silicon Valley. As a software engineer, I saw my salary jump when we got out here as well. Now that things are moving in a much more positive direction, I’m taking action by trying to grow my alternative income sources. If put in a similar situation, I’ll be much better equiped to handle it.

So what did I learn that I can pass on to Joyce… these survival tips.