Thursday, December 8, 2011

Retrenchment hits me

A recession is when your neighbor loses his job. A depression is when you lose yours. Depression has hit me. I have just been retrenched.

For many, retrenchment is not just economic depression. It is also emotional depression, self-worth depression and a humiliating depression. For me personally, it is even more embarrassing because I have been known to bring work home and reject invitations to go out and play over the weekend. Perhaps some people are having their last laughs now.

Retrenchment leaves a person with plenty of time to think. Don't waste the experience. He needs to be brutally honest with himself. In my case, I cannot honestly say it was mainly my fault. It was the free market at work, fair and square. I work in the Electronics industry in Singapore. Although electronic gadgets(iPhones, e-books, smartphones) are still changing our lives for the better, fellow Singaporeans who work in the same industry will know that electronics in Singapore has been on the decline for more than a decade. The big companies (foreign MNCs) are moving out, there are no big local companies to take their place and the smaller companies which usually service the big ones are dying away. It is not just high labor cost. Land (especially land), transport and energy costs also make us uncompetitive. These are infrastructural costs which the government can do their part to keep low. If these infrastructural costs are kept low, then our wages can have more room to move up without hitting our competitiveness.

If the company cannot grow, my immediate supervisor cannot be promoted. If he cannot be promoted, how can I be promoted? This time round, everyone lost their jobs including my boss. One consolation was that I got a "diligent and honest worker" in my appraisal before the retrenchment. Hopefully, this is not just a parting gift just to be nice.
 
I am tempted to lament on how unfair life is. However, this is useless to me and readers who could not care less until the same thing happens to them. Rather, it is more useful to think about the practical measures to cope with retrenchment.

The first thing that comes to mind is to cut down on all unnecessary expenses. Unnecessary expenses refer to expenses incurred beyond keeping one alive. Eat the simplest, cheapest food. As long as it fills your stomach, it is good food. Try to eat at home. Don't eat out. The rental cost in Singapore is so high, why pay for them by eating at expensive restaurants?

Entertainment expenses should be cut mercilessly. I do not subscribe to the theory that good things must come with a price. A lot of good things in life can be very cheap or even free of charge. A person can go to the library and borrow wonderful books free of charge. Get entertained and be educated free of charge. There are plenty of quality documentaries on Youtube. Again, one can get entertained and be educated free of charge. Use the spare time for learning at low or no cost.

There are certain expenses which must not be cut. This is allowance to parents and parents-in-law. The first response from parents is to cut or stop their allowance upon learning of their children's retrenchment. I have never heard of parents stop providing for their children when they are out of a job. Therefore, why should children stop providing for their parents when they become jobless? People who stop their parents' allowance are making a gross miscalculation. Their own children will do the same thing to them when they grow up. They will not feel a pang of guilt because their own parents did the same thing to their own parents. Setting a good model example to the children is the most effective and yet, least time-consuming way to educate them. Much better than spending so much time giving them tuition yourself and yelling at them. They either end up resenting you or hating the subject.

The standard advice from government help bodies is to get retraining or some educational certificate to make your resume look good. While these people have good intentions, take their advice with a pinch of salt because you know your personal situation better than them. Is your personality suitable for the type of job you are retraining for? Will employers be willing to hire you even after you have earned a certificate because of certain discriminatory practices? (Age, hiring their own kind)

I am not willing to invest in higher education to make the resume look good because the education fees is too high today and the investment returns do not look good. Too many people with higher education but are there enough jobs requiring such higher education? In fact, after spending a bomb for that piece of paper, a person may even get discriminated during job interviews because he is overqualified or the interviewer feels threatened.

Finding a job is not the only option. One can think about his personal strengths. Think about his hobbies. Can he turn them into useful products/services to sell to people? If one can successfully do this, he can be a very happy person instead of slaving for people whom he has been yearning to say "fuck off".

Quite a number of retrenched people will be thinking of investing in the financial markets to make a living. On the surface, it looks like an easy way out. Psychology plays a very important role in successful investing. Retrenched people should be self-aware of their own weakened psychology as market participants. Given the heightened volatility in the financial markets today, weak psychology can lead to bad decisions because it is easier to be tricked by the high volatility to buy high and sell low given the weaker state of mind. Investing is a fun game for me (on a part-time basis only) and I am reasonably good at controlling my losses in terrible times. But, I have to take my own advice and be self-aware of my new deficiency from now on.

46 comments:

  1. My sympathy goes to you. I don't know how it feels to be retrenched. Nevertheless there is always hope and a better tomorrow! Maybe just maybe you can have a mid-life switch of career into teaching profession, lecturer,etc. Just stay positive and best of luck!

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  2. Hello hyom,

    I used to work in merchandising (buyer) at Montgomery Ward Trading. Merchandising was considered a "sunset" industry in Singapore 15 years ago too... Most of the Singapore garment and furniture factories have relocated to our neighbouring countries...

    It was the same in HK. When I visited factories in Dong Guang, China, many of the managers or technicians were Hong Kongers - they have relocated there. HK have no manufacturing sector now...

    I can say the same for Taiwanese working in Xiamen.

    Just sharing that if you have no wish to switch industry/career, one option is to explore if you are willing to "relocate" to be a "foreign talent" somewhere else.

    I see you are married. So it will have to be a family decision. It was easier for me as I am single.

    I've been there. Although I jumped ship before being retrenched at Montgomery Ward.

    All the best from a non-vested friend from valuebuddies - Jared

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  3. Thanks Koh and Jared for the suggestions and encouragement. The future for me is uncertain now. I have to think carefully on my options now. Important thing is not to waste time and remain productive during this period of "idleness".

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  4. Please take care. Take it is as the perfect time to take a step back and see things more carefully ^^

    Derrick

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  5. hi, don't fret! i like your blog as where to get the better bargain for banks and credit cards. there is a saying " bad times won't last and good times will come!" cheer up!:)

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  6. Hi bro i'm a fan of your blog. Please cont to contribute and gives us more advice. May you be strong and strive better ahead.

    Thanks.

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  7. I like your conclusion- the importance of being aware of one's weakened 'psychology' before venturing into the stock market. Perhaps you can spend more time learning about the stock market like TA?

    All the best. This is a great time to reflect and use your hobby as a skill.

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  8. Oh no... so that fateful day has finally come, my friend. Wish you all the best and that it means nothing but just a new phase of life to you!
    I share the same sentiments, and can't agree more with you about the weakened mentality that you mentioned. I have been actively trading / investing since 2005 but cut down on trading after being jobless since 1.5 yrs ago... When you don't have a regular income to back you up, you tend to be overly cautious and it will seriously affect your income from trading. Trading for a living is really not that easy. I actually earned more from stocks when I was employed last time, sounds counter-intuitive but it's true...

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  9. Being laid-off after my job was outsourced. I would not find another job for more than a year. But it was not the end of the world.

    I had received my Australia PR visa a few years before. So, I moved to Australia and thought I can get unemployment benefits. Instead, my skills was required and I worked for a engineering firm. Now I work for myself to get even better pay. I have a decent house with garden and a nice car.

    When there is nothing left to lose, take the risk.

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  10. Hello hyom,

    After being laid-off when my job was outsourced. I would not find another job for more than a year. But it was not the end of the world.

    I had received my Australia PR visa a few years before. So, I moved to Australia and thought I can get unemployment benefits. Instead, my skills was required and I worked for a engineering firm. Now I work for myself to get even better pay. I have a decent house with garden and a nice car.

    When there is nothing left to lose, take the risk.

    ReplyDelete
  11. "There are certain expenses which must not be cut. This is allowance to parents and parents-in-law. The first response from parents is to cut or stop their allowance upon learning of their children's retrenchment. I have never heard of parents stop providing for their children when they are out of a job. Therefore, why should children stop providing for their parents when they become jobless? People who stop their parents' allowance are making a gross miscalculation. Their own children will do the same thing to them when they grow up. They will not feel a pang of guilt because their own parents did the same thing to their own parents. Setting a good model example to the children is the most effective and yet, least time-consuming way to educate them. Much better than spending so much time giving them tuition yourself and yelling at them. They either end up resenting you or hating the subject."

    This is touching. Is this part of your Confucian upbringing? I hope my own children will share your attitude when the same thing happens to them. But like you said, I will most probably not want to take their money if they themselves are in hardship. It is the thought that counts.

    James from California

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  12. "Is this part of your Confucian upbringing? I hope my own children will share your attitude when the same thing happens to them. But like you said, I will most probably not want to take their money if they themselves are in hardship"

    Hi James,

    I think providing for our parents is a universal value. Nothing to do with Confucian or not. I thought it was arrogant of us Asians in the late 1990s to invent such terms like "Asian values" to explain the phenomenon of the Asian economic miracles. See what happened later? Asian financial crisis.

    To be fair to the children of the West, I think parents from developed Western countries which imposed high taxes to take care of the old and retired should not expect too much support from their children because their children are already indirectly supporting them by paying the high taxes. This is not the case here in Singapore. Therefore, children here have to do their duty to the parents.

    In Singapore, there is no welfare. If children do not take care of their parents, they will have to take on lowly jobs in their last days. This has already happened in Singapore right before our very eyes. If you come to Singapore, come eat at our hawker centres and food courts. You will be shocked that a lot of people who clear the tables are old people in their 60s. Just look at their wrinkled fingers and you can guess how old they are. It is sad but true. As a Singaporean, I feel sad whenever I see these old folks because they could have been my parents. The sadness is surpassed by fear because these old people may be a reflection of my own future if I do not manage my money properly or lose my job (which has already happened) and remain jobless for a long time.

    You people in the West only know one side of Singapore from what you read in the media. Economic statistics only show one side of the story. Come and see for yourself. We may have very impressive GDP growth but do the growth benefits filter down to the middle/lower classes or just stay within the elites? Even though you have movements like "Occupy Wall Street" in America while there are no protests here, the income inequality is hurting us just as much.

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  13. I want to write something based on my experience (before my company block this website) but you are right that most readers cannot render much help maybe mostly nice words and encouragement. From my own experience, end of the day, it is my own family that supported me most during the time I am jobless and things went bad between me and my wife. My best advice is to share your concerns with your own family, do not need to feel any shame even if you need to ask for some help (even if you need a short term loan) or cut some expenses. Be careful and avoid the casino & trading T+3 (don't gamble). Find not more that 1 or 2 close friends (usually those who are self employed) who are willing to talk with kopi (don't drink). If you feel you are sick and tired, never take drug without proper doctor’s advice. Depend on your religion, you can pray for good luck and good health for your family and yourself but don’t need to ask to win toto or 4D. (bet $1 toto is fine, who knows)

    It is the time to re-think what you want to do next. People can advise you but it must be your own decision.

    During this time, if possible find a low pay temp or contract job. (some people advise me to be a taxi driver but I never try it) You can queue up in your neighborhood void deck during the meet the MP session. Ask him for help, it is his job to hear you and listen carefully what he tell you (don’t expect too much but he will throw you some “reality bites” stuffs).

    You just need to find some way to gain time.

    From what I see, you have the talents, the motivation and the right attitude. Your mission is not merely to thrive; but to do so with some passion, some compassion, some humor, and some style.

    You can also share with us more in your blog. Brother, you are never alone !

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  14. Hi Anonymous (Monday, December 26, 2011 11:51:00 AM ),

    I am always grateful when readers write a long reply. Must have taken you some time. It is not only useful to me but useful to all the other retrenched people out there.

    Thank you very much.

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  15. Hi, I'm also currently unemployed and looking for a job. Most imprtantly, do keep your mind active and positive while you consider your career options.

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  16. Obviously the allowance to your parents needs to be cut. You are now earning ZERO, and I need to emphasize again, ZERO income. It's not as simple a matter as a pay-cut or a demotion. To top it off, you have monthly expenses to pay.

    You can claim all the filial piety in the world, but this is simply unsustainable. Before long, you will be running to your parents again to borrow cash when the piggybank runs out of money.

    When a company is in trouble, the staff have to work with reduced pay. I'm sure your parents are not unreasonable people. Work out something with them, and reassure them that the payments will revert to their original levels once you find another job.

    What you are doing now is simply putting on a show which you cannot afford to perform.

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  17. You can claim all the filial piety in the world, but this is simply unsustainable. Before long, you will be running to your parents again to borrow cash when the piggybank runs out of money.

    When a company is in trouble, the staff have to work with reduced pay. I'm sure your parents are not unreasonable people. Work out something with them, and reassure them that the payments will revert to their original levels once you find another job.

    What you are doing now is simply putting on a show which you cannot afford to perform.


    Thanks for your reply. Like all parents, my parents' first reaction upon learning of my retrenchment is to cut the allowance totally.

    The real issue is whether one can afford it as you have already mentioned. Affordability differs from individual to individual. However, if one can afford it, why cut the allowance the moment retrenchment hits? Should a company retrench and cut its staff salary the moment bad times hit even if it can afford not to? Of course, if one cannot afford it, then cut. But don't just cut straight away without enduring the pain first. Who knows, maybe things can get better?

    My retrenchment has already been prepared for with an emergency cash reserves which I have built up over the years. I wrote a post on the importance of emergency cash reserves last year.

    http://help-your-money.blogspot.com/2010/04/safer-ways-of-building-retirement-nest.html

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  18. Hi,

    I am sorry to learn of your situation. I find you can really write well, maybe you may want to consider a future in writing?

    By the way, can you add my blog to yours? SG Web Reviews (www.sgwebreviews.blogspot.com)

    I have added yours. Thank you very much.

    Regards,
    www.sgwebreviews.blogspot.com

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  19. Stay positive, stay hungry for success and stay healthy!

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  20. Hi Greatsage,

    I just replied you to your personal email. Thank you for your compliment.

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  21. Jia you!! I am 25, a fresh engrg grad. My respect goes to you for your insights, love for your parents and positive attitude.

    I wish you strength, courage and good luck in the next phase of your life.

    I have bookmarked this blog as there are lots of wisdom here =)

    Joseph

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  22. Hi Joseph,

    Thanks for your encouragement. I also used to be an engineering student. All the best in your studies.

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  23. Hi hyom

    You sound like a down to earth guy to me. Do take your time to find a new job.

    I am a Engineer by training but I am glad that i switched to oil and marine industry more than ten years ago. Keep an open mind on your options and there are plenty of jobs to be found in this sector.

    I always believe that diligent and honest person will always live a good life. Good luck!

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  24. Hi HYOM,

    I feel sorry for you and I have been in your shoes as well.

    If I may give you an advice, quit (or reduce) your trading! At least for now. I see trading as a long term investment. Trading for short term, I count it as a very risky strategy. If you are lucky, you can gain 100% in 1 year, otherwise, you might lose 50% in 1 year. Please don't take the risk as you might need your savings for indefinitely as to how long your depression is, is still unknown.

    Rather focus on looking for job or looking for opportunities which require less risk and dependable return.

    That's my perspective and don't take my advice seriously as you know yourself better than I do. Anyway, I just want to offer you a phsycological support. You can make it through!

    All the best.

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  25. greetings hyom, how are you? have you found a job yet?
    my friend, who has a masters, in the IT industry is taking a "break" from her temp job, it seems that finding a decent job is tough. she is only in her early 30's...

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    Replies
    1. Sorry to hear about your friend. Finding a decent job is always tough. If she has plenty of savings with little debt, it makes sense to be choosy than to be desperate and grab whatever that comes along.

      I pick carefully to be fair to my future employer and not be an unhappy worker. I prefer to take my time to find a suitable job than be desperate and find a job that I cannot perform. It will usually end up as a lose-lose situation for both me and the future employer to grab a job out of desperation.

      Delete
    2. Very logical and sensible reply from hyom but the premise is that one gotta have enough passive income to get by and make ends meet for a relatively long period of time before finally finding a decent job unless one is highly qualified or equipped with highly marketable skills.

      Delete
  26. hi hyom, you may be right but i think at our age, we don't have much choice unless you are in your twenties. grab any decent job that comes by first and work things out from there. with labour market tightening, there are many over qualified sporeans desperate for jobs that may not be suitable for them. the key is decent pay. yes, anyone with a degree can find a job paying at an average of $2000+ but with the influx of foreigners, these jobs are quickly taken up. there is no such thing as fair, why are some paid over millions and why with similar qualification reduce to driving taxis. electronic industry is dimming so don't be too choosy and if possible try to go into a different industry. thanks for my 2 cents worth. another thing, trading on full time basis is the game belonging to the rich people in current time. i doubt there will be another peter lim. cheers and have fruitful job search.

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    Replies
    1. Hi green sky,

      Thanks for your concern. If an unemployed person has problems meeting family obligations, then I agree with you that he ought to grab any job that comes by. In fact, he would be irresponsible if he demands to be choosy and fail to meet his obligations. However, if he has ample savings, then it does not make sense to be a desperate job-hunter. Although I am a middle-class engineer who is not earning a lot, I lead a simple, frugal lifestyle. After all, this is a blog about managing money and I have to practise what I preach :)

      Desperate job-hunters have a high chance of ending up in a job they either cannot do or do not like to do or both. This is why job interviewers are wary of candidates who are unemployed because these people may bluff their way in out of desperation. I think during an interview, it is important to be honest about one's strengths and weaknesses so that the interviewer can decide on whether one is the right fit or not. It is ok to be rejected for the right reasons.

      $2000+ in Singapore is too low for a graduate with 10 years experience given that a fresh graduate is already earning more than that. Actually, I am willing to work much lesser than that at longer hours than most provided the person I am working for is myself. If an experienced older worker has to be reduced to that, he should seriously consider creating a job for himself.

      I do not intend to trade/invest on a full-time basis even if I can be successful because I am still in my thirties. At the risk of offending fellow investors/traders, I think investing is not a socially useful activity and I find it embarrassing to tell people I am a full-time investor/trader as I am still relatively young. How productive can a person be by making money from the buying and selling of others? Imagine the economic consequences if our brightest minds become full-time speculators. But I do not wish to be hypocritical. For selfish reasons, I would choose to be a not-so-useful rich investor anytime than be a highly-useful engineer salary worker who is always worried about retrenchment.

      Delete
  27. hi hyom, with your positive mentality, i think any employer who read this will be glad to hire you. i am just offering my opinion to let you have many more views on the matter. i believe you are a good analytic thinker as i browse thru your blog, and certainly will find the best answer for your situation.

    $2000+ is referring to average graduate maybe with arts or biz background. engineering grad. command highest starting pay at about $3000 but as years go by, grads working in the financial industry will be much better. my last engineering job, i was paid $5k armed with 6 years of experience.

    have you considered the banking sector, i know many engr. grads turn to banking after few years in engineering.

    ok, pal, got to go and excuse my late reply. cheers and good luck to you.:)

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  28. Hi greensky,

    $5k with 6 years of experience as an engineer is pretty good. You must be quite a good engineer. You are no longer working as an engineer? Did you make a switch?

    Good luck to your IT friend who has a Masters too.

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  29. hi, hyom,

    the thing is that i didn't tell you that my $5k a month was an overseas assignment in taipei for a year. and i don't have a masters just BEng(Hons)EEE. good luck and cheers!

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  30. Hyom

    My sympathies and my commiserations from a past traveller in the past when going thru the valleys.

    You are on the right track by analysing your own strengths and weaknesses.

    You are correct to inform that attitude is the key and do keep touch with family and close friends.

    For engineering graduates, the main areas available is sales/marketing or possibly even lecturing/tutoring at the poly/ITE which are short of people.

    My humble regards

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  31. Hi, sorry to hear that you got retrenched. You have my deepest sympathy.

    Retrench can be a blessing in disguise nonetheless:) Famous blogger like Pat Flynn from smartpassiveincome.com made it to $8,000 passive within just a couple of months after being retrenched. Cheer up and always look on the bright side.

    I hope that everything goes well for you.

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  32. Your blog provided us with valuable information to work with. Each & every tips of your post are awesome. Thanks a lot for sharing. Keep blogging fitnas health

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  33. I just discovered your blog. What you say makes lots of sense. Keep up the good work

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  34. I love managing my own money too. Perhaps we can learn from each other? how to contact u?

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  35. Hi Hyom

    I came across this article by accident. Kudos to you on the point on not cutting your allowance to your parent when retrenched.

    I am curious, how are you doing now? Have you found a job or are you living off passive income?

    Would be interesting to hear from you.
    thank you

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    Replies
    1. Hi HumbleBlogger,

      Thanks for your concern. I have found a job working with nice/smart people and working for smarter people.

      I took a quick glance at your blog and saw your goal of retiring early. Hope you achieve your goal. But when it comes true, I am not sure if It is really ok for a relatively young person to stop engaging in productive activity. Collecting passive income is not exactly productive. Hopefully, when you are near to your goal, you may give some thoughts on how to be productive in the next phase of your life.

      Hope your desire to get out of the rat race is not caused by a stinking job environment. If yes, you may want to consider quitting because it is burning out a young, productive person.

      Delete
    2. Hi Hyom

      Agree with you that productive activity should not stop with retirement. I see retirement as financial freedom which leads to the ability to move on to other different pursuits.
      Thanks for your advice and good to know that you have found something good to do!

      Delete
    3. Hi Hyom

      Agree with you that we should not stop engaging in productive activities. If we stop, we will atrophy. I see retirement as achieving financial freedom, which provides you with the opportunity to pursue different goals.
      Thanks for the advice, and congrats on finding a good job!

      Delete
  36. Wow, I found this blog really amazing. The article that I have recently read is really useful and knowledgable. I will definitely come back soon to read some other informative material.
    Funny Clips

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