Checklist for separation planning

I've seen some of my good friends being asked to leave for some time now. This has been happening in many companies and my company is no different. I sat and planned for what I should do if I'm asked to go. Here is the result of that analysis. Hope this is helpful to others as well:

1. Gap Analysis: Perform a Gap Analysis of your incomes and expenses.
a. List all the expenses that you will incur like Medical insurance, life insurance, school fees, communication expenses, travel expenses, groceries etc.
b. List all possible income sources like FD interest, Dividends, pension of your parents (if living with you), spouse’s salary etc.
c. Find out the gap between income and expenses. If it is positive you are okay. Otherwise you need either increase your incomes or reduce expenses.
2. Some ideas to decrease expenses
a. Life insurance premiums: List your policies and their premiums in descending order. Make a visit to your insurance company and figure out what will be the surrender value for the top 3 premium paying policies. This could be some source of one time income plus a permanent reduction in expenses to the extent of the premiums. Please do not close down all insurance policies. You need insurance more than anytime now.
b. Reduce EMI burden by disposing off assets: If you have a car loan, see how much your car will fetch you in the used car market. If that amount is more than the loan outstanding sell the car and close the loan.
i. If you have a housing loan calculate a price at which you’ll not make any losses if you sell now. If you can get a buyer for anything above this price, go ahead and sell your house. If you do not want to sell or do not get a price at which you’ll get out with out losses see the idea in the point for using houses in increasing income point.
ii. If you have credit card debt or personal loan, mobilize your salary or settlement money and close them. These will be very harmful to you. If you cannot mobilize money, borrow from a lower interest source. This usually is your relatives.
c. Change what you can change: There are a lot of things that we all got into when the going was good. All these cost extra money. It was okay when the going was good. Now is the time to look these items of expenses and take them out. Some of these expenses are listed below:
i. School fees: We often mistakenly think that higher the school fees the better the quality of the education. Whether this is true or not, see if you can change the schools of your kids to reduce education expenses.
ii. Subscriptions to clubs/gyms etc: Stop payment of these items. We do not need them at this point in our life.
iii. Extra curricular activities for kids: Many of us would have engaged tutors for kids to teach them music, dance, karate etc. These expenses can be cut almost immediately. To replace this spend a lot of time with your kids.
3. Some ideas to increase income
a. Use your self occupied house: If your home can fetch a good rent, and you can find another house at a cheaper rent, please move and rent out your house. This will increase your income.
b. Cash is king now. Sell your MF and Shares if you have them as and when the markets go up and convert to cash.
c. Invest in bank FD with monthly interest payment option. Invest your cash in hand and invest into bank FDs. If your parents are above 65 and live with you invest in their names. They will earn 0.5 per cent more interest.
d. Fill out all the forms and complete formalities to get your PF contribution quickly. Once you get your PF monies invest them again as per point above in FDs.
4. Extract as much out of your current employer as possible:
a. Medical expenses: Pre-pone any surgery or procedures covered by employer’s insurance and claim them.
b. If your employer provides prescription drugs re-imbursement, buy about a year’s worth of prescription medicine and claim them from your employer.
c. If you feel stressed and feel that you may need counseling after the separation, visit a good psychiatric counselor now and get the expense reimbursed now.
d. Accumulate as much leave as possible. It is money.
e. Avail every possible tax saving scheme your employer offers like claiming of petrol bills, children education expenses, claiming mediclaim policy premiums for your parents and yourself etc.
f. Create good reference letters from senior people in your group. Get at least 5 references. Please draft a reference draft for each of the 5 references and get that signed in company letter head from them
g. Get a good experience letter from the company. Take good care to bring out the positives about you in this letter.
h. If you have stock options which you have not exercised:
i. Use cashless option to sell them and book profit
ii. Try negotiating with company for greater grace period to do the exercising of these options. This might be useful if some of these stocks are underwater.
i. Read the policies related to medical insurance for yourself and your parents. These might be valid for the some time after separation. If so please take down the details of procedure for using them.
j. Talk to the medical insurance company which provides medical cover to your company and see if they will extend the policy at same terms and conditions.
k. Do not do anything against the employer’s policies. The gratuity that the employer pays you is contingent on your good conduct.
5. Get support of family and friends
a. Communicate your job situation to your family ASAP. You need their support to get through this phase. There will be some shock and disbelief initially. Be humble and patient. Do not argue and quarrel.
b. Brainstorm with your family and friends on ways and means to tide over the current phase. You’ll be surprised by the number of ideas to cut expenses and increase income coming in from them.
6. Job hunt
a. List down a set of jobs (Ex: IT Services, Teaching, Sales etc) that you’d like to pursue and where you feel that there is good potential.
b. Create your resume for each of the job
c. Send your resumes to you friends and network.
d. Create your profile in linked in and other professional networking sites. Get yourself recommended by your peers in these sites as well.
e. Apply for jobs not just in India, increase your geo spread. Countries like Malaysia, Gulf etc still have some opportunities.
7. Occupy yourself
a. Find some hobby or some activity that will keep you busy during this phase until you get your next job. Inactivity will be hard
b. Join a local self help group for people in similar situation. If there is no such group create one yourself. It is always easier to make progress if you are part of a group.
c. Participate in your household work, like dropping and picking up kids from schools, tuitions for kids, cooking, cleaning etc. This will increase the connect with your family which is very important.

Uncertainty, Black Swan, Katha Upanishad, Bhaja Govindam

I recently read two books by Nicholas Nassim Taleb. Fooled by Randomness and Black Swan. Both these books deal with the randomness and uncertainty in our world and how we are naturally blind to them.

I also read a few Hindu Religious books: The Katha Upanishad (English translation by Hume), Bhaja Govindam (English version by Rajaji), and Bagavad Gita (English translation by Eknath Easwaran).

I found surprisingly the following ideas which are common:

1. NNT says that world is not predictable and one should take steps to prevent being a sucker. He also goes on to say that increase your chances with a positive Black Swan event by collecting opportunities. The Bhagavad Gita says "Do thy duty and forget about the fruits". Basically do things with out expecting rewards. Further Gita goes on to say control your senses. Well one cannot become a sucker if senses are controlled and the intellect is allowed to function properly.

2. Fractals, Self affinity, Self similar concepts that Mandelbrot brought in by connecting the dots... Katha Upanishad describes the layers of a human being Purusha as the ultimate, unmanifest(avyakta), Brahman(self), intellect (Buddhi), mind ( manas), Senses (indriya), sense objects. It is all composed of the same manifested in manifold ways.

3. Platonicity or the arrogance of knowledge is cited by NNT as the source of blindness towards Black Swans. Well Adi Sankara deals with this in his first four lines. One cannot argue using panini grammer with death( A Black Swan I'd say. No body is prepared) when it arrives. All knowledge is useless when Black Swan hits you.

4. NNT shows that the very fact we are here, means that we were so so lucky!!!. Now look at it through the lens of a great tamil scholar: "Rare it is, Rare it is, to be born a Human. Rare it is to be born with out deformity, blindness, deafness. Rare it is to be born with sound knowledge".

5. The Inability of the Human beings to deal with Abstract and falling for the Narrative fallacy.... Well Our Upanishads talk about nirvana, as only experiencable and not describable, too Abstract. Hmm.... Sounds to me like the worship of idols, rituals, etc to me.... Needed but one needs to be aware of them as to what they are.

To sum it up, it felt good to read these books....
LS Jeyaraman