You Need a Plan B

Compelling Economic Reasons Why Playing It Safe Isn’t Working in Today’s Economy

December 3 2007 day 53 - When stress does a nu...

Image by DeathByBokeh via Flickr

The economy – it’s on everyone’s mind. Even though there are bright spots, and even boom conditions – North Dakota, anyone? – for the most part, economic challenge is the reality. In the U.S., the Los Angeles Times reports the outlook is grim even for those who are employed:

Employers announced 115,730 planned job cuts last month, more than double August’s total of 51,114, according to the report from consultants Challenger, Gray & Christmas, Inc. The figure was the highest since April 2009 when 132,590 layoffs were announced.

The conditions that affect these statistics are like the stagnant air that gets trapped in the L.A. County basin from time to time. With the mountain ranges blocking the way, westerly winds that would normally dissipate pollutants are ineffective, and the suffocating mass of smog descends and lingers, choking and compromising the health of anyone who breathes. When will it end and what can be done?

John P. Hussman, whose investment funds are positioned for “long term returns while managing risk,” explains why the economy is stifled, and will be further compromised by increasing lack of demand:

. . .all of us are presently benefiting from the continued demand for default-free securities (specifically, U.S. base money and Treasury debt – which I do continue to view as default-free). It is only that demand that has allowed inflation to remain low despite the massive expansion of government liabilities far exceeding GDP growth, and of misallocated credit that has produced losses rather than surplus output. The overhang of mortgage obligations and sovereign debt, matched neither by current value nor future output, is an extraordinary threat. First, it contributes to keeping resources idle, because it forces consumers and whole nations to remain on a path of austerity and debt reduction rather than spending. At the same time, it prevents businesses from hiring, because they know that demand is not forthcoming. Finally, to the extent that we pursue policies that use public subsidies and money creation to make that debt whole instead of restructuring it, we can expect inflationary pressure in the back half of this decade, because the amount of credit created is not commensurate with the amount of productive capacity that has resulted from it.

When the forecast calls for job cuts and conditions prevent other businesses from hiring, employees are doubly vulnerable, and the unemployed have ever-dwindling recourse. This overwhelming status exacerbates daily stress and keeps people awake at night with worry.

Revert to Plan B

Image by martymadrid via Flickr

What does this mean to you? No matter what your circumstances, you need a Plan B. Now more than ever, resourcefulness is the name of the game. If these indicators are correct, it will be increasingly more difficult to depend upon previously dependable employment, and if you are looking for a job it’s going to be even harder to get one.

When the going gets tough, the tough start a business.

Starting a business is one of the best things you can do to leverage uncertainty, even if you’re currently employed. This statement may seem counterintuitive, but it’s true. There’s risk involved, to be sure, but if you can get to the point where a side business is routinely providing you with supplementary income, you’re less vulnerable should a layoff come. If you’re currently unemployed, you know how hard it is to find another job. Why wouldn’t you be hustling up some income with a business venture of some sort?

Sean Ogle, writing on How to Live the High Life in Bali (I know!), raises two points. 1) Everything is More Attainable Than You Think and 2) Being Resourceful Will Go a Long Way:

Why don’t most people get to live out their wildest dreams? Quite simply put: they don’t try. It either seems to be too much work, or they don’t believe it’s possible, so they don’t try at all. Since most people won’t try, there’s that much opportunity for the person who does.

Some people think being a business owner is something they can’t do. Hussman says they already are without realizing it: “. . .even people who earn income from a paycheck are entrepreneurs in the sense that they are in the business of selling labor services.”

Traffic Jam in Delhi

Image via Wikipedia

Others, who justify keeping their job because it’s a “reasonable commute,” don’t realize how much it costs to keep it:

…this misconception about what is a reasonable commute is probably the biggest thing that is keeping most people in the US and Canada poor.

38 miles/day x IRS estimate of $0.51/mile = $19/day

40 minutes of mixed to high traffic during rush hour sync’ed workday hours = 80 minutes per day = one extra work day each work week to commute

A couple with an equivalent commute would incur costs of approximately $125,000 over ten years, plus spend about 1.3 working years worth of time.

What’s your hourly rate? The least expensive rate I charge for certain services is $50. If a working year at my pay rate is 52 weeks (remember, I am not an hourly employee, I am billing for services/time which I actually work as opposed to have to be at an office) averaging 15 hours per week, a very conservative estimate of the value of my time spent commuting in the above scenario would be around $50,000. (52 weeks x 15 hrs/wk x $50 x 1.3)

Traffic jam

Image by buzrael via Flickr

Over a ten year period, the same professional couple in the above scenario, each using my conservative estimate of time value, would have incurred just under a quarter million dollars expense – a fairly decent house or condo in many real estate markets. Think about that the next time you’re sitting in traffic!

Further, if you care about the environment and your community, consider this:

72% of Los Angeles County commuters drove alone for an average of 28.8 minutes one way. Of those, 82% used a car, truck or van.

So this slightly higher than average usage would equate to a greater financial deficit over the same ten year period, although the actual mileage driven would be less due to higher levels of traffic/slower speeds. The overall impact on the economy should be considered, as the loss of productivity equates to diminished tax revenues from source sectors. Commuting not only cuts into your personal time and ability to accumulate wealth, but precludes you from consumer behavior.

Today, Pete and I commute approximately 20 feet (well, 50 if you count going downstairs to brew or refill coffee in the kitchen) to our home office, or if we’re traveling, our office fits into a rolling piece of luggage. More and more people are figuring out that work is going to be something you do, rather than someplace you go. Freedom is a bigger game than power, say Mavericks at Work. If you’re putting a Plan B in place, you’re probably going to work it from home as a side hustle, too. Imagine saying goodbye to the expense and hassle of going to work!

Ernest Scared Stupid

Image via Wikipedia

Given the fact that traditional retirement isn’t in the cards for today’s workers – the Bureau of Labor Statistics has found the number of Americans working over the age of 65 has risen about 58% over the last decade – as we age, work that complements our physical capabilities is going to be necessary. We are amazed at the number of people we still encounter for whom the thought of using a computer is terrifying because they’re unfamiliar with it. Get a grip! If you know how to get online, you can learn to make money. And if you don’t know, you’ve got to understand there is more at stake than not keeping up with friends and family on Facebook.

All of a sudden, putting some time and effort into a Plan B doesn’t seem so risky.

We’ve been working steadily for over four years on our own version of Plan B.  It hasn’t been easy. Four years is what it took me to earn a college degree back in the day. A Plan B can be a similar commitment. At certain points, we’ve each worked the equivalent of two jobs getting things to where we are today. We decided that multiple income streams were less dangerous than having all our eggs in one basket, and we set up a structure to enable these variable sources of revenue. Four years in, it’s working.

Did we make mistakes along the way? Sure. Did some of the stuff we tried fail to pan out? You betcha. But, other activities have gained traction, and we’re paying the bills. We’ve simplified our lifestyle and reduced our daily overhead, allowing us to do and pay for the things we want, rather than the things we have to maintain. We still work hard whether we’re at home or when we’re traveling, but it seems more like fun. And because it seems like fun, some think we don’t work hard at all!

Magical Landscape 106

Image by h.koppdelaney via Flickr

People say to us all the time: “Wow, we wish we could live the way you do.” What they don’t realize is that they can. They can let go of needing to keep up with the Joneses, downsize their lifestyle, work long hours in front of a computer screen, design a business that supports their objectives and work on it with discipline and consistency. There’s nothing magical about it, although perhaps loving your life may seem like a magical thing when you feel stuck in circumstances that you think are out of your control.

There are two ways humans respond to stress: fight or flight. Nowadays, the flight from economic stress is more metaphorical; we retreat inward. We get depressed, turn into couch potatoes, feel defeated, drink more alcohol, get cynical, passive and negative. The fighters against economic uncertainty are the ones who take action, creating their own change out of the circumstances, responding with optimism, enthusiasm and resourcefulness.

We know what we’re doing about all these things. We’re working our Plan B and it’s working for us. What are you doing?

Related articles

Enhanced by Zemanta


  1. says

    Hi Betsy .. certainly far too many are hunkering down – or are overwhelmed at where to go and what to do (usually the case) .. actually having the gumph to get up and do things differently is a hurdle to over come as everyone poo poos you .. but it’s the only way. Start a small entrepreneurial business .. and if you work at it, regularly, and keep the momentum going all things will work out. Yes – there’ll be trial and error .. but it will come.

    I think people don’t think about the plan at the beginning and the starting small and taking care of the day to day things, that then will bring in the income and more so as time goes by ..

    Great blog post for today’s times .. cheers to you both – Hilary
    Hilary has an awesome blog post here: My introduction to Africa – my review of "Dancing in the Shadows of Love"My Profile

    • Betsy Wuebker says

      Hi Hilary – I agree. One of the things my business coach has helped me with is developing a more strategic mindset: starting with some general goals and then thinking about individual objectives that might contribute to the goal. This is sort of something you think you already know, but using a more disciplined approach can provide focus.

      The other thing that you mention is the discouragement and negativity from others. It’s difficult, but we must realize that is about them, not us. People want to keep you where they’ve slotted you. Then they don’t have to worry about revising their view of themselves in relation (and falling up short). Realizing this was another big breakthrough for me. Thanks!

  2. says

    Plan B? I’m already doing it — working 6 to 8 months out of 18. So I guess I need to look at a Plan C.

    Plan C? Go back to work full time. Fortunately, in the industry I retired from, the aging workforce and changing regulatory requirements have resulted in continuing job opportunities — for those with the right experience. 😉
    Mike Goad has an awesome blog post here: A Windy Texas Travel Day–2011.My Profile

    • Betsy Wuebker says

      Mike – you and Karen have been very inspiring to me along our own journey, even though we’ve never met. What you say about a Plan C is important, in that if Plan B doesn’t work, then you’re going to need one. So many people get stuck, thinking they have no recourse or solutions available to them. And while you are fortunate to have knowledge and skills in an industry where there is high demand, there are still opportunities out there for people who want to make an effort. They might just not be typical of past experience. Thanks.

    • Betsy Wuebker says

      Hi Anna – Welcome to PassingThru! It’s easy to get discouraged when you feel you have no options. But even the smallest amount of taking control can elevate the situation in your mind. Good luck!

  3. says

    Hi Betsy,

    Thank you for your valuable words. It’s true. We do need a Plan B and like Mike said, a Plan C, too.

    Being self employed, what we’ve done is diversify our business. Being in the construction industry, which as you know got hit hard, we put our noses to the grindstone and found multiple ways to not only continue on when others were closing shop, and have learned more along the way. Like you mentioned, we also made mistakes, but that’s how we learn. That’s how we get better.

    I’m also using the digital footprint I’ve created online to build what I believe will be a passive income stream, plus will *hopefully* be a business I can build off of.

    As you noted, many people do not consider the amount of time and money they spend traveling to and from work, nor do they calculate what they spend on work clothing. One good thing about working from home is we can work in our pajamas and no one is the wiser. How sweet is that? 🙂
    Barbara Swafford has an awesome blog post here: Why Bloggers Keep Blogging Against The OddsMy Profile

    • Betsy Wuebker says

      Hi Barbara – The diversification piece is critical, as you point out, as a hedge against external factors. Even people who are self-employed may not realize this until a catastrophic event occurs: losing a big client to a competitor, act of God, etc. When I was younger, and weighing the cost of continuing to work with two young children at home, I did a quick analysis. I was shocked how little net earnings I was making, and it was easier to justify putting my career on hold. If the opportunities to work from home online had existed then…

      You’re right about the clothing costs, too. Panty hose alone! LOL 😀

  4. says

    Hi Betsy! I came over from Barb’s, intrigued at your blog title :). Plan B I really believe in! But if it isn’t an active plan and it’s just a thought I don’t count it at all. My head is always full of ideas – up to Plan XYZ ! Very busy monkeys in my mind, haha.

    Our plan B is for hubs to keep working a few extra years now – he just turned 65 – so we can build up the savings from all the hits we took in the darn market. Meantime I’m building up my nutritional counseling business by teaching classes and public speaking and writing. Lovely that I can do this anywhere we chose to re-locate to in the future.

    Everything is open to “adjustments” – no concrete here. I believe flexibility is key in today’s world.

    Great blog!
    susan has an awesome blog post here: The Gooey Ick of Self-sabotage – Getting Unstuck from Your PastMy Profile

    • Betsy Wuebker says

      Hi Susan – Welcome to PassingThru! You touched on an important aspect of any plan – the execution phase. If we don’t work the plan, all the work of planning goes for naught. And if you’re planning with a partner, their capabilities and opinions go into the mix, too. You’re so right in maintaining flexibility – adapting to changing conditions gives us a better chance of making them work for us, rather than against. Thank you.