Are you running scared of the market right now? It seems like the whole market went to hell yesterday in a handbasket. The Dow dropped 504 points yesterday. And it ain’t over yet. Yesterday the drop in the market was due to the Lehman Brothers failing and declaring bankruptcy. While Merrill Lynch is in serious trouble and being bailed out by Bank of America. Sounds bad right?
Well it got worse this morning. AIG, a major insurance company is in trouble as well. The insurance giant could be facing bankruptcy if they aren’t able to raise cash to meet their obligations. They are a massive employer and one of the largest insurance companies in the US. So where are we heading?
I have no idea, but in one of the articles a older broker from Lehman put into words how I feel “It’s one thing to lose your shirt, it’s another to lose your job”.
I don’t know how readers are nearing retirement or retired, but hopefully you aren’t in the same situation as someone in their 20s and 30s. Right now I know from a younger person’s perspective we’re worried. We have student loans, mortgage, childcare, car loans, etc. Even living frugally, there aren’t many who are under 30 with paid off mortgages. Many still rent actually because it’s cheaper.
Problem? We have bills to pay that can’t be covered by our meager savings. I know I speak for the majority of Generation Xer that we’re trying to save but the noose feels tight. Right now more important than the stock market, is we keep our jobs. We’re young and starting out, we need to stay employed.
Our investments can be resaved and built back up, but without a job, what can we do? My number 1 tip during this recession has been, KEEP YOUR JOB. You can’t save if you have no income. You can’t live if you have no income. Sure it’s nice to live without debt, but even without debt you can’t live without income.
Now is not the time to be unemployed. Once unemployed I think everyone will get caught in a downward spiral and quickly lose control of their finances. Now is the time to just tread water and live within our means and try to get out alive.
That’s what we’re doing. Yes our investments are down, but we don’t care and barely notice. Sure I haven’t broken my 6 figures mark of investing though we’ve contributed more than that. But I’m still employed. I still have the ability to save and to survive. I’m fortunate and I know it.
So my one blessings are health, a job, and family. Right now not much, but better than all the employees of Merrill Lynch, Lehman Brothers, and now AIG. Sure I should be running scared from the market, but right now all I can focus on being a valuable employee and keeping my job.
What do you think? Is it time to panic? Or are you too busy keeping your job, watching your grocery and gas costs to really care?
12 responses so far ↓
1 Kristy // Sep 16, 2008 at 11:35 am
No we are not panicing, though long term this may affect my job. We are still buying, in fact buying stocks low. Hopefully it will pay off in the long term. We are watching spending so that we can invest more in the market while its low.
2 tom // Sep 16, 2008 at 12:30 pm
We are just riding it out. I am trying to work hard enough to show my superiors that I am a vital asset to the company, which is not so much affected by the current market.
In the meantime, I continue to invest in my 401(k) and our Roth IRAs as everything in the market is on sale!
The economy sucks right now, but isn’t that why we read PF blogs and prepare for such a situation?
3 LivingAlmostLarge // Sep 16, 2008 at 1:27 pm
The other truth is that even if you are self-employed you are still answerable to your clients. Meaning if they are suffering you won’t be hired as much. So self-employment is great, but hopefully you have clientele doing well.
4 thinkingabout it // Sep 16, 2008 at 2:38 pm
My 403b retirement account is through AIG (No not their stupid annuities!). I’m reading of talk of one branch of AIG bailing out other branches. Can I dare to think that money held in retirement investments there might borrowed by the defaulting branches? Yarrr! I do not know from whom AIG would have to get “permission” to do that, but it should be from me and fellow investors!
5 Julie // Sep 16, 2008 at 5:07 pm
I just hope that everyone who works for them comes out okay. It’s scary to see financial institutions struggling, but I’m uplifted that the bank I work with is succeeding, and has a business plan that fits with the future. ShoreBank was founded 35 years ago in Chicago by people who believed that a commercial bank could restore neighborhood economies, and it’s this solid business plan and commitment to the environment which has led to success. For more, visit this link: http://shorebankdirect.sbk.com/about-shorebank.html
6 fengshui // Sep 16, 2008 at 9:47 pm
Now the feds are going to bail out AIG. $85 billion. (loan). What a bargain! Do we really have $85 billion? Where are we getting all of this money to bail out corporations? The defecit keeps getting bigger and bigger and that scares me. I do feel so very fortunate that as a health care professional, my job is very secure, I have no worries. My hubby works for his family and their business is booming so no worries there. However, we do not have nearly the emergency fund that we need. We need to save more, that is for sure.
7 Kim A. // Sep 17, 2008 at 8:29 am
I can offer what I did. At 40, after raising my kids, weathering a divorce and approaching a new decade in my life, I took a good look at my skills (minimal) and my education (quit college at 20). I decided it was now or never. I enrolled in the local community college. Anyone can do this. It is affordable, Pell Grants cover most of the cost of books and tuition for those who qualify, and you can take as many or as few hours as your schedule allows. My degree allowed me to transfer to a state college as a junior and I am now finishing my degree online. I didn’t like where I was heading at 40 so I took a big leap and worked hard. I am now better prepared to compete for precious jobs and set a good example for my kids. It wasn’t easy and it didn’t happen overnite but I was moving forward and I was worth every penny!
8 DiaryofaDINK // Sep 17, 2008 at 8:48 am
While now is the time to keep your job, many times that’s outside your control (Covey philosophy). If you can’t keep your job, seek out a recession proof job because there’s plenty of fields needing workers and becoming an nursing aide or teaching assistant can at least make ends meet in the meantime if you’re inclined to look at two areas that always have a shortage.
On the other hand, cutting back on one’s expenses to a “survive and thrive” level allows you to reduce your income needs and that IS in your control. Not biting off more than you can chew and not living paycheck to paycheck is vital in times of uncertainty like these.
9 LivingAlmostLarge // Sep 17, 2008 at 1:06 pm
Not necessarily. It depends, if it makes you unhappy why do a job you hate? There is always work if you want, but going back to school for a “Recession” proof job you don’t like doesn’t make sense.
I would not want to be a nurse because it’s a lot of work and pain and involvement.
But to make ends meet I would be willing to wait tables again, work retail, clean homes, etc. So there are jobs, but it depends on if you are willing to do it.
Expenses will naturally be cut when you lose your job. But perhaps it would be awesome to not lose it.
Also by working harder, you can keep good references and potentially network to find another job faster than if you weren’t the best worked.
10 fengshui // Sep 17, 2008 at 2:14 pm
“I would not want to be a nurse because it’s a lot of work and pain and involvement”
Remember, being a nurse isn’t limited to just scrambling in a hospital, lifting and transferring patients, etc. There are many nurses who work in an office, M-F, 9-5, etc. That is what I LOVE about nursing! So many different areas you can work in.
I think that poster was referring to a nurses aid, where you don’t earn a degree, just a quick 8 week course at a tech college and you can usually find a job making decent money, at least $12 an hour and up to $18 an hour in some areas. In a “pinch” it could keep one afloat financially, and you get benefits too.
11 Angie // Sep 18, 2008 at 5:03 pm
I’m not running scared of the market at all right now. In fact, just yesterday DH and I upped our 401(k) contributions another 2% of his paycheck. His job is relatively secure, we have a decent emergency fund, and I’m a SAHM who has actually turned down job offers over the last year. We’re in our mid 30s and have lots of time for the market to bounce back, so we figure that now is the time to buy while prices are low.
Welcome to the Finance Fiesta, buzzer-beater edition | Mighty Bargain Hunter - Sep 25, 2008
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