it

I Lost My Job. Now What? How to Prepare for Unemployment

hi everyone thanks so much for joining

us i'm claire obusan

senior editor at bloomberg quick take

and today we're going to talk about

jobs um really staggering

jobs report that came out this morning

in the us

uh 20 and a half million jobs lost 14.7

percent

unemployment i mean the superlatives

just keep coming

and but you know really behind

all these numbers there's a there's an

individual behind all these numbers and

it's a scary time for a lot of people

so we thought it would be a good time to

have a conversation

around job loss job security

personal finances given that these are

topics that are top of mind

for so many people right now and so i

want to begin today's conversation with

a couple of guests

so we first off we have alexis leondis

she's a columnist

at bloomberg opinion and she covers

personal finance and

previously alexis wrote about personal

finance she led our tax coverage at

over at bloomberg news now also joining

us from los angeles is kay

he he's the creator of rad reads and

also a consultant coach online

instructor who writes extensively about

personal finance

career pivots transitions and the

psychology of money

so thank you both so much for joining us

today on this on this

topic so alexis i want to start with you

um the title of

uh one of your most recent columns which

is what we're calling the the q

a today here's what to do before you

lose your job

it was pretty attention grabbing what

prompted you what prompted you to write

write it

um well i felt like there was a lot of

information out there for people who had

already lost their jobs and a lot of

really helpful information about you

know what to do in terms of filing for

unemployment benefits

and so forth but there wasn't that much

out there about what to do if you're

kind of in

what i'm calling like employment

purgatory you still have your job but

you feel like you could be the next shoe

to drop

and who knows if that's going to be in

six weeks or six months but obviously

with the job numbers that we're seeing

it's clear that we're seeing second and

third waves and the second and third

waves you know

could stretch into other sectors whether

they're like the first wave was

obviously more focused on hospitality

leisure frontline workers

the second and third waves according to

economists are going to focus more on

the people who are at the managerial

level

or just in other sectors and they're

part of the supply chains that supply a

lot of the industries that are getting

hammered

um so for all of those reasons i thought

it was really prudent to write a story

and target

it for people who still have the

resources of their employer they're

still gainfully employed

and give them some tips and advice on

what to do

while they're still employed to take

advantage of those resources before it's

too late

essentially so let's get into that a

little bit um

talk us through these steps that you

mentioned like

what are some of the steps that people

can take right now

in anticipation of any job loss for low

anticipated cut in some form of

compensation

talk talk to us about some of the things

that you laid out sure the first step is

really basic i mean it's common sense

um you just have to know what you have

and you have to know what you're

spending

um but when you're trying to figure out

the former a lot of people if you ask

them how much they actually make you

know thanks to things like direct

deposit you know a lot of us don't know

exactly what the bottom line numbers are

so for those reasons it's really helpful

to make sure you're looking at your pay

stubs you're checking out you know with

holdings

all that stuff to find out what you're

actually taking home you know bi-weekly

or monthly whenever you get paid

um and it's really important if you're

lucky enough to hold on to restricted

stock units

or you have some kind of deferred

compensation plan to get a sense of if

you're terminated

how do those plans work so exactly what

will you get

you know when you walk out the door um

so that's the in the first bucket of

what you're

making what you have one other thing

that i heard from a lot of people is

that you know many of us have had

different jobs at different employers we

may have retirement accounts at

different retirement accounts of

different employers that we've totally

forgotten about

so when you're making that list of what

you have you sure you're being really

comprehensive

and including some of those things you

may have forgotten about and then on the

other hand you're you want to get a

sense of what you're spending and you

know what your monthly outlays are

and i think it's generally very helpful

to put those those outlets into two

buckets discretionary spending and

non-discretionary spending

um and in the column i note that some of

the expenses that you've previously

thought of as

mandatory expenses that are

non-negotiable thanks to the cares act

that may have changed you know there's

mortgage forbearance

if you've lost your job or had some kind

of serious reduction in income

there's also deferral of student loan

payments so a lot of different things

that may be available to you

um so it's really important to make sure

you understand the provisions in the

cares act

when the expiration dates are of those

provisions are to get a better sense of

what you know discretionary spending is

versus non-discretionary

and then for the discretionary spending

you know all of us are probably

relying on takeout and other kinds of

things which are obviously very

important

to help keep our favorite restaurants in

business but those expenses add up so if

you're really concerned about having a

big change in terms of your

income then it's important to take a

look at those things

okay i see you nodding i know this is

something you've written so much about

um you know talk you know tell us like

you know you you

and you know and you know for for our

audience also tell us a little bit about

like

your experience you know i'll let you

describe it in your own words but

kind of going from you know a corporate

job into being self-employed and like

having to really reevaluate your your

situation um tell us a little bit about

that

absolutely and so you know i i think

back to this time because 2008 i was in

my 30s

and so the these like having lived

through two crises i'm like okay

i think i've seen this before except in

one i had health insurance a paycheck

you know a structure and in this uh in

this kind of second phase of my life

i've been a solopreneur

a digital creator you'd say for uh

almost

five years now and so you know i had

always

uh embraced that i joke or i i implore

my

my readers to always have the two

numbers that they talk about and

actually

with their partners and just having

their head and it jives with what alexis

said it's like

what are the what's the spending that

you could cut overnight

and you'd be amazed with the number of

uh of people

that have no idea that well-employed

smart

financed people who have no idea how

much they spent in 2019 so that's the

first number

that's more of a defensive number and

then the second is like an offense

number

and the offense number is if you could

just kind of categorically look through

your brokerage accounts

and say i have 50 of my life exposed in

stocks

what would happen if those were down 40

50 just pick your favorite crisis

and just know right away okay if it's

you have 50

of your assets and equities and it's

going to lose 50

you're going to wake up one morning and

you would have lost 25 of your net worth

how are you going to act in that

situation do you regret buying that

house in that situation

and so again they're just like quick

little heuristics so that when the

moment comes right a crisis will come

another one will come

you're you're kind of prepared to at

least you're mentally prepared for

uh for what's going to come from it

so i just want to bring in we're just

getting a question right now from the

audience and so i'm going to pose this

to alexis first and

k feel free to weigh in and so the

question is if i get

get laid off what should i do with my

401k

sure so there are two things to keep in

mind the first is that under the cares

act

um so typically pre-cares act if you

were to take a withdrawal before you're

59 and a half from your 401 k

it generally comes with a 10 penalty so

obviously it's a way to prevent people

from doing that

except in dire situations under the

cares act it weighs that 10

penalty so you can actually take a

withdrawal um

if you need to set up you know an

emergency fund or have

extra savings built up because you

anticipate you're going to lose your job

or you already have

you can basically again take that

withdrawal up to a hundred thousand

you have to repay it within three years

but you won't be hit with that 10

penalty so that's one thing the other

thing um some of the advisors that i

spoke to for my column

highlighted is that think about what the

balance is of that 401k

and if you have more than five thousand

dollars in your account

then you actually can leave it there you

don't have to take it with you right

away

and a lot of advisors suggest that

that's actually a good thing because

often what happens is

people pull the money and then they

don't reinvest it right away

and they miss out on some of the market

rebound so for those reasons

you want to think about what the balance

is and if it's over a certain amount

potentially keep it there until you're

ready to roll it over to an ira so you

don't miss out on any market upswing

okay

oh yeah i would add just one quick thing

is

you know in claire's introduction she

said i write about the psychology of

money so

alexis will cover the logistics of the

cares act and all that

but i think that psychology is think

about the like

are you doing it because are you

redeeming it because of

fear uh like market fear bear market

fear

uh are you doing it because you actually

need the cash

and those are going to be two very

different considerations

you might get so caught up in the

whirlwind and the fear right genuine

fear

of what's happening right now that

there's famous three words in investing

this time it's different you know as a

41 year old having lived through three

bear markets like

trust me everyone was different uh and

so

i would just like encourage you to kind

of um check yourself

in in a kind and compassionate way that

you are doing this because you

fundamentally need the money which leads

to the first point like

you know what your spending is your burn

rate is or

is it are you caught in the emotion and

the uh

of the moment and that might you might

want to take a few deep breaths before

you liquidate for that second reason

awesome that's really great um and so i

i just want to also bring up another

question um open to either of you if you

want to take it um

so the question is coming from our

audience and it's a and person's asking

and this is actually something a good

topic i think

it's a good segue into the topic about

uh networking and job hunting when

it's entirely virtual right that the

traditional avenues of

looking for work are you know are

different now it's gone so the question

is

how can i make my resume stand out

during this time

i'll i'll gladly jump off jump on that

one okay um

so for context right five years ago i

was at blackrock

uh in a in an investment role and i quit

with no plan

and uh we could talk about digital

entrepreneurship uh

and making rash decisions like that if

if our listeners are interested

uh but what what i found was

um i had to build a whole new set of

relationships i was entering a new

industry i was becoming a writer

my world was migrating online and

there's always this

taboo there i would say when i fly into

a new city half of the people i meet

in that new city are friends from

twitter and immediately i get these

strange reactions like

are you what are you doing what do you

how do you even start that conversation

are you that creepy guy that slides

into dms uh and well

fast forward to today like that's the

playing field right that's

that is the only way to network and

there are incredible

incredible stories of people who

are from completely atypical backgrounds

to a specific industry

that just started sharing inform

interesting information on a social

media platform

uh with time caught the eye of a few

kind of thought leaders in that space

eventually they converted those into

full-time jobs so i'm

a big big believer that

fostering genuine relationships on

digitally

through social media can be a phenomenal

networking

um strategy and by the way it's it's the

only one

right now and so that that is something

and again i think a lot of it starts

i think people always say like well i

have nothing to add to the conversation

and i think back to

to this piece of advice that i heard

bill gates say once is like

he said you know everyone always has

something to add to me an 18 year old

has something to add to me to bill gates

and what's that it's perspective bill

gates will never know what it's like to

be an 18 year old and so an 18 year old

telling him

how he sees the world how she thinks

about technology

those are the types of things that are

actually very valuable to your to your

network

and so um think about that as you engage

with um

you know with social media digitally

that's really good to know um i know

okay and it kind of brings to mind what

you were saying

it's sort of like you see you know you

feel free to you know correct me but

it's

you you know you something you said that

stuck with with me it's like no one

really cares what you've done in the

past right it's

if you have something to offer right now

and you know

and you're willing to share it with

people there will be people who will

want to give you

who will want to hear what you have to

say who you know want to give you a

chance right

absolutely and i think i think of uh

there's a gentleman on twitter

uh by the name of jamie cather

catherwood i believe and he was just

like a

history buff a financial history buff

with no financial services experience

and he just started writing these posts

about these like

crashes from 350 years ago that i had

never even heard of and really actually

don't care much about

and but little by little like there's a

lot of financial

history buffs and that like they started

to watch his

his work and people then started just

rooting for him

because he was so passionate about this

thing

and he turned that into a marketing job

at a quant firm and this is someone

completely outside of the

traditional path

that's a nice segue to um another thing

that

uh has come up and i think um it's a so

again nice segue into this and

the role of side hustles um and so

alexis in your piece um and well in your

reporting for the piece you mentioned

that

all the financial planners that you

talked to actually

talked about the importance of uh of a

side hustle can you talk a little bit

more about that

sure they all emphasize the importance

of a reserve fund and however you build

that up

is really really important and

especially to try to build it up

preemptively

ideally before you lose your job is one

way to do that

um so you can do things like if you're

lucky enough to own your own home you

can try to tap

the equity in your home through a home

equity line of credit or a cash out refi

keep in mind those are a lot harder to

come by now and the credit requirements

have been tightened

um but other things you can do back to

the side hustle is to think about what

else you're really good at and at least

again while you're trying to bridge the

gap

until you're getting another job um are

able to find employment next

that being able to fall back on those

side hustles and be able to generate

enough income ideally to put into that

emergency fund is a really smart

maneuver

okay and i'm going to bring it back to k

cause i know you've written so much

about

the side hustle and i think you call it

like diversifying your

identity you know you know tell us a

little bit more about like from your

perspective

yep uh don't do it uh no

i i i i'm gonna speak from both sides of

my mouth because

uh i have made a career a financially

sustainable

you know and we can talk about what i

deem to feel like anti-fragile career

through various modes of digital

entrepreneurship

so i'm a huge huge evangelist of it and

supporter of it

but on from the other side of my mouth

i'm gonna say it took me five years of

writing two to three hours a day

for you know seven days a week five

straight years

so there is like it doesn't just

show up right becoming a digital

entrepreneur

is not that silver bullet that like all

of a sudden

you know yes you know google was started

during the dot com crisis

um and uh facebook was starting during

2008

uh but that so that that is what i'll

say

but the the thing that i love about

digital entrepreneurship

is that it's really like uh it's the

kiddie pool

for a variety of different skills

and diversifying your skill set it's so

so let's take an example

one of the easiest ways to make digital

revenue

is to sell a template online that's that

sounds like so crazy like

who would buy uh you know a fancy

spreadsheet but

people do that all the time for workouts

pre-coronavirus

so you could buy like a 10-tab

spreadsheet

of like different workout plans do you

like crossfit do you like yoga and so on

and for like 10 bucks and again no one's

gonna retire and live in you know new

york city or la

doing uh selling 10 templates but the

minute you create a 10

template then you need to name it

something oh

that's like and put on your branding hat

then you need to like

find distribution put on your audience

development hat put on your social

marketing hat then you need to price it

etc

etc etc and so that little project

that is like this 10 thing that maybe

you know your mom your cousin and

like one high school random friend will

buy uh it doesn't seem like a big deal

but when you realize that you learn

product design branding and audience

development

on your own on your own dime then that's

a really really powerful

uh powerful skill set and then you do

that over a year two years three or six

years ten years

then you become a digital entrepreneur

so okay you you just mentioned a term

which again

segues nicely into sort of the next

topic that i wanted to talk about and i

know that's something you've written

about recently on your blog and it's

it's the building and anti-fragile

career which you know how do you do that

now in in sort of this climate and like

so talk a little bit about it i think we

were sort of getting into that so it

feels like a good segue into that

absolutely uh i think of it as as

two ends of the continuum because it in

one regards you know there are those

companies that are

that are known to kind of lay off the

like every year they lay off the bottom

10

and so if you can invert that if you're

in the top 10

of your peer group you're probably going

to be the last person to

be laid off but that's not something we

can talk about today for tomorrow

but that's something we can talk about

for today for the next five years

right so how do you become a top 10 uh

percent

uh in your uh in your industry but so we

talked about the defensive side like you

know your cash do you know like uh do

you do you have runway uh we talked

about the the more aspirational uh

side like are you in the top 10 percent

of your skills like skill development

but then like in the middle again i

think that there is

you know like diverse like repositioning

uh of skills right i think a lot of so

let's take something like you might have

been

uh you might have been in hr where the

the function might have been quite

traditional

and then all of a sudden like i know it

like

well mental wellness is becoming a huge

part of hr mental wellness in the face

of remote work in the face of a global

pandemic

like sure hr professionals are trained

for that are best positioned to tackle

that but that's

open field right i mean this is just

no one thought that we might be working

remotely till september until

some companies have said january right

there's no playbook for that

that is the opening to kind of raise

your hand

and say you know these are these

questions they're happening in this

space they're happening with my

colleagues they're happening with my

peers

i could see them coming down from hr i

have a personal opinion on

these things how do i triangulate them

and

you know share them with the right

people that's the kind of stuff that's

going to get you noticed

and by the way when there's these giant

tectonic societal shifts

there's giant opportunity especially for

kind of the first movers that kind of

like

rebuild the pieces off of a crisis

so alexis i do want to you know we we've

talked a lot about and like

you know sort of positioning yourself

defensively and

in you know when you are in a position

to

but and again and this is really for

both of you as well but

you know what are some of the steps for

people who don't have the luxury to

prepare that find themselves in this

situation where okay right now

i gotta play defense and i gotta figure

it out today you know

is there anything that would be

different in terms of what you've laid

out in your column

sure the one thing that i should have

added before is while you are still

employed

on the health insurance fund you should

really be taking advantage of that

health insurance

so you know get appointments and while

you can obviously most doctors offices

aren't open or they're

not doing stuff that isn't essential but

once they start opening or take

advantage of telemedicine

that's really really important fill

those prescriptions do all that

sort of stuff before you're no longer

employed then once you've been laid off

and you don't you aren't able to take

advantage of those resources obviously

figure out on health insurance front

whether you're going to purchase

insurance through the exchanges

or you're entitled to cobra you know

figure out what those um

payment people would be because you can

be pretty financial especially if you

have dependents

um and then unemployment benefits um you

know part of the care is act there's an

extra 600

stipend so that's something that people

should be aware of too make sure you're

getting exactly you know what you're

eligible for

um those would be the main things um the

other thing i wanted to raise too 529

payments

that's the kind of thing i hear again

and again that again

unless you have your child is like 16 or

17 is just a year or two away from

college

but that seems to be in the hierarchy of

payments that you're making you know

41ks or other accounts seems like the

529

it's totally fine to pause those

payments because especially if you've

been laid off already you have more

essential things

you know that you want to think about

like your mortgage or

food and obviously very basic things so

don't feel too bad about pausing that

temporarily

and the you know the penalties for doing

so you can easily catch up so it's not

too bad

okay anything to add from a you know so

from sort of a job hunting

reassessment type yeah i would add um

i would add two two things the first is

like

who's your squad right i always ask

people if if you're down if you're

you're down financially health wise

who is who's going to go to bat for you

right

and i think if you think of the long

game of anti-fragility you've been

you know you're not going to call

someone you haven't spoken to in 10

years and say like hey i need a favor

right now

but like write it i i believe in like a

very systematic way of writing this down

step by step like

these are the five 10 15 people that can

help me

uh you know if i feel like i'm in a

precarious situation start planting the

seed obviously confidentially

so on ask them who they should who you

should talk to what opportunities

they're seeing

uh you know get ahead of it through

relationship building genuine genuine

relationship building

the second is that from an economic

perspective this

this crisis is creating a lot of

companies that are doing

really well in the companies industries

that are doing really well in industries

that are

doing really poorly so one one very

simple thing

uh would be to look at all the companies

that have raised venture funding uh

during the pandemic they're playing from

a sign of strength you know i could

think of two

you know notion and uh stripe raised

large

large rounds late stage rounds with

every 50 million dollar round there's

50 new jobs across marketing comms

finance

you know just because it's a tech

company late stage tech companies

hire you know everything from office

managers to paralegals

to front-end engineers so look for the

pockets of strength uh and now by the

way everything

is remote or a lot more is remote that

you know that company that you didn't

want to work for

in chicago might actually be open to um

to to you working remotely

um we're getting a couple more questions

here so alexis this one

is for you um the question coming from

the audience is if i get laid off do i

need to consult a lawyer

um i would say it depends what your role

is and how kind of complicated your

exit package is going to be um so i

think currently if you're an

executive type role and there are lots

of moving parts

as part of your exit package then yes

because i think it's very true that kind

of the first moments after you're

terminated or you get the call

that's when things are most fluid and

most negotiable so i think it would be

very helpful if you've been speaking to

an employment lawyer

to kind of just again get a sense of

what you're entitled to what you are in

so you can try to negotiate those things

um initially you know right

before you even walk out the door and

things have been more set in stone

um so that i think would be the general

rule of thumb if again

you don't have that complicated package

or they're pretty straightforward

then it's probably not necessary you

know pay legal fees

all right very good advice and so uh we

have time for just one more question so

i'm gonna pose it to both of you we'll

start with kay and so the question we're

getting from the audience is

share your best tip for a virtual job

interview

ooh that's a good one good lighting and

good sound

um that's not my answer um

i would say you know when you

communicate

via zoom or digitally a lot of the

nuance

of like body language gets lost so

just it's it's be yourself more

um like ask more questions like you have

to overcompensate for the lack

of subtle um body leak cues with

language and i think that that's okay

just be

be genuine be more curious like ask a

little bit more like how's your day you

know

uh how's your day going how are you

doing today things like that and then i

would also flip it

uh and i think this is not just for

virtual handwritten thank you notes

think about you get uh 100 emails a day

a thousand

things in your stream how many times

does someone send you

a hand addressed letter to you

especially in a time when we're all home

that thing jumps to the top of the queue

no matter what so

uh stand a handwritten note even when

you're not in a quarantine

that's really good advice um alexis

anything to add here on one final note

i'd say keep your children entertained

with an ipad

which we're all doing

guys um you know we just run out of time

but this has been a great conversation

thank you both so much for joining us um

so i want to thank

alexis leondis uh bloomberg opinion

columnist for joining us

and also kay he from who's joining us

from los angeles he's the

creator of rad reads um again thank you

so much for such

a informative uh conversation especially

in a time like this

uh so i just want to remind everyone who

is watching that

you can follow our ongoing coverage of

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thank you so much thanks thank you