Canadian Capitalist Logo Dark
No Result
View All Result
Friday, August 5, 2022
  • Login
  • Register
  • Home
  • Economy
  • Markets
  • Real Estate
  • Tax Savings
  • Investment Guides
Subscribe
Canadian Capitalist Logo Light
  • Home
  • Economy
  • Markets
  • Real Estate
  • Tax Savings
  • Investment Guides
No Result
View All Result
Canadian Capitalist Logo Mobile
No Result
View All Result
Home Uncategorised

Preparing for Tough Times

by Ram Balakrishnan
January 19, 2009
Reading Time: 2 mins read
128 5
0
good growth stock mutual funds
152
SHARES
1.9k
VIEWS
Share on FacebookShare on TwitterShare on Linkedin

With economic conditions worsening, pink slips are flying thick and fast. Statistics Canada reported that more than 71,000 full-time jobs were lost in December and Finance Minister Jim Flaherty warned that Canadians were “in for a very difficult year”. January brought more bad news on the jobs front with Circuit City alone letting go 30,000 employees.

Assess your personal situation: How stable is your job and how likely it is that you might be let go? Take my personal situation. I work for a company whose fortunes ultimately depend on consumers spending hard-earned cash on electronic knick-knacks. It is not a recipe for stability at the best of times but with consumers tapped out, my odds of getting laid off are pretty high. My wife, on the other hand, works in the public sector and the odds of a job loss are very slim. In fact, even the possibility of a reduction in pay is quite remote. Many workers won’t be so lucky. Already, bonuses are hard to come by and at least one company has announced that it is cutting base pay for employees by 5% to 15%.

Figure out a worst-case scenario: How long can your household last on a lower, or indeed, no income? To find out, check your current expenses to see what can be cut out to run your household in survival mode. That should give you a good idea of how long your emergency savings and future income from severance payments (assuming your employer is in relatively good financial health), EI benefits (which are paid out after a 2 week waiting period) and other income (such as the income from a portfolio) will last.

Increase your rainy day funds: If you are uncomfortable with how long your household can survive on a reduced income, start stashing away more in your emergency savings account. The usual thumb rule is to have three to six months of expenses in an emergency fund but you may want to think about saving more by cutting back on discretionary spending. There is nothing like cash in the bank to provide the fortitude to survive tough economic conditions.

But, don’t avoid risk altogether: It is perhaps natural that appetite for risk is much lower when our pay checks are not safe and our portfolios are smaller. But if you are confident about your defence, don’t forget to go on the offence. Many, if not almost all asset classes are significantly cheaper than they were and while markets will remain as unpredictable as ever, the long-term return expectations are looking attractive.

Related posts:

  1. Finding a Financial Advisor, Part 1
  2. Carnival of Debt Reduction # 19
  3. The Income Tax Cut is Better
  4. This and That
Share61Tweet38Share11

Get real time update about this post categories directly on your device, subscribe now.

Unsubscribe
Previous Post

This and That: Another week, another giveaway

Next Post

Checking in on the Giveaway

Ram Balakrishnan

Ram Balakrishnan

Related Posts

Why you cant afford a house in Canada

Why You Can’t Afford A Home In Canada?

January 24, 2022
270
investing benefits
Investment Guides

Finding a Financial Advisor, Part 1

June 19, 2021
2k
investing in bitcoin

Is it time to invest in Bitcoins again?

May 13, 2019
2k
when do reits liquidate
Uncategorised

Performance of Currency-Neutral S&P 500 Index Funds

January 19, 2014
1.9k
is mortgage interest tax deductible
Uncategorised

The 2013 Sleepy Portfolio Report Card

January 12, 2014
1.9k
how to buy individual stocks in canada
Uncategorised

Asset Class Returns for 2013

January 5, 2014
1.9k
Next Post
retirement income tools

Checking in on the Giveaway

Please login to join discussion
Canadian Capitalist

© 2022 Canadian Capitalist

Navigate Site

  • Home
  • Advertisement
  • Contact Us
  • Privacy & Policy
  • Other Links

Follow Us

No Result
View All Result
  • Advertisement
  • Contact Us
  • Home
  • Economy
  • Real Estate

© 2022 Canadian Capitalist

Welcome Back!

Sign In with Facebook
Sign In with Google
Sign In with Linked In
OR

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Sign Up with Facebook
Sign Up with Google
Sign Up with Linked In
OR

Fill the forms below to register

*By registering into our website, you agree to the Terms & Conditions and Privacy Policy.
All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
two man and woman standing on doorway
The man who does not read has no advantage over the man who cannot read - Mark Twain
Go to mobile version