Lay-off Diary Chapter 3 - The Beginning

So you have lost your job and are now wondering what to do next.

Once the salary income stops, your top two priorities should be to find a new job asap and ensure your emergency corpus lasts as much as possible.

Finding a new job

The quickest way to find a new job is through networking and references. But before you start tapping into your network, take few moments to think what you actually want to do. Do you really want to continue in similar job you have been doing all these years? Or do you want to pursue that amazing business idea you had stored in your mind for so long? Or maybe give a shot to your passion.

 For your convenience, I am listing few of the job related options you can choose from:

1. Find new full time job at similar or higher role with similar or higher pay
2. Find new full time job at similar or lower role but with a pay cut
3. Find a new job at something you are passionate about but which may pay less as you may not have relevant experience
4. Start your own business
5. Open a franchise store
6. Become a freelancer by using your contacts and experience
7. Turn your hobby / passive income work into income
8. Become a full time market trader and trade in Intraday, Swing Trading, F&O etc to earn income
9. If you are good at networking, then sign-up as insurance / mutual funds agents and help people buy the right policies while earning commissions from sale
10. If you have social presence or can influence people, start affiliate marketing. Get affiliate link for any product you are comfortable with and start recommending it to others.
11. Find a part time job or a contract based job either in your own domain or with Amazon, Uber, Swiggy, Zomato etc
12. If you believe in FIRE concept and think you have achieved the required corpus, actually retire.

My suggestion will be to not close any of these options. Keep everything open and see how things go. But focus first on top two or three options which you feel can succeed.

 Once you have decided that, spend the first week focusing on your resume. Update it and share it with as many people as possible. Instead of having one generic resume, create variants if you are applying for diverse range of roles. Update your profile in job portals and LinkedIn, create job alerts matching your requirements and let people know that you are actively looking out.

Reach out to your old colleagues, ex managers, class mates, neighbors and friends. Most of them will be in similar or higher age group than you and well settled in their jobs (particularly if you are in mid or senior management level). Tell them the situation and ask them for help. See if they can refer you internally in their company or anywhere else. Most of the people will sympathize and actually try to help you out.

This will take care of starting your job hunt.

Managing Emergency Corpus

Next important things you should do in first couple of weeks is to focus on your money matters.

Do a thorough analysis of how much emergency funds you have, what is your insurance cover and how much corpus you have saved for future goals. Note down what is your monthly expenses segregated into multiple categories - your mandatory basic expenses, your non mandatory expenses and your SIP expenses for future goals. Note that some of your expenses will now decreases as you are not going to office - you will be saving on fuel and F&B costs. Basis this, identify how long your emergency corpus can last.

Once you have identified this, park your emergency corpus in appropriate low risk instrument. Do not let your money lying in savings account which hardly give 2-3% interest rate. Instead, do either a FD or park it in short term debt funds. That will give you better interest and allow your emergency corpus to beat or at least match inflation.

In most of the cases, if you are being laid off, you will also get your notice period salary plus severance pay which is usually number of years of service converted into months. For example, if you had worked in company for 3 years before being laid off, were earning 2L per month and had 2 months notice period, you would be getting total of 10L (6L equivalent to service period and 4L equivalent to notice period).

You can park this entire 10L in a good hybrid fund or debt fund and do a Systematic Withdrawal Plan (SWP) to keep income flowing. A quick calculation on SWP calculator shows that if you withdraw 5% of it every month (50,000/-), the corpus can serve for over 1.9 years (assuming it makes 10% returns annually). It can be used after your emergency funds run out so you have sufficient time to find something else.

So takeaway from this chapter for you will be -

1. Analyze what you actually want to do
2. Create variants of resume and share it within your network
3. Let people know that you have been laid off and ask for help
4. Review your finances and invest emergency corpus in low risk - high liquidity instruments like FDs or debt funds
5. Invest the severance package you receive in hybrid funds and start SWP from it once your emergency corpus runs out.

Hope you found the article useful. Please share your thoughts and stay tuned for next chapter!