Author Topic: For those not-FI, how do you prepare  (Read 688 times)

Gin1984

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For those not-FI, how do you prepare
« on: April 07, 2019, 04:49:02 PM »
For those of us at the beginning/middle of our FIRE journeys (I want to work for about 20 more years) how do you plan for job loss/recessions?  What prep have you done to deal with the downturns while still achieving your goals? 
This came about as my husband got a job out of state and the last time we moved it took me about six months to find a good job.  This will impact a lot of our goals and in response we lowered our retirement savings from 40% to 22% to have cash on hand.

Steeze

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Re: For those not-FI, how do you prepare
« Reply #1 on: April 07, 2019, 05:52:00 PM »
Some of the things we are doing include paying off the mortgage ASAP, saving in a taxable brokerage account, and keeping our overhead low. Otherwise we work hard to stay marketable and are beginning to diversify our income.

We bought a smaller cheaper place than we could have and used inheritance money to put down 50% and will end up paying the rest off soon with the remainder. The inheritance had strings attached to use for housing, so this was a no brainer for us. We chose a condo with a super low HOA, so our monthly overhead will be as low as possible.

Since we are maxing our retirement accounts we are dumping as much into a taxable account as possible. This will give us cash available when needed for emergencies such as job loss.

We also do the regular Mustachian thing of saving money on everything, so our overhead is on the lower side, around $1250/person-mo. No car, pack lunches, donít drink or smoke, have a reasonable wardrobe, cheap cellphone plans, etc. We also do not have kids (yet?), but our spending is such that we can swing it on 1 income and still max our retirement accounts.

Next is just trying to be better at our jobs. We both work long hours and spend our weeknights studying to improve our skill set. If there is extra time in the weekend DW will get a head start on the weeks task list. I also just completed my professional licensing exam (hopefully passed!), and keep a long list of happy clients with my personal contact information. These efforts help three-fold in improving our income, making us more of an asset at work, and making us more valuable in the job market if we needed to look for something new. I also see this extra effort as necessary to work for ourselves eventually.

Lastly is diversifying income. DW plays music at events and just signed her first two weekly students. I try to pick up side gigs when possible and also started to sell stuff on eBay. We are looking for other avenues such as Amazon and buying a rental to further diversify, but nothing in the pipeline yet.


Zikoris

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Re: For those not-FI, how do you prepare
« Reply #2 on: April 07, 2019, 08:09:51 PM »
We keep our expenses very low (our rent, food, and bills average $1,100/month), low enough that even a part time minimum wage job would be more than enough the cover them. So for example, if we were in the situation you described where it took six months to find a good job, we would just work at a grocery store or whatever temporarily rather than spend months unemployed hemorrhaging money, and that would not harm us financially. In a big city, pretty much any normal person (normal appearance, no serious mental/physical health issues, decent personality, open availability) can find a minimum wage job within, like, one or two days if they put effort into it. I could see doing temping as well - I've done it before when I moved to a new city and just wanted to start working the next day and not screw around.

Our investments are also fairly liquid, because we save enough money to max out our tax-advantages accounts and also put a lot into regular taxable accounts. So if something truly dire came up, we could definitely pull from that.

Goldy

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Re: For those not-FI, how do you prepare
« Reply #3 on: April 07, 2019, 08:27:57 PM »
The best thing we did was have some taxable and Roth savings that we could access if we ever needed to.  That helped us feel secure and within a few years the amounts eclipsed the mortgage which was a whole different level of feeling secure.