Job-loss and soon to be Job-less

Needs work but only $45k
Back in September it was made known to our office that the mother company would be shutting us down.  No good reason was given other than they did not wish to renew the lease on our building??  That made no sense and no one questioned it at the time.  I have been through this before but had never seen the ax fall on my head in my 19 year career.  So in 2018 on April Fool's Day I will become job-less.

Following the stages of grief I was at first shocked, then angry, then freaked out and am now at a place of calm acceptance.  I haven't really bothered to look for another job yet as I wanted to enjoy my holidays stress free.

Stress free because they are giving me a very small severance but more importantly because I have savings and the ability to vastly reduce my expenses.  I have already halved my internet/TV, cell phone and car insurance bills.  In a tighter squeeze all unnecessary spending would be cut. 

I have confidence I can get a similar job unless the stock market tanks in 2018.  If it does tank I have never used unemployment insurance but I know it is there.  It would cover my basic costs but not all of my mortgage.

The mortgage monster has weighed on me since I purchased my first house.  Think about it…you pay all your interest up front and if you fail to make your payments they can take your house and you loose all your equity. 

We are on our 3rd house and if you total up all the interest payments, we have only lost money on owning each home.  In our current home we have already paid more than $50k in interest.  That is not a good deal for anyone but we have been brainwashed into thinking mortgages are part of the American dream.

With that in mind we am planning on downsizing to a smaller home this spring with the hopes of having little or no mortgage.  This can be easily accomplished in most parts of our country.  Houses under $100k are plentiful in my area.  If you save 50%+ of a 50k salary you can buy one outright in 5 or less years.  If you live in an area where house prices like this don't exist you could move.  There are always choices.

Once we no longer have debt, choices are plentiful.  If you have debt that should be your top priority for the new year.  Only then can you know true freedom.  Once debt free, I could choose to continue in my current field or I could try another career.  We live in a great country (contrary to the complainers out there) where choices are endless.

Happy new year,
DFG

Comments

  1. I'm sorry to hear they are eliminating your position DFG. I can't imagine the shock and feelings you have been going through, but it sounds like you have the right attitude and mindset going into April Fools day. You make a great point about your mortgage and it is great to see that you are taking action and downsizing in an effort to reduce your mortgage payment. Since you are frugal now and already push expenses as low as possible, you should have an easier time adjusting since you won't have to take an axe to an unsustainable lifestyle. Best of luck finding a new job and making some lemonade out of this situation.

    Bert

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    Replies
    1. Lemonade always does taste better with a little sugar of optimism. Thanks Bert.

      Delete
  2. :-( Sucks big time mate. It is one of the reasons we try to reach FIRE as soon as possible. Looks like you have things planned out. I wish you the best with your job search.

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    Replies
    1. Exactly DG. I still have a few more years until FIRE but the day will come when I can throw off the shackles.
      DFG

      Delete
  3. So sorry to hear of your job loss. I can only imagine the uncertainty it creates in your life. I wish you the best in finding alternative employment!

    About mortgages. I'm sure you did the calculations, but the thing about mortgage interest is that one should determine the impact of the tax benefit, then compare the (reduced) amount to the rent you would pay on a similar house. If you're still paying more in mortgage interest, then you could consider the difference a "loss". However, over a long term, property values seem to rise to (at least) match inflation. That benefit is hard to quantify.

    On the other hand, there are maintenance costs to consider, property taxes, etc. and your flexibility (to move around) is limited.

    All the best!

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    1. Yep lots of factors you have to consider regarding owning a home. With the rate of inflation low my property has seen little increase in the 7 years we have lived here. The tax benefit has been nice but each year it reduces as you pay down your mortgage. I think the point I was trying to make is to not buy a huge house you don't need. I didn't read enough FIRE blogs until recently. Now I realize more is not always more...
      DFG

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  4. DFG,

    Sorry to read about the impending job loss. As a fellow father of 5 children and having 7 persons to feed on a sole income, I can only imagine how that has weighed on your mind. I wish you the best on securing the next job.

    PIV

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    1. Thanks PIV. Yeah wish I had more income streams ;-) Someday.
      DFG

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  5. Just read your story and i wish you good luck. Wheres there's a plan there's a way. Kind regards

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    Replies
    1. Thank you SMI. Trust and hope (and planning) are powerful tools to the mind.
      Peace,
      DFG

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