How to beat unemployment in 4 easy steps This is a guest post by Tony It doesn’t take an SHTF event for you to need your preparations. In fact, there is another danger looming over the heads of many in America that could drastically change their lives on any given day. That is unemployment. Fourteen million people are officially unemployed now, millions more only able to find part-time employment, and many millions more worrying all the time when they will lose their jobs too. In today’s economic environment, unemployment could hit any of us at any time, but it doesn’t have to be the end of the world. In fact, it won’t even be painful at all if you have properly prepared. The economy and unemployment The U.S. economy took a serious downturn at the end of 2007 which quickly became what I call the Great Recession. The housing market crashed, unemployment spiked upward, many businesses failed, and the entire economy contracted. Government stimulus spending, Federal Reserve dollar-weakening initiatives, and huge bailout packages have left us with more government debt than ever in history while doing nothing to jumpstart the economy as advertised to do. According to experts, this recession ended in June 2009 when economic activity hit bottom and anemic growth began. Big businesses in this country have, for the most part, regained profitability with some posting huge gains, but this has largely been accomplished through government assistance and reduction of expenses by laying off workers. For most individuals, especially those who are out of work, the recession lingers. President Obama assured the nation that if Congress would pass his stimulus package that unemployment could be kept under 8 percent. They did pass it and almost immediately unemployment rose above 9 percent. It has only been below 9 percent for one month any time since then. By the official count, about 14 million people are unemployed. However, since the federal government’s accounting methodology only includes people who have actively sought employment during the last four weeks, those who have given up on finding a job, are under-employed, are have been forced to take part-time jobs just to try to make ends meet are not even counted. This means the real number of people unemployed is actually over 20 million, something in the neighborhood of a 15% unemployment rate. Why unemployment won’t go down Unfortunately, I don’t believe unemployment will go down in the foreseeable future for several reasons. First, with a slight reduction in Japan’s taxes, the United States now has the highest corporate income tax rate of any nation in the developed world. These taxes, along with excessive regulation and outright direct interference in private business make it very expensive for businesses to expand and hire employees in this country. Fewer people working means less spending, which further disincentives companies from hiring. The second problem is outsourcing. Due to the government influences discussed above, many companies have moved entire operations overseas where it is cheaper to operate and produce larger profits. Even when companies don’t completely move offshore, many are outsourcing aspects of their business to other countries where labor is much cheaper. With our high cost of living, there simply is no pool of cheap labor available in this country. Finally, while technology has done much to improve our standard of living, it has also reduced the labor necessary in many sectors of business. Companies are now able to produce more than they could a few years ago even with fewer people. Those jobs lost are not coming back. This all works together to create permanently high unemployment. Anyone could be at risk of losing their job, but this doesn’t have to be bad news. Let’s look at where our money really goes and what we can do about it. The big expenses Upon careful analysis of monthly expenditures, most people will find that the vast majority of their money, usually 75% or more, goes to only three or four big expenses. The mortgage payment or rent is by far the largest monthly expense for most people. Food, between groceries and eating out, is usually the next largest expense. On average, a family of four spends about $950 on groceries every month. This one is hard for many people to visualize because it is split between a number of trips to stores instead of just one big check going out each month. Car payments for one or more cars can cost as much as groceries. Finally, for some credit card debt rounds out the top four big expenses. The solution If you can simply get rid of those four big expenses, you can live on very little money. You can live on so little money, in fact, that you no longer need a job. Sound crazy? Read on for my four step plan for how to do this. The plan to beat unemployment 1. Get mortgage-free. You could do this by just paying your mortgage payment every month of 30 years if you can resist the urge to refinance and keep paying for a long time, but it will take 30 years to get there. In today’s uncertain economic environment, that’s pretty risky. A better option, from the preparation perspective, is to find a much cheaper alternative so you can pay for it quickly and then get rid of the mortgage ball and chain. First, you have to find cheap land. Fortunately, land that is well-suited for self-sufficient living is frequently less than desirable to the masses, so it will cost less. There is actually a huge supply of very cheap land available in this country. A quick search of the companies which specialize in rural land such as landwatch or United Country will yield a large listing of three to five acre parcels for $20,000 and less. You’ll even find many for under $10k. At these prices, you can take out only a small loan which can be repaid quickly or even save up your money and buy without a loan. Next you have to build a house on the land. Since approximately half the cost of construction goes to labor and the contractor’s profit, you can save significantly by building your own house. The smaller you build, the less it will cost. Using alternative methods such as cordwood masonry or strawbale construction or building a yurt can cut costs even further. You could also buy land with a fixer-upper house and refurbish it yourself to save big. Finally, you don’t even have to have a house. You could opt for an older mobile home or travel trailer to get the cost of housing down to just a couple thousand dollars. That’s only one or two mortgage payments for most people. Even though many people have lived in trailers for many years, I still recommend using this as a temporary solution and eventually building a house when you can do it without going into debt. 2. Grow your own food. It doesn’t take nearly as much land as you might think to be self-sufficient. You can grow all the fruit and vegetables that an average family will need on a half acre or less, though it does take careful planning and a lot of work. You can easily add chickens for eggs and meat. Other small livestock such as rabbits and goats also take very little space and goats can provide milk as well as meat. If you want to keep a cow, this is where the land requirements grow, but even so, you can keep one and raise her calf for meat each year on less than five acres. With a milk cow or goat you can produce your own milk, butter, cheese, and yogurt. There are still a few items such as flour, sugar, and coffee that you probably will not be able to produce. 3. Dump your car payment. If you buy a new car, you are giving up several hundred dollars every month. With two cars, as most families have, you could be shelling out over a thousand dollars a month. Buying cars a couple of years old will save a lot of money, but you will probably still have to finance the car. If you are willing to go with a car that is a few years old, you can buy a dependable used car for about $5000, pay for it with a much shorter loan, and still have a lower monthly payment. This will allow you to quickly escape the car payment altogether. An even better option is to save up money and buy the car without ever taking out a loan. If you are ready to take the slightly more radical step, buy a $1000 car. This might sound risky, but there are a number of ten to fifteen year old cars out there which can be bought from private owners at around a thousand dollars that are still very reliable and have many miles left in them. 4. Reduce other expenses. For most people this means pay off your credit cards. A good way to approach this is to pay only the minimum payment on all but the one with the smallest balance. Pay as much as you possibly can on that one. When you get it paid off, add the amount you were paying on it to the next lowest balance each month. Keep doing this until you get them all paid off. Start a cottage industry to make money. Even after you take all the actions above, you will still need money for taxes, gas, insurance, the food items you can’t produce for yourself, and a few other expenses. This will be really small compared to what you were paying with the expenses above included, but you still need money nonetheless. There are any number of things you can do from home to make money. I recommend using several of these strategies at the same time so you don’t have to make as much from any source and if one stream dries up you still have others. Some examples of things you can do to make money include selling on eBay or Craigslist, lawn care, handyman service, errand service, and selling at farmers markets, flea markets or craft fairs. Online you can make money by selling a product, advertising income if you have a large enough audience, or writing (textbroker and similar companies). Of course, these are just examples intended to provoke thought. There are countless other ways you can make money, especially when you only need to make a few thousand dollars a year. Flexibility This is a flexible plan. First, the steps do not have to be completed in the order listed. They can really be done in any order. You may not wish to complete every step, but doing any of these things will improve your financial situation and make you more prepared if you do face unemployment. Finally, even if you do complete all steps, that doesn’t mean you necessarily need to quit your job. If you want to, then you will be in a position where you can. If you want to keep working, you will just continue to improve your level of preparation.
Posted on: Sat, 13 Jul 2013 16:33:00 +0000
Trending Topics
Recently Viewed Topics
© 2015