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So what’s your Plan B?

October 6, 2008

Ever played the game “What would you do if you had a million dollars”? You find a friend, ask each other the question and get set to share your wildest fantasies. I played that a lot with my brother when I was a kid. The answers were always the same – a house, a car and a boat for me, traveling the world for my brother – but somehow we never got tired of it.

Imagining how to spend money we don’t have is a blast but have we ever thought of the opposite – what we’ll do if we lost everything. Job, house, car, girlfriend, boyfriend?

Unthinkable right? These things just don’t happen to us young and special people no matter how bad things get. Who can blame us. If things get too hot we’ll just run back to our parents so why worry, let’s party.

Well, my friend in the US had the same supreme confidence when a massive layoff in July took him by surprise. He lost his job, couldn’t keep up with his payments so they took away his apartment and his car. His girlfriend also left him. Couldn’t handle the pressure. But still, as of last night (we chatted online) he still insists ain’t no way he’s going back to live with his parents. Typical fierce American pride. Lets see how long he’ll last.

I guess when the world’s at our feet we young people will only concern ourselves with best-case scenarios but behind all that positive thinking, would any of us dare entertain the idea of preparing for the worst case scenario? One where we lose everything but the shirts on our backs?

Yeah yeah I know what you’ll say. Don’t worry too much, live in the present, have faith yada yada. In fact I’d be the first to say these things in normal economic times but in case you haven’t noticed, these aren’t exactly normal economic times. I am starting to hear words I haven’t heard in a long time – recession and retrenchment. Something tells me sticking one’s head in the sand, having no Plan B or Plan C may not be a very wise thing to do under the circumstances.

So. Do you have a Plan B?

You do know that working extra hard and praying for the best when a company shows signs of retrenchment don’t exactly qualify as a plan, right?

Someone once gave me this advice: Hope for the best but prepare for the worst. Actually I have been thinking about Plan B for some time although I’m not exactly sure how to start.

How would you start?

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I’ll leave you with this old Greek fable of The Ant and the Grasshopper that might sound familiar to you.

IN a field one summer’s day a Grasshopper was hopping about, chirping and singing to its heart’s content. An Ant passed by, bearing along with great toil an ear of corn he was taking to the nest.

“Why not come and chat with me,” said the Grasshopper, “instead of toiling and moiling in that way?”

“I am helping to lay up food for the winter,” said the Ant, “and recommend you to do the same.”

“Why bother about winter?” said the Grasshopper; “we have got plenty of food at present.” But the Ant went on its way and continued its toil. When the winter came the Grasshopper had no food, and found itself dying of hunger, while it saw the ants distributing every day corn and grain from the stores they had collected in the summer. Then the Grasshopper knew:

“IT IS BEST TO PREPARE FOR THE DAYS OF NECESSITY.”

Æsop

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5 Comments leave one →
  1. October 6, 2008 9:45 am

    Always prepare for the worst….but what you think is the worst might not be like the actual “worst”. Just dont overdo things. Don’t buy unnecessary stuff. Stop going for tours n trips n stuff unless you have a lot of additional cash. And things like that.

    Actually, whenever there’s a problem, there’s an opportunity also. Just make sure that when it happens, and when everyone is struggling with the problem, we’ll be the one with a smile on our face because the problem is an opportunity to us.

    Easier said than done though.

    “whenever there’s a problem, there’s an opportunity also”

    Precisely my thoughts. A new circumstance offers new opportunities – a new supply and demand chain. A depressed market is a time to buy shares and property if you have the holding power. Higher local unemployment provides opportunities to broker off-shore employment. Or to provide opportunities for self-employment. Or to produce goods at a lower cost. Yes its easier said than done but its not impossible either.

  2. LC Teh permalink
    October 6, 2008 10:00 am

    Money may not be everything but that’s the first item on your plan B. Always have something saved up for a rainy day. Never spend everything. Even when I was earning chicken-feed from my early days, I’d put some away. (I had to refuse to budge even when my wife wanted a set of gold ear-rings! I said, sorry, we can’t afford that…)

    One day, the worst happened (back in the 1985 slump). I could still survive more than 2 months without a job and started from scratch after that. Friends were willing to help, not with money, but with part time jobs. I had to put in effort. Wife was pregnant with 2nd child. She shared the work. We pulled through. At least I still had my family intact. I can’t imagine losing ALL.

    3 things as far as I can think of:

    1. Save some money. You won’t know when it will rain.
    2. Keep friends and family in good terms.
    3. Keep your faith. If you haven’t lost that, you haven’t lost all.

    Thanks for sharing. When one doesn’t have much like a bachelor whose parents have departed, its easy to lose everything but yeah, keeping friends and family on good terms will definitely help. Faith… its fragile, easily broken when everything is collapsing. Guess that’s one reason to need friends and family – to reinflate one’s balloon.

  3. October 6, 2008 12:50 pm

    Be thrifty.

    Good advice worth following whether or not there’s a downturn. It also helps to find a backup plan to generate new wealth during a downturn, not in a passive way but in an active way.

  4. October 6, 2008 3:28 pm

    i am always thinking of the worst, i guess it is the pessimistic side of me. though not necessarily that i am prepared to face them if it ever happens.
    plan B? Perhaps find another job and in the meantime, try to make more $ from blogging..

    I think its good practice to think of all possibilities good and bad. In business we have no choice but to do that so you are just being practical. Looks like you are already taking steps to diversify your income. 🙂

  5. October 7, 2008 10:51 am

    I’ve just read the book Who Moved My Cheese and I find that it is useful in such times of change. At least it helps in mentally preparing for a change to come.

    I’ve heard of that book, never read it tho. But yeah, its not just our finances we should fortify, its also our mental grit to face uncertainty.

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