As Covid-19 deepens its economic impact on the business world, the best of the business houses also seem to be falling flat on their finances, breaking down. Losses are mounting for companies on account of a complete shutdown in revenue-making activities and at the same time running overheads & liabilities that are building pressure on their cash reserves. News from across the world is pouring in with company shutdowns, salary stops & cuts, salaries stayed for the whole year, lay-offs, discontinuance of life and health insurance coverages, seizure on incentives, etc. The world seems to have come at a full stop!
BigRise Financial ™ estimates that job losses could continue to happen until Mar-2021. It’s a sad scenario that will push a large mass into the ‘unemployed’ category. Be it any industry, sector or job domain, job losses are inevitable. We commit to helping all Indian-origin across India/ Asia, UAE, UK/ Europe, US/ Canada, Kenya, Australia & New Zealand, operating right from our base in New Delhi, India.
What if you’d lost your job? If that’s written in your face, you would have to face it with formidable strength. A thing to be wary of here is that the last thing, after a job loss, you want happening with you is getting struck by an untimely mishap like: a family member contracting coronavirus & needing healthcare, death of a money earning member, job loss of a spouse as well, natural disasters striking, burglaries/ house-breaks, etc. This unexpected event could have a devastating effect on your financial stability. Regaining financial conscious if such an unfortunate event happens at this time, would be next to impossible. The fact of the matter is that the current ‘weak environment’ is so prone to the occurrence of these mishaps that even one single event (if it happens, god forbid) can leave you gasping for breath.
We recommend you our time tested Financial Path to be well planned ahead of an event in which your job is lost. We strongly suggest that you action these even if you had a job currently.
1. Consult and get a private pure Term Life Insurance Cover?
WHY?
- The insurer covers income earners only: Life insurers need current and latest income proofs to issue you a cover. No earning credentials would push you to stay ‘coverless’. Consultation helps you to arrive at an apt life cover sizing.
- To avoid family despair: Life cover is your family’s only hope in case you lose your earning potential and in an instance if death hits you on the top untimely, after the job loss. The environment currently has all the elements of high risk in it.
2. Get a private and adequate Health Cover for self & family
WHY?
- Employer withdraws it: You have a limited group health insurance coverage through your employer that stays active till when you are working with them. Losing it obviously puts you and all your ex-employer covered dependents at a great ‘Medical risk’.
- Avoid accidental spending of your savings: The last thing you could afford at this tough time is to be using your limited bank cash reserves on yourself or a family member’s illness.
- Health status favors you currently: Covers are issued by a private health Insurer only until when you are fit. No one can guarantee you a cover if you contract coronavirus today or even if you develop a natural lifestyle disease like: hypertension, diabetes, thyroid, etc. caused by stress.
3. Plan crisis-use funds, short & long term recurring incomes
WHY?
- To serve immediate crisis: Set aside approximately 6 months of contingency fund to use towards all planned expenses. This fund should factor in the sum of all the various expenses that you are expected to encounter during this period including: groceries, bill payments, children’s school fees, telephone, gas, electricity, etc. Add 1.5 months extra equivalent funds on the top to this to serve as an ‘expense cushion’ for something unexpected or miscalculated coming your way.
- To handle short-term recurring expenses: After putting away funds for ‘immediate crisis’, it becomes imperative to plan where to invest. Work with a debt financial planner to pick up best investments & allocate between 25% to 50% of the 100% funds that you have in your reserves, depending on your comfort. Dedicatedly plan this fund to generate incomes to handle expenses that arise post 6 months up till as much as 5 years. These expenses can include household & family expenses, unavoidable family events, business clothing for interviews, insurance premiums, mortgage installments, and all other expenses. Technically, the idea is to build an investment-led ‘income engine’ that translates a natural cash flow to you, like how you had with a steady job earning. This psychologically lifts your confidence & is the key to pass through this bad time.
- To avoid any emergencies in mid-term ever: In the future, avoid getting trapped in a clumsy situation like today without an earning. Fire up the mid-term investment engines that generate money for you starting the 5th year while the world continues to sleep, clinging their cash reserves. Explore financially viable options with at least 25% of your balance reserves, while still retaining a min. 25% extra funds in hand as ’emergency expense cushion’. You can expect yourself to be doing a much better job in 5 years from here, and that this surprise income that starts would only bring you more in-hand earnings to support your lifestyle.
Note: If you also hold debt mutual funds (other than the above cash reserves), use a systematic way of deriving income out of it as well. The more the income sources through your investment, the more you would be at rest mentally, during the crisis time. Tabulate all these expenses using system tools to have a clear view of them and hence be better prepared during this adversity.
4. Stop or delay all unnecessary expenses & payments
WHY?
- To have better cash flow in hand: Stop needless expenses which you’d overlooked in your account statement till when had a stable job earning. Things like: Extra TV subscriptions (mostly unutilized), various mobile app subscriptions, gym fees, fitness & wellness website payments, fine dining or frequent restaurant rounds, vacations or road trips, private cabs, overspends on online shopping, etc. have to be discontinued at once. You need much more money in hand to handle your basic needs now than crediting it into other providers’ bank accounts. However, keep yourself motivated during this rough patch by doing appropriate spends on recreations.
- To avoid larger liabilities emptying your bank: All payments related to mortgages, other loans, insurance premiums, etc. should be explored for ‘formal delays’ speaking in harmony to the service providers of those. Explore moratoriums on these overheads without getting charged on interest and negotiated it with the provider explaining your current situation. Surprisingly, most of them could give you a breather between 3 months to even 2 years at no interest charges, depending on your past purchase & re-payment patterns. Don’t hesitate to write escalation mails to the management of these providers if the frontline staff is unable to help. You would see how the universe helps you if you get down to doing it with conviction. For the ones that do not get solved, negotiate to switch yearly liabilities to monthly/ quarterly without extra charges. Avoid usage of credit cards mostly as you could get extra charges levied on that.
Lastly, as you have a solid financial plan and strategy in place now and that your expenses are controlled, feel confident to see if you can engage yourself in any part-time revenue generator activity that matches your talent and skills. See, the idea is not to make a little earning here but to be sure that one’s skills are being sharpened throughout the job search time along with keeping one’s morale high. Continue to make a better CV, join recruitment groups on popular job and networking sites, add new skills to your resume learning them mostly free online or at a limited cost. Being ready with future career skills would land you in a new job much swiftly than your competition. Further, spending limited money wisely on education would be a valuable investment. Besides just making through a job with this planning, as a surprise, you may expect a decent hike too.
The crux of the article is that in the event of an Indian-origin losses job, he would promptly need to wisely execute a structured financial plan using his existing funds to generate incomes, as well as, cut or limit redundant expenditures to have enough funds in hand. Such planning would be critical to sail smoothly through a difficult time when you don’t have a job.
Indian-origin people have the flexibility to consult BigRise Financial ™, an Investment Consulting organization that works in the space of financial planning of Indian-origin (PIO) across the world including: OCI, NRI & Expats to get them cutting-edge investment options in India. They bring world-class products and solutions from the world’s most renowned financial organizations and insurers to their clients.
To get COMPLIMENTARY advice on this situation, write into: nitin@bigrisefinance.com
Or Drop a WhatsApp on: +91 98182 46300
Author: Nitin Attri
BigRise Financial ™
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