For most of us, the economic downturn is not doing the world well as far as our financial stability is concerned. In the coming months, I am expecting more jobs to be shed, and household income to either shrink or will not grow as fast as from the previous years.
MY COMPANY WILL BE UNDERGOING RESTRUCTURING
As for the company I am with for the past seven to eight years, our financial woes started last year. The good news is after months of discussions, our Group has finally been bailed-out of troubles with new owners and investors, with the backing of the government. While the financial situation is stable now, restructuring is imminent. It has already been announced that, in order to return to profitability, many jobs will be lost. I expect at least 20-30% of the workforce will be cut, after the summer holidays.
While Asia Pacific business is still coping reasonably well, I do not expect we will be excluded in the retrenchment process. With my “prepare for the worst mindset”, in fact, I expect that Singapore office will face the “axing reality” sooner, because we have no unions here to protect our “rice bowls” unlike in Europe where laying off process is more complicated and will take a longer time. Hence, my job together with my colleagues’ jobs here is not guaranteed. And with my wife already resigned, we anticipate tougher times ahead. That said, we are all ready to weather this storm and have faith that we will come out of the storm unscathed.
MINDSET OF PREPARING FOR THE WORST AHEAD OF TOUGH TIMES
Despite the possible career calamity, I had my backup plans. Those who know me, will know that I will always prepare way ahead of a calamity. As a matter of fact, I had already anticipated for this type of crisis to happen since five years ago or even way before that. Thanks to the 2015 oil crisis giving me the head start warning.
To back up my thinking, I had built up a relatively sound finances over the years. Aside from my investments in shares and precious metals, just the cash alone, should be able to last my current expenses for more than two years without income from employment. Our rental income, dividends and interest received should provide some minimal help also, but definitely not sufficient in view of my huge household expenses.
I am also all ready to cut expenses by at least 30-40 percent in the worst case scenario. This is already proven viable from the experience of lower expenses as a consequence of staying at home in the past months. For instance, I will cater less extra income to my mother-in-law whom I already paid her handsomely in the last ten years. We will eat more simply and will have less outside meals and less personal entertainments. If that is still not enough, then my child will have to sacrifice some of their enrichment and sports lessons. I can also lower my charitable expenses. We had also successfully apply to withhold mortgage repayments which can help for at least half a year. I am driving a COE car which has already been fully paid and still can drive for another 8 to 9 years.
MY CAREER BACK UP PLAN – START MY OWN
That said, I cannot plan my BACKUP PLAN based on the fact that we are without household income and just living on dividends and savings and keep on cutting my expenses. THIS IS NOT WISE. This is the worst scenario but it should not be the immediate backup solution. Imagine you are running a business, and all you think is cutting cost and using your cash balances to pay salary and fixed costs. It will be disastrous. Instead you should always be thinking how to grow your revenue or have diversify forms of revenue from different segments, in case one segment collapse.
My backup plan mentioned here is to start my own on a partnership early next year with a close friend. This friend is very entrepreneur and already have a stable and sustainable business. Furthermore, this friend has a heart of gold and is so unselfish in helping people around him. He had also gone through many difficult times in life, but each time overcome it to become stronger. I have utmost respect for him as a friend, as a father of a four kids, a good husband and as a boss of more than hundred staffs.
I believe that God helped me out of nowhere to know this friend years back, and led us into a very close relationships through His ways. In a way, we started discussing about business collaboration sometime back, when my current company’s financial woes were announced. This fortifies my belief that it is God’s plan due to the perfect timing.
Of course, in order for heaven and earth to help me, I knew I have to keep on walking on the righteous path, even if it means sufferings for myself and my family in the short term. According to my friend and potential partner, aside from my supplementary work expertise and experiences, it is really my righteous attitude as a genuine and loyal friend, plus my courage to speak the truth, that most appeal to him. Hence, the invitation to partner.
What is even more exciting for me is that it will be a totally different business endeavour. It will no longer be in the manufacturing sector, nor have focus in the maritime or oil energy industries. Instead, the new endeavour will focus on business related to technology and essential services. For example, Internet of Things (IOT), Data analytics, Food and other essential services etc. I can say that if this discussion is successful, it will be the start of my second career, something I had not plan for at all, yet, had often times think about it. I am excited for it.
Nonetheless, while all seems positive now, there is always a chance of agreement not going through up to the last stage. I cannot discount that. In addition to that, while my friend agrees to pay me sufficient salary before this business becoming profitable, I expect pay adjustment downwards to be significant.
To start my own, I also carry huge risk of giving up my MNC experiences to enter into a smaller business venture. This will mean giving up a job with good income at a senior position, and forgoing all the good relationships with colleagues and all the respect I had in the current company, which I had painstakingly built for the past many years.
Furthermore, I may need to give up many contacts in my current industry which I had conscientiously built for almost the past two decades. To alleviate this regret, the truth is, many contacts has already left the industry during the oil crisis. What also bode well for me is that a lot of contacts will still be useful in the new business venture in terms of regional coverage as well as their companies’ technological needs.
It is without doubt, that there can easily be a chance that the new business ventures will not take off or will not be successful. Or both my partner and myself does not agree eye to eye and eventually go on separate ways. I already plan that If this career back up plan does not work, I can always go back to being an employee. With my experience, age and humble eloquence in interviews, I do not think it is that difficult. Frankly, I had received and declined similar or higher career position interview invitations lately, even when I am not actively looking for any opportunities. Also, perhaps in the midst of the failure, I will learn new things to be able to start my own venture in a more successful manner. Or at least with my current finances, I am still able to work out something viable after the failure. I definitely hope that big failure will not be the case here though.
Humbly speaking, I am not saying I will be successful, but at least I have gather the skills, calmness, patience, experiences and more wisdom, which I felt I am more ready now to start this new business venture. Also, I feel that you can have a higher and faster success rate in your own venture when you have relevant work or life experience track records to speak of with at least good backing in financial ability. This is aside from the drive and hunger which are all important.
My current job began with me as the first Asian employee seven to eight years ago setting up the office from scratch here. Furthermore, I also had prior experiences holding P&L responsibilities in MNC and public listed company. Hopefully these past experiences will help. To top that up, my involvement in all functions of a business, from sales, marketing, finance, HR to project, engineering, commissioning, and after-sales services should come in handy in running my own venture.
It is in my opinion that you will never know what is going to happen in the road ahead until you dare to take a step out of your comfort zone TO START! After trying, you may fail, but you can also review and improve and eventually to better it more and more.
I know most readers and writers here are looking at successful investments plus dividends to achieve your FIRE (Financially Independent, Retire Early). But frankly, if you are always an average middle income earner, it is not that easy to build a portfolio big enough to have dividends that can sustain your living expenses including unexpected expenses that may crop up in your life.
Unless, you have a rich enough parents supporting or leave behind money or properties for you, and you prefer to really live on minimal expenses and prefer to be single or at most married with no kids, it is not easy to be FIRE in Singapore in your 30s. I am not throwing wet blanket but this is the truth. Many of you readers may argue to me that many bloggers here are able to FIRE young, but the truth is you simply do not know the real situation behind the portfolio posted.
For now, let’s assume you are middle income earner, want to get married and have kids, so my question in this article to you is,
Have you already drawn up your career back up plan? If not, you should have at least some backup plan aside from the finances set aside during your wife or your unfortunate retrenchments.