♪ Bless him in the mornings ♪ ♪ Come back Sunday morning ♪ California's top casino and entertainment destination is now your California to Vegas connection. Play at Yamava Resort and Casino at San Manuel to earn points, rewards, and complimentary experiences for the iconic Palms Casino Resort in Las Vegas.

♪ Got to sort of tell 'em ♪ Two destinations, one loyalty card. Visit yamava.com/palms to discover more. - Yesterday I shared with you the fact that recession is coming in the future, and one of the most important things you can do is to plan not to lose your job.

But obviously, even though you might plan not to lose your job and do all those things yesterday, there are going to be certain things that are outside of your control. So today, I want to talk to you about how to make a plan of what you will do if you lose your job.

(upbeat music) Welcome to the Radical Personal Finance Podcast. My name is Joshua Sheets. This is episode 193, part two of our three-part series here on what to do if you lose your job. Today I'm going to help you think it through, and there are a bunch of reasons for this.

Most importantly, by having thought it through, you'll probably react a little bit better and respond a little bit better if it happens to you. But more importantly, there's some stuff you've got to be doing now so that you're better off if you lose your job. (upbeat music) Whether or not you actually implement some of the things that I talk to you about in today's show, that's up to you, and I hope you do.

But I know that many of you won't, simply because that's the fact, that many times many of us listen to ideas that are good and we don't actually implement them. Even if you don't do anything with the content of today's show, I think you're still going to be better off, and that's why I'm going ahead and doing it for you.

My hope is that you'll do something with it. If you don't do anything, obviously, you will probably just grab a few things and start implementing just a few things, and hopefully that will help you to fare a little bit better. See, a lot of this type of planning is defensive risk management planning.

It's insurance planning. But it's not about buying an insurance policy. It's about the things that you can do to prepare yourself for when everything goes wrong. Things go wrong in everybody's life. But depending on our level of preparation for those things, the impact is different. And my hope is that some of these ideas that I have to share with you today will help you to make a plan and put that plan in place so that if you lose your job, whether that's because you get fired at a one-off scenario due to a mistake that you made, an honest mistake it could be, or something else, or whether you get laid off, or you get fired, or something else, or whether you get laid off in a round of layoffs in a coming recession, something like that, or your business that you're working for just simply goes belly up, my hope is that these ideas will help you to have a plan in place.

It's impossible to guarantee not losing your job. I've been laid off. I realized today when I was preparing some of my notes here that I've actually been laid off twice. That's a decision which we'll come to in the course of today's show. There are many factors beyond your control and it's important to have a plan.

Now, as I emphasized yesterday, I believe the best plan is to simply be in front of the trends. And the farther you can think ahead in life, in every area of life, the better. So, for example, let's say that you are going to plan to be able to protect yourself and protect your family if you get attacked by a violent thief.

And in order to do that, you have put in place a variety of preparation measures. First, you have gone ahead and studied some basic martial arts, so you have some basic hand-to-hand self-defense tools. You carry a knife on your person, so you have a basic bit of defensive equipment.

You carry a concealed firearm. You carry some pepper spray. And you're well prepared in case something happens. I think all of those things would be good things for you to do. But make sure to start with the fact of this advice. Don't go to stupid places with stupid people and do stupid things.

If you follow that advice, you can avoid a lot of the situations in which you ever need any of those things. The vast majority of us, thankfully, will never be in a violent confrontation in our life. But you can help improve your odds by not going to stupid places with stupid people and doing stupid things.

I can't remember who that was, but I heard say that one time. It was a firearms instructor who gave that, and I said, "That is the best way to describe it ever." So that was what yesterday was about, is let's get out in front of the trends. I can't predict the day-to-day vagaries of the stock market, but I do have inside knowledge on my own industry, and I might have some inside knowledge on my own company.

And so I can see what's coming to a certain extent, and I can change my course. And that's where we start with regard to preparation, is change your course ahead of time so you don't get caught unaware and get laid off. But now today, we recognize the fact that things can happen, and even though you might be doing something intelligent with upstanding people in a safe location, bad things happen.

And so being prepared with a defensive plan is important, and today is that defensive plan. By thinking through your defensive plan, you'll be able to avoid a lot of the emotion that other people are going to face. If you study people who are often forced to respond to stressful situations, think of law enforcement officers, think of first responders who are responding to an accident, think of military people who are going into a firefight.

What do they do in advance of those situations to prepare? Well, many things, but specifically today, they will think through, "What am I going to do in that situation?" And they'll practice it, and they'll rehearse it. The more intense and the more stressful the situation is likely to be, the more the person going into it is going to have practiced it again and again and again and again.

That way, when they're in the middle of the difficult situation, there's a higher probability that they're not going to be shell-shocked, that they're not going to be caught and stupefied by the adrenaline and by the shock of the situation. They're much more likely to be able to continue to function.

It's not guaranteed, but it's a much higher likelihood. And there are various ways to do that. You can do it with an all-out practice and a rehearsal. That's what people in those difficult and stressful environments will do, is they'll rehearse again and again, physically rehearse. But you can also do it just mentally.

You can just think through some things. At least having thought through something will make it much more likely that everything's going to be fine and you'll come out the other side. Chances are, if you've practiced in advance, even something simple, like for me, one of the things I've tried to pay attention to is, if I'm going to be in a stressful situation, I think of car accidents, I think of any kind of difficult medical situation, breathe, breathe, relax, breathe, slow down, think, relax.

And I found myself when I've been in some situations like that, unexpectedly had a couple car accidents and all of a sudden, my mind was kicked in, just telling myself, breathe, relax, breathe, relax. Now, of course, I'm nothing special, but just thinking of it in advance is my point.

It'll help you to it. And being laid off or being fired is a tough situation. I remember very keenly what it was like to be laid off. It was emotionally devastating. It's tough because it attacks your self-confidence. No matter how much you can justify it, you still have a tendency to feel worthless, to feel like you're not valuable, because obviously, if you were valuable, they would have kept you around.

The truth is, people get laid off all the time for all kinds of reasons. So, let's think it through and consider what you would do. Just by talking it through and planning a little bit, I believe that this will help you in the future so that even though you may still experience those feelings, the stress of those feelings and the negative impact of those feelings, my hope is that that'll be a little bit reduced for you.

Emotionally, getting laid off and having to change your lifestyle because of it is extremely difficult for many people. I think of a specific person that I had occasion to interact with. This person had spent years as a salesperson and had a very established career as a salesperson in a very large national company.

He was here in Florida. This person had a great job. They'd been there forever. They were well-ranked. I still don't know why they were laid off, but they were laid off. I never could figure it out. The challenge was that they were in the expensive phase of life. They'd moved into the comfortable upper middle class lifestyle house, quite fancy.

Not super fancy, not ostentatious, but very comfortable with a very comfortable mortgage payment. The kids were in private schools. They were enjoying the normal status symbols of life. They were not foolish. They were normal. They were prudent. Didn't have an unreasonable debt load. It wasn't like they had hundreds of thousands of dollars of credit card debt.

But they were laid off. Because they had spent so much time at that company, basically all of their identity was wrapped up in that company. Because they were so active in the community, they were known as being identified with that company. So then, what do you do? Well, I watched them go for a long time and not make quick decisions because they couldn't face the difficulty of the humiliation of making quick decisions.

The thought of pulling the kids out of private school was a devastating thought because of the impact on the kids. Ultimately, they had to do that, but they waited too long. Selling the fancy house was a devastating thought because it was an admission of, in their mind, going back from the higher lifestyle that they had achieved to that lower lifestyle.

And that was humiliating. But they had to sell the house. Unfortunately, though, they'd moved so slowly because of lack of prior planning that it really, really was difficult to recover. The story impacted me hugely because to see a grown person so devastated from a simple job loss to me was pretty shocking.

I couldn't do in that circumstance, I couldn't do very much to help. They were working to find another sales job, but their confidence was shot. And it's tough to find a good sales job, and it's tough to get started in sales when your confidence is shot. So, I've thought about it a lot since that meeting.

I think about it constantly for me, and I plan. And I think, and I run the scenarios, I run the war game. I say, "Okay, if I lost everything, what would I do?" Well, that keeps me from taking out debt on cars because then I wouldn't be in a situation like they were in to have to sell the car all of a sudden.

I keep monthly expenses low, not just for this, but this was a situation that influenced me. Keep monthly expenses low so that I can quickly pivot and take any kind of job that comes along to keep my mortgage and keep my family in our house. I look at things, every aspect of our spending, and I think about, "Okay, if I had to cut this, how would I do it?" I look at our food budget and I say, "Okay, if I needed to cut from $500 a month to $200 a month, how would I do it?" Okay, I'd stop eating meat, and I'd move to beans and eggs for protein.

We'd eat fewer fresh vegetables, and we'd eat more canned ones from the pantry. We'd eat more rice and more pasta and more bread than we eat right now, and no, that wouldn't be good for the long term, but it would certainly be fine for the short term. We'd buy some multivitamins to help replace some of the lost nutrients and try to make up for it that way.

Okay, well, let's say if I really had to cut to the bone, then I'd cancel the internet and I'd go work from the library. We would not spend any money on entertainment. We'd get it all for free online from the library. We'd get DVDs from the library or whatever we needed to do.

We'd read for free from the library. We'd go on walks instead of things that cost money. I haven't been in the situation of having a 13-year-old in private school and having to tell him or her, "Okay, I've got to pull you out," but I've thought about, "Okay, what would I do?" I'd try to position it as an adventure, not a sacrifice.

Although they would need to know why we were doing it, how could I moderate that? And the reality is in the modern day, it's pretty easy to live a pretty incredible lifestyle for not much money at all. But we're primarily trapped in our heads into our normal. So, in my mind, thinking it through in advance allows you to escape the trap before it happens.

You'll probably be blindsided. It'll probably upset you, but hopefully it'll only last for a couple of days. The emotional upset, if you get laid off, will hopefully only last for a couple of days instead of for weeks or months because months are devastating. So yesterday I led with the overall kind of motivational type stuff.

Today I want to flip it and start with some of the tactical financial things first, and then we'll go back and work on the career-related items. The tactical financial things that you need to think through primarily focus on two different areas. Number one, what would be the effect in your household of losing the direct income from your job, losing your paycheck, the actual money that gets direct deposited into your checking account?

And then what would be the effect of losing some of the indirect benefits, losing your insurance benefits, retirement benefits, or any other miscellaneous benefits associated with your job? They both matter, but usually it's the income and paycheck that has the most immediate effect. So let's start there. What would you do if suddenly I took away your paycheck?

I cancelled your income. No severance, no anything, just today. Gone. How wealthy are you? In this context, I particularly like Buckminster Fuller's definition of wealth. His definition of wealth was how many months can you live your current lifestyle if you lost your job? That's how wealthy you are. If you could live for five months, then you're five months wealthy.

If you could live for a year, then you're one year wealthy. It's kind of a nice definition of wealth. I like it. Especially in this context. So think about that. How wealthy are you? If you were to compare your assets, your savings and your investments to your monthly expenses, how many months could you live?

Now, some of you, I don't know if it's most or if it's some. I know this audience probably has a much higher level of wealth than the general population, but some of you could live for the rest of your lives. That's awesome. Many of you could live for many months and many years without even noticing the direct loss of income.

But across the nation, I'm sure there are some of you listening who could maybe get through a few months. Because as US Americans, and I'm sure it's similar in other western countries that are listening, we don't have much in terms of savings. Many US Americans are a paycheck or two away from bankruptcy or at least insolvency.

So think about that. Start putting things in place now to protect yourself. The first thing you can do is protect yourself by not having a high consumption, highly leveraged lifestyle. If you have low fixed expenses, then you have flexibility. Now, obviously this would have to be adjusted for your situation in terms of scale.

If you're making, say, $10 an hour and you have only a few hundred dollars set aside in savings, then you could be wiped out by something as simple as a $199 a month car payment if you were to lose your job. It's happened to many people. On the other hand, if you're accustomed to making say, half a million dollars a year and you have a few hundred thousand dollars in cash that's just sitting there in liquid accounts, then having a $2,000 a month boat payment is probably not going to wipe you out.

But on the other hand, if you are highly leveraged and have a lot of monthly payments, no matter how incredible your income is, you still could be wiped out. I'll give you some fun homework here to think about. Go if you have a Netflix subscription, or I don't know if it's on Amazon Prime or wherever you consume your online media, go and watch a movie, a documentary called The Queen of Versailles.

My wife and I watched it on Netflix some months ago and it was fascinating. Absolutely fascinating. It tells the story of a couple named Jackie and David Siegel. They are the owners of Westgate Resorts, one of the largest timeshare companies in the nation. In 2008, the real challenge was in 2008 they basically went successively through a process of losing all of their wealth.

I don't know what the level of his net worth was before the financial crisis. Some hundreds of millions, I don't know if it was a billion dollars, but he and his wife were in the process of building a house they called Versailles. It was a 90,000, it is a 90,000 square foot house in Florida, New Orlando.

One of the biggest houses in the United States. It has 11 kitchens and 13 bedrooms and 30 bathrooms and a 20 car garage and a two lane bowling alley and an indoor roller skating rink and three indoor pools and two outdoor pools and a video arcade and a ballroom with a 500 person capacity, a two story movie theater with a balcony inspired by the Paris Opera House, a fitness center with a 10,000 square foot spa, yoga studios, 20,000 bottle wine cellar, exotic fish aquarium, two tennis courts, a baseball diamond and a formal outdoor garden and an elevator in the master bedroom closet.

So, it's a big house and massively expensive. Well, his the value of his real estate started to change substantially in 2008 and the his financing dried up and basically everything turned and it's the most dramatic scene. Even though the house Versailles was not finished at the time, the house they were living in was certainly quite opulent and quite large and in the most absurd scene, here comes this man, David, comes home and starts yelling at his family for leaving the lights on in a house that, I don't know, has four or five air conditioners and he's coming in and he's mad that somebody left the front door open and that somebody is leaving the lights on and it's almost just this crazy perspective when you look and say, "Are you kidding me?" That you're dealing with this kind of scale and it's stressing you out that the lights are on?

Well, it was just a reflection of the stress that he was facing, trying to figure out how to renegotiate a billion dollars of debt and trying to go all over the world and find somebody who could lend him money. But the point is you've still got to make sure that your fixed expenses are low, especially as regards your level of income.

And one of the important things to consider as far as the flip side of scale is that in many ways, if you are accustomed to a high lifestyle, it would behoove you to be even more conservative than those who are just scraping by because if you need a $10 an hour job to pay your bills, you can have one at the end of the day, anytime you want one.

But if you need a half a million dollar a year job to pay your bills, that might take a little bit more time to find. It usually does. If you're at the lower end of the pay scale, it's not that tough to get a new job. If you're at the higher end, it's a bit tougher.

If you're at the lower end of the pay scale, anytime you want, you can go out and make money as a day laborer. I used to hire guys in a previous job. I used to hire guys here in West Palm Beach when I needed some day labor and would go up and there was, you know, there's the places in every city where usually it's primarily Spanish immigrant workers primarily who would come there and they'd hang out together and you'd come by and I'd come by in my pickup truck and try to deal with them.

The amazing thing though, I loved doing it because it was kind of the microcosm of the labor market in general, was they wouldn't work for less than $10 an hour at a minimum and the better workers would always get more. It's one of the reasons why I always get a little bit annoyed by the minimum wage debate because the market demand sets the rates.

It doesn't matter what the minimum wage happens to be. Just go, if you want to see the labor market in a microcosm, go hire some day laborers and you'll see the market forces at work. You pull up and you tell the guys the kind of work that you need and they'll bid against one another depending on who needs the work and most of the time they'll have a similar price, again $10 to $12 an hour depending on labor seems to be normal, at least it was a few years ago.

But then sometimes one guy will come forward and work for less and that's the labor market in a microcosm. Employees competing against employees and employers competing against employers and depending on the supply and depending on the demand, rates go up and rates go down. If you get there late in the morning and there are still a lot of guys there, the rates go down because if they don't get picked up in the morning in the day labor market then they might not be able to work that day.

But rates are high when there's a lot of demand and not much supply. So, little side trip there but make sure you recognize that. If you need a half a million dollar a year job to maintain your lifestyle consider being conservative because you don't get those tomorrow when you need $10 like you can when you need $10 an hour.

Having a low fixed expense lifestyle can be a huge help to you if you lose your job. Again, if you have no debt it doesn't matter practically how big your house is, if you don't have a mortgage on it you can go take a job at the closest retail shop and you'll still be able to eat and maybe pay the property taxes.

Having low expenses always buys you flexibility. Next, make sure that you have easily available cash reserves and frankly the more the better. Up to a point of course. Sometime in the next few weeks I'll do a show called "How Big Should My Emergency Fund Be?" in which I'll give you the CFP board formulas which those of you who are financial planning students will need to pass the CFP exam.

I'll give you the formulas and the formal technical ways, but in general the more the better, up to a point. If you look at your situation and think about it, the answer might be intuitive for you. How many months can you live without income if you lose your job?

How stable or unstable is your job or your living situation? Do you have multiple sources of income in your house or just one? If you have just one, you're working and let's say you have a stay-at-home spouse, then you need a bigger emergency fund than if both of you are working and have streams of income.

Or you need a bigger emergency fund than if one of you is earning income and you have a side business. If you have lower fixed needs, then you can have a smaller account. Higher, you need more. If you're accustomed to having a fluctuating income or if you think that might happen, then you should have a higher amount of savings.

I've been accustomed to working on 100% straight commission, which means I need more cash available to me to get me through the tough times than somebody who's working on a regular weekly salary paycheck. I personally get very concerned and a bit sad when I see people who work in seasonal, volatile industries who take on high monthly payments and operate without large cash reserves.

I think the mortgage industry is a good example. In the past, in 2008, I was a financial advisor and – or 2009, basically – and I remember meeting with a lot of people in the mortgage business and just watching them as their industry was imploding. They had levered their lifestyle up with all kinds of fancy stuff and all kinds of fancy payments associated.

Then, one by one, they lost everything. So, don't do it. Life goes in seasons. Sometimes you plant and sometimes you harvest, but you need to pay attention to what season you're in. You need to recognize that the season is going to change. I wish more of us were farmers or at least had some closer connection to the natural cycle of seasons because farmers have to think in terms of an annual cycle and the money comes at the end of the season.

The money comes when you sell your crops in the fall and yet there are going to be other parts of the season. Don't spend all the money in winter when you need it to buy your seed in the spring just because the money is flowing in in the fall doesn't mean you go and spend it all in the fall.

It's got to get you through the year. Practically speaking, try to keep lines of financing and lines of credit open and available to you in advance in case you ever need them. You need to establish the home equity line of credit on the house before you get laid off.

That way it's there and it's available to you if you need it. You don't have to answer the income questions at that point in time. You've already established it. Keep the credit card lines of credit available to you before you get laid off so that they're there if or when you ever need them.

Now obviously you need to consider carefully if you can trust yourself. If you have a problem with compulsive spending, it'll probably save you money to not have the credit cards even available to you. But if you are a normal, disciplined person, it might be helpful to you to have those things available because when you need the money, that's not the time to go out and try to get the credit.

Have the lines of credit established to you before you ever -- and available to you before you ever need it. Consider not only working in the system of cash and cash reserves, but also stockpiling some of the basic needs of life, whatever's appropriate to you. But especially if you're at the lower end of the income scale on the wealth scale, this will make a much bigger difference in your life than many other things.

In my family, we try to buy in bulk whenever it makes sense. So if there's a sale at the grocery store on something that will last, that my family uses, I'll buy the entire shelf out. I remember coming home one time with something like 30 or 40 jars of peanut butter.

We eat a lot of peanut butter and I just bought the shelf out. Or simple things -- we don't have as much freezer space as we probably should -- but simple things like stocking up on Thanksgiving turkeys. When turkey's two bucks a pound and you can buy six of them and have one every other month, that's a lot better than buying chicken at $5.50 a pound.

So stock up. Now the cool thing is, that will help you in times of fluctuating income. Consider doing simple things like having some reserves of food. For us, we need it for hurricane season. For some of you, it may be the prospect of facing winter blizzards. But it works both ways.

Because if you buy more food when it's cheap and on sale, you'll save money as you normally use it. But you'll also have food in your pantry if you're laid off. And so if you have three months of food worth in your pantry, then that's three months of cash that you wouldn't have to spend on food, and you could use the cash to keep your electric bill paid.

Or, if you have three months of food in your pantry and, let's say you normally spend $500 a month on food, then you can stretch the $1,500 emergency fund into six months of food by simply buying less. You buy half of what you normally would buy at the store, and you supplement the other half out of your pantry.

And obviously, if the currency were stable and you just had all the money, then the major savings is the fact that you're getting things at a discount. But that's compelling over time. And it can make a big difference when you need it. I remember reading a story, and I'll post a link to it in the show notes, but I remember years ago reading this story on the Prudent Homemaker blog, and this lady shared her family's experience with their food storage program.

They were a Mormon family, and in the Mormon church, they recommend to people that they have a year's worth of food on hand as a prudent item of preparedness. And this lady told the story, her husband was a real estate agent in Las Vegas. And all of a sudden, the bottom fell out of the Las Vegas real estate market, and he didn't have a sale or work for a year.

And it's pretty remarkable because she tells the story of how essentially the fact that they had food stored got them through that year. Pretty remarkable. It's definitely worth reading. I'll link it in the show notes. These are some skills that have atrophied in our culture. My father grew up on a ranch in Colorado, and his parents, they shopped once a year.

In the fall before winter, that was when they went to town. This wasn't Little Home on the Prairie. They had a car, they could drive to town, but it was too expensive for them to drive to town all the time, so they would shop basically once a year. After they sold the cattle, then they would take the money and they would buy the supplies they needed.

But those skills are largely atrophied in many of us. I guess I'm probably more sensitive to these things than many people. I've personally been so broke that I was putting gas in the tank $5 at a time to make one trip. I remember that vividly. And so some of the things of life that I really appreciate, I'm often thankful when I can simply pull into a gas station and swipe the card and not pay any attention to the numbers on the screen.

That's a luxury. I'm close enough to being that broke that for me, I still appreciate that. I hope I never lose that appreciation because there are billions of people in the world who don't have that luxury that so many of us have. I've traveled a bit in countries where dads and moms regularly can't feed their kids.

Consider that. I don't want that to happen to my family and it's my responsibility to do everything I can to make sure that it doesn't. And also to help make sure it doesn't happen to others. Most of us are pretty insulated from that level of poverty in the United States.

We live in time of mass prosperity as a society and mass availability of the simple things of life. But individually it could happen to any one of us. It happened to many families in the recessions of 2008 and 2009. And another one will come. So put the plans in place so that it doesn't happen to you.

Now adjust these things to your scale. Whatever is appropriate in your lifestyle. When you combine cash savings and material savings of the things that you need in your life with having low fixed costs and if possible no debt, then you can weather the storm of a layoff or a recession much better.

So for some people this starts with food in the pantry. For others maybe it means having a cheap camper as a backup plan. For others maybe you have a paid off vacation home or say backup property to retreat to if your local economy falls apart and your personal house goes into foreclosure.

But think defensively and then put things into place. Think about what would you do if I took away your income? Start with taking it away for a month, take it away for three months, take it away for six months, take it away for a year and work through those mental exercises.

Take it away for two years. Work through those exercises. See what you would do. That was some thoughts regarding income. What about benefits? Quickly here, there are some things here you'll want to do and some things that you'll not need to do but just mention a few things. Go through your group benefits or think through them and see what you would lose if you lost your job.

Would you lose your health insurance? If you did, what would you do? Now this one's a lot easier now after the Affordable Care Act than it used to be because now we can basically ignore the concept of pre-existing conditions for years. We had to carefully plan around that and make sure that you could afford the COBRA coverage.

Even still, even though we can ignore the pre-existing conditions, that doesn't help if you have a medical condition and you can't afford the premiums for the COBRA coverage. You need to recognize what those costs would be and account for them in your emergency savings. Many times people will say, "I've got a three-month emergency fund," but they haven't accounted for that, the cost of health insurance.

For most people, the cost of basic individual health insurance has substantially increased in the last few years. That can be a real challenge to work into your budget. So don't worry too much about the details here. Just recognize that you are going to need to come up with some cash to pick up some health insurance premiums.

What about life insurance? That one's more problematic because you might be forced out of your group life insurance and not be able to get any more. So if you're depending on your group life insurance plan for your family's needs, and if you're healthy enough to get an individual policy, do that now.

Follow through now and shop and see if you can get one. If you're not healthy enough, at least take a look at what the terms are for that group life insurance plan and know in advance what would happen if you got laid off. Sometimes they are most of the time they are convertible from a term life insurance policy to a whole life insurance policy, but most of the time you won't be able to afford that massive increase in premiums.

Sometimes you can continue them as term insurance coverage, you just need to review the terms of your policies. Would you lose your disability income insurance? That one's trickier because there are pros and cons to both sides of owning disability insurance through your job versus other places, so we'll cover that in detail when we do disability insurance in the future, but at least understand what your coverage transfer options are.

It's really not that tough. Get a copy of your group benefits program and read it. Call up your HR coordinator and ask them. Find out or think through what would happen to your pension accounts. For most people now who are covered by some system of a 401(k), it's pretty simple.

They're pretty simple to transfer. If you have a defined benefit pension, those are less simple. There's not a lot that you can do here to change it, but at least have a general idea of what would happen. One of the things that I forgot about when I was laid off back in 2008 was that I wasn't fully vested in my 401(k)s employer contributions, so I forfeited the employer contributions because I wasn't fully vested.

Now, there wasn't a lot I could do about that, but it did impact my financial life. Give these things some thought, and if you see any holes or any problems in your plan, then start affecting them and start plugging the holes. Now, overall, the major thing to focus on, and here's where we get out of the specific weeds of finance, the major things to focus on is the plan of getting your next job as quickly as possible.

There are a few things that you can be doing to prepare for that. Now, many of these things are things you should be doing anyway so that you don't get laid off. That's the beauty about this way of thinking, like I emphasized yesterday. All of those things that I mentioned in yesterday's show will help you to keep from getting laid off, but they'll also make you more employable and improve your chances of getting another job.

Have you ever noticed how the people for whom things go well, it seems like things always go well and they always get more and more opportunities? And then some people it seems like nothing seems to go well, nothing seems to go well, nothing seems to go well, and it just gets worse and worse?

Now, there may be many reasons for that. Some of those things are within their control, and some of those things are outside of their control. But, you can tilt the odds in your favor with good, proper, prior planning. And, this type of approach will help you from getting laid off, because you should be looking for your next job or next opportunity regardless.

Not necessarily actively all the time out beating the streets and applying for jobs, but keeping your ears open. One of the key things you can do is keep yourself light and flexible financially. Simple example, one of the benefits to renting is you can move across the country or across the world on relatively short notice.

One of the biggest challenges of 2008 and 2009, which were the most recent recessions that are fresh in our memory, was not necessarily that there were no jobs, but that the jobs were in a place that was different than many of the workers. But, many of the workers were stuck in the old place without the job, because they couldn't sell their house.

And, as each phase of the financial crisis continued on, each prior phase just exacerbated the problem for the next phase. And so, more and more people are upside down on their properties, their property values are falling, they're losing their jobs, more and more supplies coming on the market, prices are being pressed down, and now fewer people can afford to move because they can't get out of their house.

Finally, they say, "I've got to move." They get out of their house, it goes into foreclosure, the bank takes out the property, it depresses the price still further, and it's just this never-ending cycle, is what it felt like. Simple example, if you're light and flexible financially, if you're renting, you can just move across the country or world.

You put in your notice if you need to. Most people, if you're on a lease, you're rarely ever more than 12 months away from the end of a lease, and probably you would have some indication right before you signed your 12-month lease, so you're probably six months or so away.

And, if you need to break the lease, the penalties are usually less severe than trying to sell your house when it's underwater. So, even the financial things and the financial decisions can tie into getting that next job as quickly as possible. Do a good job right where you are today, and if you do that consistently over time, then you'll always be able to go back to a previous job if you need one.

Oftentimes, the best people to hire you, if or when you need it in a hurry, are going to be previous employers who were happy with your work. I proved this myself when I was in high school or college, but at one point, I got laid off from a print shop.

I had agreed to start working with a print shop, and it was a bad deal. We had bad communication when coming in, and I was coming in under the understanding that I was coming in as basically a small time business consultant, and my employer thought I was coming in as a front desk worker.

Now, I don't know how we got such bad communication. It should have been obvious, but it was pretty obvious within a couple of weeks that it wasn't a great fit, and so a few weeks into it, all of a sudden, we realized this isn't working, and both of us mutually agreed to call it off.

So, as I left that job, I needed a job, and as I left that job, I called a previous employer and actually drove from getting laid off to the other employer, and they hired me on the spot for the rest of the summer. Another time, when I got back from studying abroad, I needed work.

I had decided to drop out of college at that time, and I needed work, and I called a former employer, and I said, "I need work," and he said, "Well, give me a couple days." A couple days later, he said, "I've got a project. Here's the project. Here's what I can offer you," and it worked out, and especially in the younger years, encourage your children to just do a good job because those times, I really needed those jobs.

That wasn't $200,000 a year for a finance professional job. That's different, but still, when you need a job, you need a job, and it makes a big difference. In my mind, one of the biggest things that can be helpful as you make plans of what you would do in case you get laid off is to see yourself now as a business owner because, practically speaking, you are a business owner.

You are the president of your own personal services corporation. At the moment, you just simply happen to have one customer who is your best customer, and that customer is your current employer. But like every business owner, you're always looking for more customers and better customers. So, you're looking to serve your current customer better, which is what we talked about yesterday, and you're keeping your eyes and ears open for how you can attract to yourself more and better customers.

And when you find a better customer than your current customer, you're going to transition over to them. That's called switching jobs. So, there are a lot of simple things that you can do if you put that mindset on. If you see yourself as a business owner, you start by just simply paying attention to what the overall goals are of your personal services corporation.

Why does your business exist? Well, it exists to fund the lifestyle of the owner, right? And to fulfill the goals of the owner. So, this connects directly back to what we always talk about is jobs and work and businesses are a way of funding our ideal lifestyle. So, that's why your business exists.

So, you should be constantly thinking about what those goals are and how to most effectively reach them. You want to keep a list of other potential customers that you might be interested in serving. If you have a list of other customers, other potential employers or other areas of the market, other industries you're interested in, then if you get laid off, you can go to that list and quickly move into another business sector.

So, very practically, keep a list of jobs or businesses that you're interested in. I've told this before on the show, but I went and looked it up and this was something that I've done over time and it helped me immeasurably when I was laid off in 2008. I had maintained a list of jobs and businesses that seemed fun to me.

Anything that just struck me as, "Wow, that would be fun." Now, I think when I've told this story on the show before, I've said that there were 150 things on that list. I thought there were, but just for fun as I was preparing this outline for today's show, I went and looked at the spreadsheet.

On that time, I was keeping it in a simple Google spreadsheet, so everything that you do on the internet lasts forever. I was able to find it and that was convenient for me as a way to record it. Since then, I do a lot of stuff just in notebooks.

One of the things I looked when I looked at the spreadsheet, I realized I hadn't touched it since 2008, since I was laid off. So, I stopped filling this one in, even though I have other lists. So, I went and found it and I had to laugh when I read it.

I went and got my wife and I said, "Look, you've got to see this." I explained to her the history of this spreadsheet and she laughed as well. So, listen to some of these ideas and I'm just sharing this as a simple encouragement, not to be too focused on me, but just listen to some of these ideas.

They're very, very informal. It's just me jotting down ideas that stand out to me, but listen to the themes here. The reason I laughed is because I see all of these themes still in my life, seven years later, of each of the transitions that I've personally made. Here are just a few.

I'd like to market a study abroad program. I'd like to be a freelance copywriter. I'd like to be a financial consultant or advisor. I'd like to be a motivational speaker. I could be an organization or decluttering consultant. The business could be called Simple. I'd be your simple Sherpa, your guide to a simple life.

Clean and refresh. I could help people make a clean sweep journal. That was one of the ideas that I had in the past. I could create and sell an "I wish I had known" e-book. Sell it on the internet. For example, I wish I'd known how to live in my car.

I could start a roof cleaning business. I'd be passionate about working for Metro PCS. That was my idea back then. I could own or work in a cigar shop or be a cigar writer. I could work for Early to Rise in Boca Raton. That was a financial newsletter I used to read every day, and their offices were near me.

I could write a financial course for college students. Making speeches is what I'd do. I could travel the world as an international trainer and speaker. I could create a magazine for adventure motorcycle travel. I could work as an account representative at a local staffing company, the one that was at my company at that time.

That would allow me to speak to people. I could work as a local trainer for a local consulting business. I could teach in a high school. Develop and run a property management company. I could create positive motivational helmet stickers for motorcyclists. I don't know if any of you pay attention.

You see these guys, the Harley riders usually, and they got the black motorcycle helmet, and they're just these most cynical, disgusting stickers usually. I thought, "I wonder if there's a market for positive, motivational, uplifting ones." I could read and create audio books in English and Spanish. I could do sales for a local motivational speaker or company.

I could be a commercial real estate developer. I could start dumpsterlist.com. Everyone's trash is someone else's treasure. I could be an Allstate agent or other kind of insurance agent. I could sell financial products. I had some listed here of how I came across a financial company. I could be a recruiter.

I knew a recruiter, and I decided I'd talk to them. I could do sales for a car dealership, any kind of sales job. I could sell clothes for big men. I could become an expert on human body language or face language. How about an information publishing idea? I could publish informational products in the art of mind reading.

I could write a bestselling book. Be a coach, a personal coach, a life coach, a money coach. I could be an interior decorator. I could start a website dedicated to high mileage cars. I could start the success channel for satellite radio. I could write an e-book called "Teach Your Child to Be Rich." I could be a sports announcer.

That's just some of the 70 things. The reason I do that, I hope it's not too personal. It is a little bit personal. Those are just my silly ideas. One of the things that I laugh at is I see every one of those themes reflected in Radical Personal Finance.

The MetroPCS thing was at that time, MetroPCS was the only company that offered just a flat rate service for cell phones with unlimited access. I hated the AT&Ts and the T-Mobiles that were popular back then. I was like, "No, I could go and do sales for them because that's a model that I like." What do you see in Radical Personal Finance?

You see a show on how to live a good deal on your cell phone plans or how to live in your car. Even at that time, I was interested in all these weird things that most people aren't. Or organizational decluttering consultants, so I bring on minimalists onto the show.

Working and starting and running study abroad programs, that's why I bring on so many people with international travel and extol the virtues of that. That's personal to me, but if you have a similar list, then what it allows you to look at, and at that time, this was the list that I worked from and wound up becoming a financial advisor because I'd known a few people.

The Allstate thing, for example, I had a friend of mine who was an upper-level Allstate rep, and I was like, "That seems pretty cool." Ultimately, that wasn't a good fit, but I see the themes now. Just simply by writing down any time you have an idea of "There's a job I'd like to have.

There's a business I'd like to do," then you'll create listings and you'll have a place to start from because in tomorrow's show, I'm going to go through, "Okay, you got laid off. What do you want?" One of the key points of that show is knowing what you want. It's impossible to find a job if you don't know what you want, but it's hard to do when you're under pressure and you've got to feed your family.

Now is the time to make the plan and just keep those notes. Write down those ideas and look at them from time to time and try to see how are they connected? What's consistent about them? That'll help it because I try to help my friends find jobs and they come to me and say, "I need work." I'm like, "Okay, what do you want to do?" "I don't know.

I just need a job." That is an impossible question to answer. I've never been able to help a single person in that situation, but if they say, "Well, I'm actually interested in the idea of selling. I like to sell." "Okay, what kind of things?" "I also like cars." "Great.

Now, pick up the phone. Here, call this person, this person, this person." You've got to know what you're trying to do. Compare it to sales. The essence of professional selling is to figure out what your product is and then figure out who's the right customer for that product and then you figure out how to reach them.

In finding a job, you need to figure out what your product is, what types of services does your personal services corporation offer, who would be the right fit for those types of services, and then making the connection is easy. So, simple thing you can do now to prepare to be laid off is keep lists of future goals, future ideas, future businesses, future jobs.

Keep lists of what you think your skills are. It's a lot easier to sit down and write your resume if you have a list of all of the skills that you think you have. Keep a list of companies you admire. If you hear of a job that sounds fun, write it down.

If you have certain hobbies that you're interested in, write them down. Look for ways if you hear of somebody making a little bit of money on them, look for ways. Overall, start thinking like an independent consultant. And here I'm just expanding the theme, the concept of running your own personal services corporation.

Think like a consultant and recognize that you need to establish your brand in the industry, whatever that industry is. Whether or not your company approves and pays for it or whether you need to do it, get out there within your industry. Go to the conferences, read the books, the blogs, the trade journals, the articles.

Look for what the other companies are doing and keep current on them. Expand your brand by volunteering to teach a class at a local university or write columns for your industry trade journals. Focus on building your reputation as an individual, as an independent consultant. Of course, you need to promote your business because they're your best customer, but that's what you would be doing if you were a consultant.

Build your own reputation, especially online. That was one of my major frustrations with the large corporate financial services companies is you spend all your time building their reputation and not your own. Focus on enhancing your marketing skills. What's going to make you stand out as a consultant? Are there designations, credentials, certain types of education that you need?

Simple example. Again, just speaking from what I've experienced. Simple example of financial credentials. I don't put a lot of stock into necessarily all of the academic importance of education. Education is education and it's vital whether or not it's related to academia. But if there are things like credentials or designations in the financial business that you can get, get them.

Because here's the thing. My name looks a little bit ridiculous as far as all of the credentials, but if I were applying for a job as a financial advisor, just purely on the worst way possible off of a resume, automatically my resume goes to the top of the chart or to the top of the stack.

Now the cool thing is I don't ever plan to do that, but all of those things help me to do a better job now for my existing clients that I'm never in that situation. So whatever it is in your industry, take that and look for it. If it's designations or credentials or a degree or a certain type of education, get it.

And whether that's formal, you need an MBA, you need another advanced specialization, do that stuff. Or whether it's less formal, starting a website where you talk just about your business, where you review all the books in your business, and you've established the industry blog or the industry podcast, that will help not only your current company, but also helps your resume float to the top of the stack.

Every industry needs this type of work. It will help you now, it'll help your current company, but it'll also open up opportunities for you. And the vast majority of us need to be building a public platform for a few reasons. Again, planning to be laid off. If you build a public platform for your voice and your content, you're creating leverage for yourself, both positive net leverage and potential negative leverage in this sense.

Positively, you're going to be viewed as an asset to your company, because after all, you're a consultant to your company. You're a personal services corporation, and they're your best client. And so, as part of your work as a consultant, you're going to be helping to build their reputation and their brand.

But, as far as the potential negative sanction, is negatively, you're going to have a little bit of leverage. You're going to be viewed as having a voice and a platform, and the employer is going to treat you carefully. Doesn't mean you won't get laid off, but it at least improves your chances of not getting laid off, and it helps a little bit with your leverage.

You need an independent communication system, and that helps you in your industry. So, it's a win-win-win. If you're in the right industry and your company is laying you off, and you're established as a voice, all you do is just put out a notice, and your competitors will hire you right up.

And, that'll probably happen before the layoffs if you're smart. Because, the fact that you are a public figure, knowing what's going on in your industry is going to help information flow to you, and you're going to be ahead a little bit of everybody else. And then, even if your whole industry goes down and you need to pivot to a new industry, then your expertise and your platform is going to give you a solid place to work from.

So, consider that. Build your platform before you need it. Think like a consultant. Next, build and maintain your network in an organized, systematic way. Be proactive about this. Harvey McKay wrote a great book. It's called, "Dig Your Well Before You're Thirsty." The time to build a network is before you need it.

So, be proactive about it. Another great book by a guy named Keith Ferrazzi, years ago. These books are old, old. But, he wrote a book called, "Never Eat Alone." And, if you want to talk about proactive networking, the book is just as relevant as it used to be. Go and find Keith Ferrazzi's book, "Never Eat Alone." But, just the simple stuff.

Keep contact information. Save the contact information of all of your current fellow employees. Take the company list home. Make sure you have that information, because you never know if you need to get in touch with somebody. If you move from one place to another, you need that, in the old days, the Rolodex, today, the contact book.

If you keep all of your contacts on your company's cell phone, and they're not backed up, and you get laid off, and your company's cell phone goes away, not smart. This is, again, probably too focused on me, but just as an example, I can only speak from experience. I haven't lost, I don't think I've lost contact information for anyone I've met since I was about 18.

Because, I was obsessive compulsive about this, because I was reading all the business books, and I knew I needed to do it, and so I share that with you. Because of that, I was able to have all kinds of people's information. Now, that doesn't mean I have a relationship with them, but at least I have a name and a number.

I could go, and if you say, "Well, Joshua, you're going to Canada." Okay, and I can go, and I can search my database for who do I know in Canada. And I could come up with, you know, it comes to me right now, I could come up with a name and number of the couple that I met in Colombia, that I had dinner with one night there, that I met at a hostel, and they had spent their time driving around Central and South America for about a year, and we had a great time, and they invited me to come see them in Canada.

I could go find that info. And so, when I got started in sales and financial advice, that helped me immeasurably. Because instead of sitting there and saying, "Well, I know 100 people that I'm going to call on, and I'm going to sit there and cold call out of the phone book," I was able to make hundreds and hundreds and hundreds of phone calls.

And if worse came to worse, I had to do it again, and my family were starving, I'd go get a network marketing gig of a business or a product that I believed in, and I've got those hundreds of people that I could reach out to. Now, I don't want to do that, but it's a backup plan.

So something as simple as keeping your contact information and keeping it organized is incredibly valuable. And the higher you go, you'll notice that the network, the contact information, the ability to get through to the people that matter is one of the biggest deals. And you've got to build that proactively.

Focus on helping people. Add value constantly. It's not slimy, it's not self-seeking. The key is add value. The key is help. Build a local group, a local support group, or a mastermind group, or people that you're connected with. Just the guys or gals you have breakfast with or drinks with every Thursday.

Volunteer in the local organizations. Pretend that you move to a new town and you don't know a soul. What would you do? Well, you'd get involved. So, get involved. Build the network. Look to help people. To advance people. And then, if you're ever thirsty, because you got laid off, your well will be dug.

But you've got to do it now. Make the plan now. Be recruitable. Take the calls that you get from recruiters. Depending on your type of industry, you may or may not get this. But take the calls and save the recruiters' contact information. Keep a special file. And in the tomorrow's show, you'll see why that's important.

In addition, consider having a backup side business. Here's the thing. Let's say that you were a business consultant. And you came in and you are consulting Joshua Sheets on his business. And Joshua tells you, "Hey, you know, Mr. and Mrs. Consultant, thank you so much for coming in. The reality is I have one really great customer for my business.

This really great customer is, I don't know, Acme Corporation. And Acme Corporation is my number one customer. They pay me $100,000 a year." And you say, "Well, do you have any other customers?" "No, no. Just Acme Corporation." "What if you lose Acme Corporation?" "Well, I'd be down to nothing." And that's the problem that every single one of us who are employees faces.

People talk about risk. This is one of the things most entrepreneurs think about. Most entrepreneurs, if they woke up and only had one customer, that would make them sweat. That would be a real problem for me. I wouldn't want to face that situation. Now, you might do it for a time, but you'd be aware of it and you'd be working to build things like I'm talking about as backup.

I prefer to have hundreds of customers. Right now, on Radical Personal Finance, I've got 175 customers. And I see those 175 customers are paying me $1,747.50 a month. So if 10 people get mad at me and leave, stop being my customers, I'm in a much better shape than if I had one.

Think about it. But don't just think about it, work on it. Build a little side hustle. Build a little side business. In yesterday's show, I talked about working and working a lot of hours. In my mind, this is a double-edged sword. You've got to be careful here. If your best potential is at your company, and if you're really connected to it, then I think you're probably going to be well-served by really focusing your time and efforts on that company.

Because there should be, if there are opportunities for advancement, if you have the ability to work effectively, if you have the opportunity to move into the upper levels in your company, in your industry, then focus and specialization is really, really key. And we only have 168 hours in a week, and there's got to be a balance between all of the demands of life.

So it might pay you to focus on working exclusively with this company and really helping it advance. And especially as time, as you move up the ranks, the CEO of Walmart is not working a little side hustle. Walmart is their deal. They've got to spend all their time on that.

And the higher you go in corporate management or the higher you go in a company, the more time and the more focus and the more energy is going to be devoted to that one specific company. But many of you listening are not in that type of upper level situation.

And if you're not, or if you don't want to be, for example, my company or my industry, it's okay, I've got a job, but it's just a job. It's a J-O-B. I'm ready to work hard, but they don't treat me very well. Be careful, but sometimes it actually is true.

Or there's not a lot of opportunity for advancement, or you know what, I just don't really care that much. Okay, fine. It's your life. But make sure you're putting in time on a backup business or a side business. Don't spend all of your time working for one company unless you've got major incentive to really shine there.

Try to bring on a second customer or a few extra customers. Having something on the side will help you if you get laid off. Finally, spend some time now thinking through and studying how to get a job. Study resume writing or job finding. Flip through a career book from time to time.

Keep things apparent. I'm not saying I don't keep my resume up to date, but it might be a good idea if you think you need to if you're sending it out to recruiters. And just a simple thing like keeping good records on your accomplishments. This one I struggle with.

I don't pay much attention to this stuff. And then you go to write down the fancy brochure and it's like, "I don't know what I did. I don't know who I joined or what awards I won." So just something simple like keeping records of your accomplishments will make it easier in the future for you to produce a resume or to update it.

Keep track of dates. Have a calendaring system where you can know, "Okay, I started this job here and I left this job there." Very simple, but it matters. And you'll see in tomorrow's show how it matters. Hope this has been useful for you. I'm doing my best. It's kind of out of my head as far as how I think about this stuff.

I've never really heard anybody else talk about it so I'd be happy to have your feedback if this is useful. Hopefully you'll see the connectedness but also the distinctions between all these different steps. And I believe that evidence will show this out. I watch some people and it's like they've got the golden touch.

You look at them and you say, "What do they do?" Well, they do these kinds of things. And they don't ever get laid off because they're the ones who are in charge of laying people off. Well, you don't start there. So you've got to do all the stuff in yesterday's show to build up.

And while you're getting to the position of where you're the one in charge of making the layoff decision, which is the far worst position to be in, I'm convinced. I do not envy people who have to lay employees off. That's a heavy thing to do. But while you're working your way up, you need to have these plans in place.

And then all of these ideas fit together and tomorrow I'm going to talk about how to find a job. And again, remember that one of the great ways to avoid getting laid off is to be looking for a job in advance. And so all the things that I'm going to talk about tomorrow will fit together and fit into this content of this show.

And you can get a job now or you can get a job if you get laid off. So I hope this is helpful to you. Thank you so much for listening to today's show. Thank you for those of you who support the show, the 175 of you. If you would like to help me grow that number to 176, I would be grateful to you.

I'm doing my best to be a good employee for you. Working hard for you, doing everything I can to bring you all the ideas that I believe are important. And I leave you in the judge's seat. You can judge whether it's worthy or not. But if you find my work to be helpful, if you find it to be compelling, please go to radicalpersonalfinance.com/patron and you can put a little number in a box and you can become a patron.

The lowest number is a buck a month. So if you think Joshua's doing a good job and he's a good employee at a buck a month, that'd be great. If you want to put in 500 bucks a month because I'm doing a good job for you, you can put that number in there as well.

Radicalpersonalfinance.com/patron and I'll be back with you all tomorrow. Thank you so much. Thank you for listening to today's show. Please subscribe to the podcast with our free mobile app so you don't miss a single episode. Just search the App Store on your device for Radical Personal Finance and you'll find our free app.

If you have received value from the content of this show, please consider becoming a patron. Your financial support is how I pay the bills for the show and how I plan to grow our content. You can support the show with as little as a dollar a month or as much as you feel the content is worth.

Details are at radicalpersonalfinance.com/patron. If you'd like to contact me personally, my email address is joshua@radicalpersonalfinance.com or connect with the show on Twitter @radicalPF and at facebook.com/radicalpersonalfinance. This show is intended to provide entertainment, education, and financial enlightenment, but your situation is unique and I cannot deliver any actionable advice without knowing anything about you.

Please, develop a team of professional advisors who you find to be caring, competent, and trustworthy, and consult them, because they are the ones who can understand your specific needs, your specific goals, and provide specific answers to your questions. I've done my absolute best to be clear and accurate in today's show, but I'm one person and I make mistakes.

If you spot a mistake in something I've said, please come by the show page and comment so we can all learn together. Until tomorrow, thanks for being here. Some people take the straight path in life, but at Arizona State University, we respect your twists and turns. They make our online students more driven to excel in their professional lives.

That's why our personalized suite of services empowers you, with innovative resources and staff that sticks with you. Make your next turn with one of our 300+ programs at ASU, #1 in innovation for 9 consecutive years. Visit us at asuonline.asu.edu to learn more.