I don’t relish what is coming. I’ve prepared for it now for a few years, and because of this, feel “mostly” prepared. I think this cycle I might be ok, but you never know in the tech field. I mention this because it’s the first recession coming since 2008. We are *currently* in one, but no one seems to agree on definitions of anything anymore, so let me just tell you that job losses are coming. Make of that as you may.
I have experienced 3 job losses – 2 of which were directly related to timing of significantly bad economic times. In 2002, I lost by job at the end of the dotcom bubble, and at the end 2008, as the global financial crisis was coming. In the first, I was unemployed for 15 months. In the second, I was unemployed for 3 weeks. In the 3rd, 4 days. I wanted to write out some lessons learned from my experiences to help prevent others from dealing with the pain and suffering I did in 2002-2003.
Yesterday, someone reached out to write an article about this and get quotes or lessons from guys like me who lost their jobs in the dotcom bust. I sent the below – and am adding a little to some of it here. I think he has a great story in progress, so I’ll wait a few days before I share this on Twitter as I don’t want to “scoop” him, but I wanted to share my thoughts for my readers and anyone else who stumbles across this.
1) 6 months of bills on hand – my finance professor in grad school said ‘always keep 6 months of bills in the bank as an FU fund’. The idea was that if you were an accountant and someone asked you to do something unethical, you could walk no questions asked. Best advice I ever had as it makes taking on a new job less risky if it’s a terrible fit. Additionally, in the tech world, you never know when job cuts are coming, so it makes it a ton easier. Years ago there might have been “severance” with companies, but for 23 or so of my 27 years in IT, I have worked for contract companies. Severance isn’t part of that. You have to hold your own severance money. If you DO lose your job, you obviously need to live extremely conservatively.
2) live below your means. My wife and I fight about money all the time. If I don’t have the money in funds that are meant for spending, I have to have that fight daily over not buying stupid shit. Because I have gone through hard, hard times for that 15 months, I am sort of scarred from it. I have about 1-2 years of food here stored up, and between my trading account and other things, have about 2 years of bills. But I’m 46 and need to continue to aggressively save for retirement, so you should not give a shit if your friends buy new cars and have a $1500 per month car payment. I have a 2018 used RAM 1500 for $400 per month. Can I afford a high end Mercedes on my pay with monthly payments? Yes! Do I think it’s a good idea? No. Why? I’m married with kids, who the fuck am I trying to impress. My neighbor? I get if you are 25 and need to flash a little to be attractive in your eyes, but that doesn’t mean shit to anyone you want to marry.
3) Do not take on credit card debt. When possible, pay off all credit cards at the end of the month. Do not put something on a credit card you cannot hold at the end of the month. Over COVID, I did take on CC debt and am working to pay this down by summer 2023. A lot of this was used to fix up my basement for a play space for my 2 year old. Had I had someone come in and do it, it would have been maybe $40k. I did it over a year or so for maybe $15k. Now the bill is due.
3) Updated resume. Always, always keep your resume updated and available for work. You may not be actively looking, but if you hear rumors or bad news, you can pivot quickly. The worry is your boss finds out you have your resume out there. I’m very, very open about this with people. I always keep my resume updated – as companies today have no severance and I need to always be proactively looking at what companies in my region are hiring for what positions. It’s not ACTIVELY looking, it’s passively looking. And, if you have a family, I’d expect you to do the same. I advise all of my employees to do the same too – if I don’t treat them right, they are more than welcome to go and work for one of the nightmare bosses I worked for in my life.
4) Buy a house below your means. You may ‘qualify’ for a $700,000 house, but everyone in the mortgage industry food chain benefits off of you taking out more. From the loan officers to the realtors to the people who get their beaks wet.
5) Buy a house with extra bedrooms. When I bought my house in 2007 I was worried about another crash. It was a 5BR home in the city. I rented out half to a friend and it helped me a ton. Eventually I moved out in 2014 and have rented it out through a prop mgr ever since for extra income. But now I have a total of about 16 bedrooms of space between the houses I own – and this is important for me due to Great Depression fears. No one in my family would go without a bed and roof over their head. My 95 year old grandmother lived through the depression and her and my grandfather built a 3 BR apartment over a 2 car garage on their property and rented it out their whole lives, which paid their mortgage off. I know own those properties and they will pay my mortgages off in a few years. I’m always prepared for a bad week in the stock market. Don’t live doom and gloom, but be ready for it.
6) Upskill. Always get more skills. In 2002, I had a bachelors and entry level certs with 1 year of an mba. Losing work for 15 months drove me to get 2 graduate degrees and 11 industry certs. From 1995-1999 I was a tech, and with my bachelor’s degree was promoted to the management team to be a metrics guy for our contract. When I lost my job in 2002, my skills had not kept up with the industry. I was so focused on being management, I let the tech part go. When I had to re-start in the mailroom in 2004-ish, I then took every opportunity to learn more and more tech – having then worked a lot with server rooms, AD, scripting, and SMS – later SCCM. This led to me hardening systems at the enterprise level in the field of cybersecurity before any of you heard about it. When I lost my job in 2008, I was paid 4 months severance and got a job in a few weeks for Lockheed doing the same thing. If you have tech skills that are current, you will ALWAYS be able to be hired. I’ve been a manager now going on 9 years and still have my admin credentials and pitch in on projects I like that are tier 4 types of things that require a lot of design/engineering to build. If I lose my job as a manager today, I could get hired as an IT architect tomorrow. I get 3-5 calls a day from recruiters for probably the past decade.
7) Never take a day of work for granted. Ever. After my unemployment ran out at a year and I blew through my savings – family members were telling me to apply as a Walmart greeter. It was humiliating coming from where I was – they meant well, but it stung. When you do get a job again, be the “garbage man of IT” – a title I called doing the jobs no one in IT wanted. Fix the dumpster fire, document it, train others to do it, and seek out the next dumpster fire. Management sees these people as indispensable because they get shit done.
8) never burn a bridge. Ever. Put in 2 weeks notice when you leave, THREE if possible. THANK people for your opportunity, even if you have to grit your teeth doing so. You never know when you may run into others again from a previous job.
9) live in an area between multiple metro areas. It helps you keep a lot of options open in multiple cities. Try not to live IN a city, but go for much more affordable options further out. In my personal example here, I moved to York, PA 20 years ago and live in the York area, surrounded by Harrisburg, Lancaster, and Baltimore. This is good for regional IT work. But I now luckily work in the defense industry, and with that, I should have lived in Timonium, MD – between Aberdeen, DC metro, Meade, Baltimore, Detrick, and New Cumberland all within an hour. You do not want to be tied to one market – I had lived in the West suburbs of Philly – and my market was ALL to the east, by going through TERRIBLE traffic.
10) try to find work in bulletproof industries. I work in the defense industry. No industry is bulletproof but some are more volatile than others. I live in a reality in year to year chunks of time, with contract renewals. I am NEVER safe, but usually after the renewals I’m good for another year. It keeps you hungry. But – some industries like manufacturing may have 5% margins and when recessions hit, IT is one of the first places they cut.
11) Step back. you may have to take a few steps back to take more steps forward. Your dream job of $200k at 23 may never happen again. Ever. You need to perhaps mourn the reality of avocado toast from the company cafeteria at 10AM after your game of pool with your manager. Many of these tech firms competed against each other for the same workers. Industry may do a ‘hard’ reset, and with this, there will be a lot fewer jobs with a LOT more techs available. “Like your job? Now take a 20% pay cut”. This is the reality of living in IT in tough times. This is why the items above are so important.
12) move. Many who are about to get torched are in Silicon Valley. The purge started. You have zero clue what kind of bubble you guys have been in for a decade. Meaning, you may make $250k now which might have the equivalent of $80k by me. Meaning – your $900k house might be the equivalent to mine at a third of the cost. People are chasing the nominal dollar amounts, not having a clue that many other regions in the country are FAR more affordable. Consider that many jobs are fully remote now, and you can relocate to a place with a $300k nice home but may $150k remote. It’s a $100k down step from your last job, but you may actually have double the living standard you did in SF. Let that sink in.
13) take a good job. If you made $100k many won’t hire you for a job that maxes out at $80k. You are a risk of leaving the second someone offers you $100k. Be mindful you may not get calls back for jobs you are overqualified for. It took me 6 years to get back to the salary I was making in 2002.
14) Pay. Talk about pay range in the first 30 seconds of a recruiter call. Ask for a range. If you aren’t getting numbers, hang up. If you like a job and the range has a 10% pay cut, take it. Many times they want to know what you make now. Not their concern. They will use whatever number you give them against you somehow. Be polite. My lessons from 2002 are that I went on like 5 interviews. Drove an hour for some. Put on a suit. Did the hour or so interview. Waited days for the phone to ring. Offered a job at $10 less an hour than I used to make. Had I known that in the first 30 seconds, I would not have done the interview or wasted everyone’s time. I do a TON of interviewing. When I interview, I always want them to interview me back to ensure it’s a good fit for them. I want them to ask me about company culture, what a day is like in that job, what the team is like, and what promotion opportunities there are down the road. If someone is not interviewing me back, I feel they don’t have a lot of interest and it’s possible they are using my position as a means of extracting more money from their current job with an offer letter.
15) Plan. Always plan your next job. I have a criterion of what I would leave my job for. You should too. I love my job. But it’s 90 mins away. Luckily, I have some telework to help that. If I could do this job 15 mins away for $10k less, I’d do it as I’d be saving on gas money and wear and tear on my car – and have a better quality of life with my family. This allows you to read the industry and choose your career rather than being directed where to go out of desperation. I currently have my dream job and do not want to leave – but I have a very, very advanced career and there are always people with dump trucks of money looking for people like me. If my current position treats me right and allows me telework, I’m happy. Take a look at Herzberg Two Factor theory. As long as “dissatisfiers” are met, many won’t leave their jobs – but if you have dissatifiers which affect your work place abilities, it’s time to find a different work place.
16) Food. My wife thinks I have food insecurity. Probably. When I lost that job in 2002, at the very end of the 15 months I was so broke I bought a case of peas and ramen and that was my food for a month. People think people get overweight from eating too much. Yes – that’s a big thing – but when you are broke, the cheapest food out there is processed shit. It puts weight on you something terrible because it doesn’t satisfy you with protein or “quality” fats. I built a pantry in this house, got a stand up fridge, and stocked it with a quarter cow of grass fed/grass finished beef ($800), a half pig ($340), and 50 pounds of chicken breasts ($100). I then went to the webstaurant store and bought hundreds of pounds of rice, beans, oatmeal, giant tubs of sauce, 100 pounds of pasta, etc. Maybe $500. Also have tons of plastic containers for food prepping. Between the freezer, shelves, containers, food, etc it was maybe $3000. But I have probably 1-2 years of food here for me and the family. IF you have credit card space, do THIS and pay $75 a month to pay down the credit card to avoid $800 a month in grocery bills for the family.
17) Diet/exercise – had I done it all over again, I would have taken that 15 months to walk, work out, run, bike, and decompress. I never knew where my next meal was coming from. I had a nice pile of savings from selling my house in 2002, but I was expecting to get a job in weeks and not over a dozen months. Rent, video games, car payments, utilities, boozing with friends, dating – it sucked down that $16k in savings in like 8 months. I would have, instead, done all of the above and spent hours a day hiking, walking, and working on ME. I was so stressed that I ate poorly, could not sleep. It was mental hell because I knew ZERO of the above.
I wrote all of this to help anyone who might be worried about job loss in 2022-2024. If you have any questions, feel free to reach out at email@example.com. I can’t get back to everyone, but I try my best on questions that are the most important.
If you do the above, you should be ok to weather this recession. The MAJOR concern here then is “depression”. If you are here due to this article, I also have a ton of writings here on gold, silver, and investing. What I have done (which is NOT investment advice) was essentially “short the dollar” with buying gold/silver/mining stocks. If we head into some worse times than a mild recession, it is possible things “collapse” – but in those situations, FEAR hits and gold is a fear trade. While it might not launch into orbit, it could protect your spending power against inflation and deflationary forces. Consider following me here and on Twitter @natefishpa.
Best wishes to all of you in the tumultuous times ahead.
November 10, 2022 at 1:28 pm
Hey Nate. Great to hear your experience and advice. I’m in IT management for a Hospital for the past 27 years. We have had layoffs/reorgs on numerous occasions, but I have managed to stay employed by the same Hospital by constantly learning new aspects of IT, and supporting new tech. I’m very much a “hands on” working supervisor, and I do all the same work (and them some) that my techs do. Not to say I’m irreplaceable–because almost everyone can be replaced—but by being versatile and always taking on new tasks and projects–sort of a “jack of all trades” IT guy, I have made myself one of the last persons on the IT team that the Hospital would probably want to get rid of. And that’s how I have stayed employed by them for 27 years, which most would agree is a rarity in IT these days.