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Ideas for a w2 backup plan
Old 02-12-2014, 12:05 PM   #1
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Ideas for a w2 backup plan

After my somewhat recent divorce no longer having the safety net of a second income I'm often stressed out about my job; there's the house mortgage the kid's college, ER etc. I keep doing the mental exercise as to what I would do if I lost my job. Sure I can cut back on a few things and do have emergency funds and unemployment but that's not sustainable longer term and affects my ER goals/funds. Finding a replacement job is also going to be tough because I'm in middle management (IT) and looking around haven't seen a whole lot of similar positions out there

I used to be hands-on technical about 10years ago so I could brush up on those skills, learn a few new ones and roll up my sleeves but it's easier said than done with the work-experience gap. I could try some odd jobs too I suppose. However, I was hoping I could find something I could start doing on the side now that doesn't require a huge time commitment but can sort of sow the seeds for later. I was even looking at dividend paying stocks (GE, Coke, McDonalds etc) in my taxable account (currently in VTSAX) which requires a huge capital (less diversification) to replace even 50% of my current income. I guess the old adage 'it's easier to conserve than produce' really hits home and I realize how lucky I've been with the well paying job.

Anyway, just thought I'd pose the question to the smarter more intelligent audience here and see if you guys have some out of the box thoughts.
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Old 02-12-2014, 12:18 PM   #2
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Before I achieved FI, I always had a series of backup plans for such an eventuality. I kept a fat emergency fund, big untapped credit card lines, as large an untapped HELOC as I could get, and tried to come up with as many plan Bs for a job/income generation as I could manage. I also knew that if push came to shove I could sell the house and move to a much lower cost of living area to survive on reduced income. Honestly, I never had time to figure out other sources of side income, but they are out there and it seems like I trip across a lot of them now that I am free of the job.
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Old 02-12-2014, 01:02 PM   #3
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Those are all good suggestions and I too will be able to 'borrow' money from the credit-cards, HELOC etc. However, I would feel much better if I could "generate" income. I'm interested in hearing about some of those sources of side-incomes that you said you come across. I figure even if it generates only a portion of my current income that's far better than nothing for e.g. during my mental exercise I realized I could rent out a room in my house which would bring home $500-600/mo (or $6-7k per year). It's a very small portion of my current w2 income but doesn't take a whole lot to do either and will definitely slow down the drain on the emergency funds.
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Old 02-12-2014, 01:17 PM   #4
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There is contract work out there, temping, I have experimented with publishing some pieces for pay online, I have fooled around with reselling a commodity at a profit. Look around, it is out there.
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Old 02-12-2014, 02:29 PM   #5
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Quote:
Originally Posted by dvalley View Post
I used to be hands-on technical about 10years ago so I could brush up on those skills, learn a few new ones and roll up my sleeves but it's easier said than done with the work-experience gap.
^^^^^^ This is what I did after a being a stay at home mom with a work gap. There is a book called Hacking Your Education that you might find useful if you decide to pursue this avenue. Also I spent a lot of time hanging out on forums where the other members already had careers like I wanted to have, and many of them were very kind and generous with their time.

The fatwallet and flytertalk forums have lots of ideas that can generate a little extra, easy side income. I do the ones that have a high ROI on my time. I just collected ~$1K in Black Friday sign up bonuses and referral fees for a few hours of work.

For college I would recommend studying the financial aid how to books and sites now. My husband initially thought I was wasting my time but the FAFSA only looks at certain areas and not others. Like you can have a business with up to 100 employees and it isn't counted for financial aid purposes.
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Old 02-12-2014, 04:21 PM   #6
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Thanks for sharing DLDS, I'll check out the book it sounds interesting.

What exactly do/did you do for the Black Friday bonuses and referrals?
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Old 02-12-2014, 05:47 PM   #7
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Hi,

I had a different objective to yours but a while ago did 2 things which may or may not be helpful.

(1) Cruised Craigslist for stuff I could do. One of these (Excel) opportunities turned into a significant amount of consulting (although was very lumpy as I was an overflow resource) then and quite an interesting full-time job offer. If I could code better, I would work offer services to startups. Companies might like you to manage offshore IT resources

(2) Rehabbed single family homes - these are currently too leveraged to provide good income now but they are building equity and require no cash.

I have a couple of large HELOCs at zero balance and could sell a house if I was in long term trouble.
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Old 02-12-2014, 06:40 PM   #8
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dvalley, I think what some of us are saying in a roundabout way is that we depend largely on our balance sheet to bail us out when the income statement goes to pot.
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Old 02-12-2014, 06:45 PM   #9
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Thanks for sharing DLDS, I'll check out the book it sounds interesting.

What exactly do/did you do for the Black Friday bonuses and referrals?
Capital One / Sharebuilder had Black Friday bonus offers for opening various accounts for $75 - $150 each, plus referral bonuses. I opened what I was still eligible for and then referred my husband and kids. The ~$1K was our family total.

On the job front, I think if you are a good programmer you can really learn almost any new language or technical skill. It helps to look for something high demand that hasn't been around for too long. Then you aren't competing with other job candidates with significantly more experience.
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Old 02-13-2014, 12:17 AM   #10
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Thanks everyone the wheels in my head are turning

@brewer, I totally get it, thank you. Luckily I could probably live off of my balance sheet for one year if stuff hits the fan but it will put a nice dent into my ER plans hence the interest in a side income stream.

Quote:
Originally Posted by daylatedollarshort View Post
Capital One / Sharebuilder had Black Friday bonus offers for opening various accounts for $75 - $150 each, plus referral bonuses. I opened what I was still eligible for and then referred my husband and kids. The ~$1K was our family total.

On the job front, I think if you are a good programmer you can really learn almost any new language or technical skill. It helps to look for something high demand that hasn't been around for too long. Then you aren't competing with other job candidates with significantly more experience.
Thanks for the clarification!

And boy do I agree with your statement about something new and something in demand. It's amazing what IT has become since when I graduated with a degree in computer science. All the money generating schemes people came up with in the name of 'certifications', 'compliance' and 'methodologies' like Scrum, ITIL, PMP etc. I've done (and used to be at the top of my game) everything from unix/windows systems administration to network administration to spinning up ISPs and plenty of software development back in my hay day but now each of those require you to have certifications. Back in my day you only needed certifications if your background or education was lacking. Now it's pretty much a must have, at least in the mega corp env. I feel back in my day we got more work done and less meetings/roadblocks/change-controls/processes etc.
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Old 02-13-2014, 01:20 AM   #11
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Quote:
Originally Posted by dvalley View Post
After my somewhat recent divorce no longer having the safety net of a second income I'm often stressed out about my job; there's the house mortgage the kid's college, ER etc. I keep doing the mental exercise as to what I would do if I lost my job. Sure I can cut back on a few things and do have emergency funds and unemployment but that's not sustainable longer term and affects my ER goals/funds. Finding a replacement job is also going to be tough because I'm in middle management (IT) and looking around haven't seen a whole lot of similar positions out there

I used to be hands-on technical about 10years ago so I could brush up on those skills, learn a few new ones and roll up my sleeves but it's easier said than done with the work-experience gap. I could try some odd jobs too I suppose. However, I was hoping I could find something I could start doing on the side now that doesn't require a huge time commitment but can sort of sow the seeds for later. I was even looking at dividend paying stocks (GE, Coke, McDonalds etc) in my taxable account (currently in VTSAX) which requires a huge capital (less diversification) to replace even 50% of my current income. I guess the old adage 'it's easier to conserve than produce' really hits home and I realize how lucky I've been with the well paying job.

Anyway, just thought I'd pose the question to the smarter more intelligent audience here and see if you guys have some out of the box thoughts.
Did I write this? Is this me (cept for the wife & divorce). I've been that same headspace for years, doubling or tripling in intensity once job fears began to creep up 18 months ago. It's been stressful, not so happy, and occasionally dark. I've always been keenly aware of my place in society as a debt repayment machine. Does having a wife take all of that away for people?

On the plus side, I've gotten "real" with my finances, changed my whole financial life to be LBYM (80% there), found this forum, Bogleheads, and tools like Mint & Personal Capital. Bolstered my emergency fund. Thought through disaster plans A,B,C,D, and again until they weren't scary anymore.

I'm also somewhere in middle management. High pressure, high stress. Technology changes made my once hot skillset less than over the past two years. Thankfully I've never gotten completely away from the hands-on stuff, so it hasn't been terrible to adapt. And my leadership will be maintained instead of supplanted by another group who were first to adapt, but operate at a lower performance level overall, which began to be a risk for a while.

I have a love/hate with my job. When it's good, it's great. When it's bad, it's vile, nasty, generally soul-sucking. I spend a lot of time wondering just how green the other grass is, or if it is the same shade somewhere else. Jobs like mine aren't very common. And if I did find one, would the organization be any less broken? Politics less intense? People less crazy? Clients less demanding?

I don't have the answers, but I can tell you I feel better having my house in order (finances, skills, and getting comfortable with all the what-ifs). If your work is the type I think it is, spend some time online learning, I'm sure there are tons of resources. Then go take a couple of small contract jobs to see how you go.
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