Doing the next recession right! Survival tips?

AT&T / Ops
DDM2K

AT&T Ops

PRE
Windstream
DDM2Kmore
Nov 9, 2017 23 Comments

I moved to the Bay Area this year from the southeast. Raleigh, NC if you want to be specific. I️ made it through 2009 unscathed and with credit score fully intact. But I’m not going to count on luck for future economic changes.

Financial professionals recommend 6-9 months of cash in an emergency fund. What would you do if you faced periods of LONG term income reduction when companies know they can low ball and get away with it?

Scenario:

Employee gets laid off after recession goes full swing

Employers offering 50-60% of what they were paying during high demand

We are facing possibly the next 4-5 years making half of what we used to. Maybe a full year of unemployment. Emergency fund recommendations won’t cover this cut for this long.

Selling investments would sound like a bad idea because stocks would likely be at a low point given the economy we’re talking about.

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TOP 23 Comments
  • Sprint / Product
    Ebuh51

    Sprint Product

    BIO
    Tech project program manager
    Ebuh51more
    I've survived two major recessions in my career. The first one back in the early 80s when interest rates for home loans went to 17-18 %, I was in construction and everyone went out of business including me. Fortunately I had a very low cost of living and an appropriate amount of savings.

    I could see the handwriting on the wall that Tech would be the future and was able to reinvent myself to fit into that future. My regret from those days is not moving to Silicon Valley.

    In the last major recession my employer had already laid off everybody at our company and I was one of the survivors.
    But there's always life after a layoff, there's always life with another company, just don't get yourself caught up where you're upside down financially in everything.
    Nov 9, 2017 1
    • Cisco possiblo
      Well said..thx for sharing
      Nov 9, 2017
  • Amazon Outside43
    Step 1) forget about your investments
    Step 2) forget about working
    Step 3) get a bunker (buy vs build discussion out of scope)
    Step 4) stockpile as much food and guns as you can
    Step 5) ....
    Step 6) PROFIT!!!!
    Nov 9, 2017 6
    • Apple / Eng
      bender-😒

      Apple Eng

      PRE
      Microsoft
      bender-😒more
      I love step 5 —> 6. It’s like saying yadda yadda yadda....and you’re rich!
      Nov 9, 2017
    • Microsoft
      yMcg47

      Microsoft

      BIO
      Amicitiae nostrae memoriam spero sempiternam fore
      yMcg47more
      ... is the most important step
      Nov 9, 2017
    • Amazon Outside43
      Someone needs to watch South Park
      Nov 9, 2017
    • Microsoft
      yMcg47

      Microsoft

      BIO
      Amicitiae nostrae memoriam spero sempiternam fore
      yMcg47more
      Who? Why?
      Nov 10, 2017
    • Amazon Outside43
      Someone.
      Nov 10, 2017
  • Amazon Knxsxfjnbk
    Don’t buy shit you can’t afford on your base salary.
    Nov 9, 2017 0
  • Microsoft OoDp66
    Ideas ...

    · Live well inside of your means in the first place
    · Bank one year of vacation time so that you get an additional payout if let go
    · Stop paying taxes during unemployment (I mean don't pay taxes on any benefits you receive, make it up when you get back to work - chances are, an unemployment stint will lower your tax bracket and yoru tax burden will wash out because of payments made while working g
    · Dont overlook welfare benefits like food stamps and health insurance for kids - you normally pay taxes to support these programs - don't hesitate to use them right away to prolong your savings
    Nov 9, 2017 2
    • Amazon / Eng
      mUqi08

      Amazon Eng

      PRE
      Amazon
      mUqi08more
      Where in the world can you bank on year of vacation time? The most I have seen is 5 weeks and the lease is unlimited but cannot cash out.
      Nov 9, 2017
    • Microsoft OoDp66
      I mean one year worth of vacation, which I assume is all your employer will allow you to roll over.

      Basically, don't take time off in your first year and carry that balance forward every year after that. You'll have somewhere between 2-6 weeks of pay, depending on your allowance, when you leave the company.
      Nov 9, 2017
  • Google lDuM55
    Prep for a recession is not a quick fix. Most people get screwed in a recession because they cannot meet their home payment. With property values skyrocketing and the average tech worker getting a 1m mortgage, they lose all contingency when the bad things happen.

    The other issue is people having major student loans. If you have massive loans, I do recommend paying off early. I do know these can be low interest, but there is no escaping these loans.
    Nov 9, 2017 2
    • Microsoft
      yMcg47

      Microsoft

      BIO
      Amicitiae nostrae memoriam spero sempiternam fore
      yMcg47more
      Why pay loan off instead of buying bonds.
      Nov 9, 2017
    • Amazon Snapcrackl
      Unless they are federal loans, and then there is possible temporary escape, like income-based repayment plans and unemployment deferment/forbearance.
      Nov 9, 2017
  • CUNA Mutual Group 106100
    Have two budgets. One for now, so you can save a significant portion of your income, and one for the worst case scenario, that will enable you to live on 50% of your income if that's what you expect. When entering into non-negotiable expenses like mortgage, car payment, phone contracts, etc, use the lean budget to decide whether you can afford them. And other than the above, stay the fuck out of debt.
    Nov 9, 2017 0
  • Amazon / Eng Custody
    Chapter 7 bankruptcy is not as big of a deal as most people think it is. It's one of the bedrocks of our economy and Incredibly useful for situations such as an economic crash. I went through chapter 7 right after the crash and literally got a credit card offer two months later. I easily was able to rebuild my credit and even bought a house within 3 years. Everyone in America likes to panic about everything but seriously their systems in place you just have to swallow your pride and use them
    Nov 9, 2017 2
    • Amazon / Eng
      mUqi08

      Amazon Eng

      PRE
      Amazon
      mUqi08more
      You lose a lot of equity, other than your home and your car every thing is fair game.
      Nov 9, 2017
    • Amazon / Eng Sketches
      Not really. If you do it right you don't really lose anything. Asset star balanced against debts. You get to keep a lot more than you think you do and if you're smart about it it's not really much of a big deal.
      Nov 9, 2017
  • Snapchat / Eng Yongson
    Is the 50-60% rule true for FANG tho?
    Nov 9, 2017 2
    • AT&T / Ops
      DDM2K

      AT&T Ops

      PRE
      Windstream
      DDM2Kmore
      OP
      I️ truly don’t know. That’s why I’m asking. I️ could be thinking inside a very small box.
      Nov 9, 2017
    • Google lDuM55
      The early 2000s had a huge collapse. There was such demand for workers during the dotcom, large companies were desperate. In the late 2000s, same issue with Banking. Many people earning 100k then still are not at that level.

      There is zero reason to think tech would be different. Right now, we have a tight labor supply and growing companies. What if that changes? There could be low demand and a glut of workers, especially those in low cost of living areas pricing out the Bay Area
      Nov 9, 2017