Why Getting Laid Off Was the Best Thing To Happen To Me
By Jonathan Bui
Economists often joke that a recession is when your best friend loses their job. A depression is when you lose yours.
The widespread job losses of 2020 were a staunch reminder that blue collar and white collar workers alike are never truly insulated from a job loss that could upend everything they've worked for. Although we did see a more prominent K-shaped recovery for more white collar workers who were able to quickly transition to remote work, the unemployment rate is still hovering around 6% in early summer of 2021. This fast recovery is much more palatable than the double digit unemployment rates we witnessed last year.
Even in a more stable bull market, a job loss could blindside you especially in more volatile industries or perhaps a business that is not strong financially. This was certainly the case for me when I took on my first job as a healthcare professional for a large company. The idea of having a graduate degree and a job providing a service that people needed routinely was enough mental cushion to kick back, relax, and not think about black swan events. What you hardly think about as a newfound graduate are the behind the scenes dynamics of a big business. You simply assume everything is rosy as the paychecks continually roll in. But the most susceptible businesses are those with large debt burdens, a weak income statement, and a management team that is less than mediocre.
And boy did the music end abruptly six months after having moved into a new city, opened new credit cards, and accommodated a pricier lifestyle. The company declared bankruptcy, citing extreme competition and a picky consumer base. Longer tenured employees had a severance package to rely on, but I on the other hand did not. The years and years of academic preparation did a great job of instilling fear, panic, and apprehension in these desperate times. It was a struggle.
How was I going to pay for rent? What was going to happen with my car? What do I do with all these credit cards? Does the government help with this!?
Getting used to a new income after graduation settles in fast! But having no income with accumulated expenses becomes a wicked scramble. My last days were spent on a piece of cardboard on cold tile as the company discharged patient profiles, equipment, and practically everything tangible.
"You're free to leave early you know," my manager said.
"I think I'll spend a little more time here." I wanted to really let things marinate.
What felt like the end of the world for a mid-twenty something was really a catalyst for growth. It just never feels that way at the time.
You realize that volatility is normal and actually a blessing in disguise.
Nobody ever really takes a linear path up and to the right, except for the occasional meme stock. Sometimes you need a shell shocker to really wake up and harness what you were designed to do: Adapt. You no longer wait for things to simply happen for you. You no longer have an unfettering fear of loss. In fact, you are now prepared for it and you will have a strategy in place to pivot or accelerate. The next downturn won't be a trough of despair, but rather a springboard.
You no longer rely on a single income.
We often hear about portfolio diversification when you're investing, but less so about income diversification. Having multiple sources of income protects you from unforeseen events, emergencies, and sometimes yourself.
The next several months without work helped me prepare for the next lines of employment and self-employment. I took on two jobs to feel less vulnerable to shaky businesses and used it as leverage to build a foundation. Whether it's taking on an additional job, working on a side hustle, or building a business, diversifying your income gradually over time is a powerful way to set yourself up for financial freedom. Gone are the times where someone can completely rely on a single employer to keep them paid, nurtured, and set up for a comfortable retirement.
You instill a greater sense of urgency.
We all procrastinate, but do you know anyone that precrastinates? This would be the complete opposite and does have a detrimental side, however your sense of urgency is a gift that may often be robbed when you're the most comfortable. When coupled with a long term plan, urgency now is a recipe for getting a ton of things done and conveniently set up for the future.
Time is finite and we're well aware, but it's easy to act like it isn't. Losing my job was an accelerated way of defibrillating this lull. Give yourself a little less time and you'll be amazed at what you get done.
See it as a means to develop your human capital and explore your options.
One of the hardest parts of this process is taking time to reflect on your skill sets. The future of work is heavily reliant on the investment of human capital, both individual and on a macro level. If your skills may not be durable over the next 10 years, this can be an excellent time to explore what you're most interested in and what you can be great at.
Are jobs growing in your industry? Is there wage growth and mobility? Is automation a risk factor?
These are questions to ask as you delineate what skills are most appropriate for you. Double down on your problem solving skills, teamwork, and adaptability. Investing in yourself and your value delivery will always pay attractive dividends.
I saw this opportunity as an important time to develop skills in business and investing, taking time after work to read, self-teach, and put these elements into practice -- but it does take time.
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