077: Five Things Redundancy and Social Welfare Taught Me (w/ Davis Mutabwa)

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Here are the FIVE things I learnt that may be helpful for you or a friend you know maybe experiencing one of these “out of body” experiences:

1. Being on Social Welfare Is Not Fun
2. I Should Have started Preparing Sooner
3. Have an Open Mind – Find a Coach and Model them
4. Consider Taking a Pay Cut – Get Back in the Game
5. Find a Plan-B Option that Works for YOU

Personal Lesson

I remember it like yesterday, started just like any other Friday: drive down the freeway, get to work have my marmalade-on-toast, and work on completing the financial statements for publishing to the market the following week. At 4pm everything changed, I got the call to the CFO’s office, Legal Counsel also present, felt the situation was a little bit unusual, and sure enough I had been made redundant. I can still feel the shock of the reality of the feeling, very humbling, had until 5.30pm to make my way out.

I wasn’t bitter or disappointed in the people that had hired me to be their Finance Manager. I knew the company was struggling and that the shareholders were putting pressure on the executive team, but there was so much going on, I didn’t expect it that day.

I got back to my office and made the call to my wife telling her I was out of a job. Like a lot of people we didn’t have any Plan-b whatsoever – we were “all or nothing” – single income family with a mortgage, scary. It was a real blessing for us in a sense though, that we had literally just sold our home and so all the gains made on the home became our day to day income, this was only meant to be for a very short while. But soon enough, it became clear that the world was going through the global financial crisis, this was September 2009. Recruiters were not returning phone calls, people were not leaving their jobs. There was zero happening for 6 months straight, not one interview!

The FIVE things I learnt

1. Being on Social Welfare Is Not Fun

I had no idea where the nearest welfare office was and didn’t even understand how the whole system worked. I quickly found out that it does provide a safety net for families but doesn’t do more than maybe pay the rent. It didn’t cover the car payment so driving our once ‘fancy’ German car that at the time had another party listed on title i.e. bank, was no longer fun. I now had to drive carefully each night and be on the lookout for any suspicious looking cars near our house, make sure it’s not the sheriff!

My advice: You don’t want to be on welfare.

2. I Should Have Started Preparing Sooner

The social welfare system will not help you professionally get back into a good role – things may have changed now, yes the teams assigned to you will help you write up a resume and prepare you for an interview but in my experience they kind of didn’t even do that – just had to tick the boxes and show up each fortnight.

Tip 1: Don’t leave it too late to have a Plan-B action plan. It took me 6 months to just get a contract role.

Tip 2: Think about whether your savings can last you long and If not, then start putting a robust savings plan together or better still a Plan-B income source for you and your family.

3. Have an Open Mind: Find a Coach and Model them

In November 2008, my wife and I attended a real estate coaching seminar, the concept was residential property sub-leasing – we had never heard of this approach to generating cash flow, it sounded interesting but life got in the way and never did anything with it. Immediately following my redundancy, we decided to hire the sub-leasing coach and invested over $10,000 from the sale of our home to kick this project off and this was our first venture as business owners. We operated this for about two and a half years running about 30 rental rooms in 3 large furnished properties mainly catering for the student population here in Melbourne. I kept an open mind and learnt a lot about running a business. I made some good money but lost good money too a.k.a. “school fees”.

Tip: Evaluate all options that come your way and don’t discount them on face value or based on non-expert opinions.

4. Consider Taking a Pay Cut – Get Back in the Game

Following two back to back contract roles, I decided to go for a permanent role that was in an industry I had little experience in, so I decided that I was willing to take a pay cut in order to get back in the game, plus I was still running my enterprise, so I didn’t want the long hours of my previous full time roles; and I was also preparing to study for my masters in finance.

I got the role and worked through the balancing act of all three things until the work load became too intense. I had to make a few changes to the model and opted to get back to school, leave the real estate space and invest into an online distribution platform.

5. Find a Plan-B Option that Works for YOU

An online distribution platform was appealing to us because it has leverage which I struggled with in my previous enterprise, so we evaluated eBay, Etsy and eBooks but didn’t quite get the results we were after. The challenge was the platforms were there but identifying and sourcing great products was tough.

What actually worked for us was an online distribution platform through which we market essential utility services licensed with a company that partners up with some of the large Australian providers leveraging the network marketing/direct sales model. It’s done online and part time-services people already use and need every day, we loved it and still do!

Tip 1: Do your research and find a Plan-B cash flow model that will work for you and your family (just remember to ignore the skeptics, trust me they won’t help you pay for your mortgage!). Start on that plan now before you need it, NOT after the event like I did!

Tip 2: You can’t always avoid being made redundant, but do your best to put a plan together to help you get through it – and just remember, whatever you may be going through, it too shall pass so stay strong!!

Get Your Hopes Up and Maximize Your Dreams

Cheers,
Davis!
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