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unemployment

Why You Need to Diversify Your Income Sources

By //  by Kevin M

Yesterday I ran into a friend I hadn’t seen in a few months; we only had a few seconds to talk but he let me know that he had lost his job a couple of months ago. Another buddy of mine was given word that his job would be gone by the end of this year. For what it’s worth, both men have families to support.

We hear stories of people losing their jobs all the time, so these episodes are hardly unique. But what is interesting is that both men were what you might call “well employed” – that is, each had a well-paying position with a large, well-known company that they had worked at for many years.

Why You Need to Diversify Your Income Sources

Jobs Are No Longer Secure

The moral of the story is that there are no safe jobs anymore. Anyone in nearly any job can be replaced either by some form of new technology, or by less expensive workers outsourced from overseas. This is happening with technical and managerial positions as well as clerical and factory jobs.

There are different ways to deal with employment instability and no matter how secure your job seems to be at the moment, you should consider investigating your options. And the time to do that is now, before you’re forced into it by a job loss.

Diversify Your Income Protect Finances

Savings Will Last Only So Long

Many people concentrate on building up their savings as a safety net in case of a job loss. That’s a good idea, however it’s not nearly as effective as it once was.

In an economy where it can take months or even a year or more to find a new job, a two or three months savings cushion just won’t be enough. Unless you can save enough money to cover your living expenses for a year or more, savings will do little more than give you a little bit of breathing room. Not that that’s a bad thing, but it will prove to be inadequate if the job loss turns into a long-term process.

What about unemployment insurance? There are two limitations with this, the first is that for most people, the amount of your benefit won’t come close to covering your living expenses. The second is that unemployment benefits only run for a few months. Like savings, they’ll help at the beginning but sooner or later, they will run out too.

Build up your savings in case of a job loss – but be ready with additional income sources. Savings will cover you in the months immediately following your job loss, but your additional income sources will be your long-term safety net.

How To Diversify Your Income Sources:

Using A Part-Time Job To Apprentice For A Back-Up Career

One of the best ways to be prepared for the loss of your job is to have another one ready. You may be able to do that with a part-time job. I’m not talking on a job pumping gas or serving lattes, but something more substantial.

Ask yourself the question, “If I didn’t have my current job what other kind of work would I do?” The answer to this question can provide you with the insight that will lead to the type of part-time job you should get. What you’re looking for here is a part-time job that will lead you into the career of your choice, or at least into one that could be a reasonable back-up career. .

By taking such a job on a part-time basis your accomplish at least two things: 1) you get the training and experience that you need to enter that field, and 2) you pre-position yourself in a job before you actually need one. The goal will be to convert the part-time job into a full-time one if you can’t find a replacement job in your primary career.

One of the problems with job losses is that they usually occur across an industry or even an entire career field. That makes finding a replacement job very difficult because not only are there a small number of jobs available, but there are also a lot of candidates applying for those jobs. Many people are having to change fields following a layoff.

With a serious kind of part-time job, you already have a replacement career waiting in the wings. The transition is shorter, smoother and easier because of your advanced efforts.

Diversify Your Income By Starting A Business

A similar alternative could be starting your own business. Choose a business that you would like to enter and/or one you have an aptitude for. You can begin it as a side venture and develop it at your own speed. The idea is to build up gradually so that if you do lose your job, you’ll be able to quickly convert the business into a full-time occupation.

Whether it’s a part-time job or a part-time business, not only will you be building a second career for yourself, but you’ll also be providing an extra income that you can put into savings. The combination of higher savings and a backup income source will leave you well prepared for whatever happens after losing your primary job.

Retraining

Retraining is another option. Even though some fields are in decline, there are others that are going strong or are in growth phases. Sometimes all you need to enter them is some formal training. This could be a degree program, technical training or just some courses that you might be able use as a springboard into another career field.

Check with the course offerings at your local community college. They often offer training in career fields that are what you might call “closer to the ground”. This might include fields that are more hands-on in nature, such as those in the medical and computer fields, as well as some of the trades. Those are the type of occupations that tend to do well no matter what else is going on in the economy.

Whether you decide to use a part-time job, part-time business, or some form of retraining, seize the opportunity now to prepare for a job loss that may come later. If the job loss never happens, you’ll have yourself a solid second income. But if it does happen, you’ll be ready for it.

photo credit: freedigitalphotos.net

Filed Under: Make More Money Tagged With: Additional Income, Diversification, Economics, economy, financial future, Income Source, Job, Job Interview, management, Protect Your Finances, Protecting Your Financial Future, unemployment, Your Financial Future, Your Income

5 Ways to Get a Job After Long-term Unemployment

By //  by Kevin M

The financial meltdown that began in 2007/2008 hasn’t just eliminated jobs, its destroyed careers entirely. Millions of people have been unemployed for six months, a year, two years or even longer. Extended unemployment benefits that initially allowed up to 99 weeks have been cut back to 73 weeks, and unless the program is restored, benefits will be cut back again by the end of this year.

If you’re one of the people who lost their career during or since the meltdown, or if you’re facing the prospect of disappearing unemployment benefits and you need to get back into the job market after a long layoff, you’re facing an uphill fight. There’s fierce competition for jobs, little chance of on-the-job training and no small number of employers who are reluctant to hire the unemployed.

But here are some strategies that could help you get back into the job market, if only gradually.

Get A Part-Time Job

If you’ve been unemployed for a long period of time, getting back into the job market will be like starting over. It’s very much like when you were a teenager looking for your first job. You have to start somewhere, and a part-time job is a way to ease in gradually.

No, a part-time job isn’t like a full-time job—you probably won’t have benefits and you’ll get nothing close to a living wage. But here are a few things a part-time job can do for you:

  • Working part-time will get you out, about and circulating, and meeting people who might help you find a full-time job
  • It will provide you with a current work reference when you apply for jobs
  • A part-time job could turn into a full-time job down the road
  • A part-time job can be an opportunity to earn-and-learn your way into a new field
  • Earning money in any kind of job improves self-esteem, and that’s something that probably needs to be rebuilt after a long period of unemployment
  • When you apply for full-time jobs elsewhere, you’ll have something to put in that ever present little box that asks “Present Occupation?”

Working part-time won’t be the answer to your career problem, but view it as a necessary and temporary step on the road to something better.

Do Volunteer Work

One of the biggest problems with being unemployed for a very long time is that you can get out of the work routine entirely. It’s not just a time management issue either—there’s a psychology to working that can get lost when you haven’t done it for a while. A good way to get around that is by doing volunteer work. You can do this at churches, charities and even hospitals and schools.

Even though you won’t be paid for the work you do, it can get you back “into the groove”, giving you a place to go everyday and something other than your unemployment status to think about. And much like a part-time job, it gets you out meeting people and making new contacts, and might even turn into a paying job at some point.

Look Into Temporary & Contract Assignments

This is an area that’s gotten tougher in recent years—it’s been degraded by the same factors that have weakened the overall employment picture. Even so, it’s still worth looking into.

Even if the assignments are sporadic, they will place you on the inside of potential employers where you can get valuable contacts who might help you get a job. Also, many companies are now hiring primarily by temp-to-perm, giving them an opportunity to see potential employees in action.

{Learn all you need to know about the contingent workforce.}

If nothing else is happening, give it a try—when you’re unemployed, doing something is always better than doing nothing.

Work For Small Businesses

Everyone wants to work for large employers; they pay more and offer more comprehensive benefits. As good as that sounds, it also creates a traffic problem—too many applicants for too few jobs. As a result, large employers can be very selective when it comes to hiring and they don’t look too kindly on the unemployed.

If you’ve been out of work for a long time, look for small businesses instead. I’m talking small as in no more than five to ten employees. You won’t get anything close to top dollar, and benefits will probably be out of the question, but small businesses do have their advantages, and they aren’t minor.

Small businesses can’t draw in the top talent—sometimes they can’t get any talent at all! And being closer to the ground, small business owners are likely to be more sympathetic in regard to your long period of unemployment. If you have a skill set that matches their needs, and there’s a good personality fit, you can get hired much more quickly than you could at a large employer.

While you’re working at the small business, you’re getting new experience and training that could translate into a better position somewhere else later on.

When All Else Fails, Try Working For Free

This is similar to volunteering, only you’re doing it with for-profit businesses instead of charities. Most organizations have plenty of work that needs to be done—they just can’t afford to pay anyone to do it. That’s an opportunity for you!

Find out what jobs a business needs done that they can’t afford to pay for, and offer your services to do it for them. This will work better with small employers than with large ones, and there are several ways you can play this:

  • You can use it as a chance to show your worth to the business—if they see how good and reliable you are working for free, they may decide they can’t live without you, and make you an offer for a paid position
  • While working for free at a business you’re also building contacts and an important referral who may be able to help you land a paid job elsewhere
  • After completing one unpaid assignment, they may call you back again—for pay!
  • By troubleshooting at one business, you can start doing the same at others on a paid basis; as you build “clients” you’re beginning to develop your own business—self-employment could be the ultimate solution to your career problem.

Working for free won’t be easy, but is a chance to start making things happen, and that’s what you need to do when you’ve been out of work for a long time.

Have you gone through a very long unemployment? What did you do to get back into a job?

photo credit: FreeDigitalPhotos.net

Filed Under: Career, Workplace Tagged With: economy, economy of the united states, job search, small businesses, unemployment, volunteer

Social Welfare Program Payments Account For Over One Third Of U.S. Wages!

By //  by Khaleef Crumbley

According to a recent article by CNBC, various government welfare payments account for more than a third of all salaries and wages across the entire population of the United States! That is an amazing statistic when you stop to think about it what a social welfare program really is.

Welfare Payments Gone Wild

Now, when I speak of welfare payments, I am not just referring to payments made to the poor. Social Security, Medicare, and another popular social welfare program – unemployment – are all included! Here is what the article had to say about the numbers:

Even as the economy has recovered, social welfare benefits make up 35 percent of wages and salaries this year, up from 21 percent in 2000 and 10 percent in 1960, according to TrimTabs Investment Research using Bureau of Economic Analysis data.

So 35% of total wages and salaries will be nothing more than government handouts! The fact that this number was only 10% just a mere 40 years ago should alarm many!

What this means is that if you are in a room with 99 other people (say at a supermarket), 35 of them would completely rely on a social welfare program for their wages! There is no way that this nation can continue to function in this state for much longer!

“The U.S. economy has become alarmingly dependent on government stimulus,” said Madeline Schnapp, director of Macroeconomic Research at TrimTabs, in a note to clients.

Instead of being a nation of people who worked as hard as we could in order to support ourselves, and making sacrifices whenever needed, we are now people who depend on the government to support us, without any real effort on our part! I would say that we are not just dependent on government support, but we actually feel entitled to it.

Now, obviously Social Security is different because most of the people who are collecting benefits are retired and are receiving income based on contributions they made while working. The system is set up so that current workers support those who are retired, so this assessment doesn’t really apply to them.

A Social Welfare Program In Trouble

Even though I stated that Social Security should be seen in a different light than the other welfare payments, the thought of it should immediately bring to mind all of the baby boomers that plan to retire within the next decade or so!

Many people are simply not prepared for retirement, which means that they will depend even more heavily on Social Security to support even the most basic needs. Whether you are a baby boomer or not, take a look at the current IRA contribution limits and 401k contribution limits, and prepare yourself for retirement!

One of the proposed ways to fix this problem has been to reduce either Social Security or Medicare…or both! Unfortunately, most people are blindly hoping for another way…

A Wall Street Journal/NBC News poll released last week showed that  less than a quarter of Americans supported making cuts to Social Security or Medicare in order to reign in the mounting budget deficit.

Those poll numbers may be skewed by a demographic shift the likes of which the nation has never seen. Only this year has the first round of baby boomers begun collecting Medicare benefits—and here comes 78 million more.

So, we are already at 35% of the population receiving welfare payments, and now we are expecting about 78 million more retired baby boomers!?!? I honestly don’t know if there is anything that can be done to turn this around – unless we make some major changes to how our economy functions!

Most people are aware of the fact that we won’t collect enough in Social Security taxes to cover outgoing benefits in the future (and the current payroll tax holiday sure isn’t helping)! Here is how the article summarizes our current crisis:

Social welfare benefits have increased by $514 billion over the last two years, according to TrimTabs figures, in part because of measures implemented to fight the financial crisis. Government spending normally takes on a larger part of the spending pie during economic calamities but how can the country change this make-up with the root of the crisis (housing) still on shaky ground, benchmark interest rates already cut to zero, and a demographic shift that calls for an increase in subsidies?

That’s the key question! Not only will we have a huge surge in the amount of retirees looking for government benefits, but because of the tremendously weak (and it will weaken more in the future) housing market, high unemployment and underemployment, and increasing public healthcare costs, we will surely face an unprecedented amount of citizens looking for complete government support!

Unfortunately, most politicians are only interested in the short term, so the future looks pretty bleak! What’s even worse is that many of the developed nations are facing the same problem! Here is another quote from the article:

At the very least, we can take solace in the fact that we’re not quite at the state welfare levels of Europe. In the U.K., social welfare benefits make up 44 percent of wages and salaries, according to TrimTabs’ Schnapp.

“No matter how bad the situation is in the US, we stand far better on these issues (debt, demographics, entrepreneurship) than other countries,” said Steve Cortes of Veracruz Research. “On a relative basis, America remains the world leader and, as such, will also remain the world’s reserve currency.”

If we existed in a vacuum, then maybe we could feel good about our nightmare not being as scary as others. However, since many of the world economies are so connected, this means trouble for the entire world population! So while we are focusing only on ourselves – thinking about various credit card benefits, finding a cosigner for our loans, and identity theft – the economy could very well be crumbling before our eyes.

photo by renjith krishnan

Join The Discussion:

  1. Are you shocked that 35% of all wages are based on payments from a social welfare program?

  2. Do you think that there should be a limit to these welfare payments?

  3. Do you find comfort in the fact that other nations are doing worse?

  4. How do you think we can return to being a nation full of people who support themselves?

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Filed Under: Economics Tagged With: federal insurance contributions act tax, goldberg v. kelly, government, government welfare, labor, medicare, payments, personal responsibility, politics, social issues, social security, social security debate, social security tax, social welfare, social welfare program, socioeconomics, the economy, unemployment, wages, welfare, welfare economics, welfare payments, welfare state

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