Retirement: A Second Career, aka the Sisyphus Solution

One of the positive alternatives to living at a much reduced standard of living in retirement is to start a second career. Now that might sound a lot like not actually retiring at all, but maybe it is in the mindset.

In the CFA's The Future of Life Cycle Saving and Investing: the Retirement Phase, Anna Rappaport says people thinking of retirement "... want work to fit around their lifestyle rather than making their lifestyle fit around work." In the same report, Alicia Munnell gives us a clue why: "According to psychologists, as we age, we have a tendency to “positivize” or to divest ourselves of people and situations that we no longer enjoy. When I’ve asked retirees in the past “Why did you retire?” they gave what sounded like the most frivolous reasons: “I sat in the middle seat,” “I was on the tarmac for two hours,” “I’m just not doing this anymore,” “I’m sick of it,” or “I got a new, young boss, and I can’t stand the guy, and I’m out of here.”
The tendency to positivize also applies to the work environment. Our tolerance for putting up with things we don’t like diminishes as we age."

Along comes the solution of a second career, in which you do something you like. Novel idea! Munnell says that happens a lot with second careers: "The Urban Institute recently studied the nature of these new jobs, or second careers, held by older workers and found that, although they paid less and provided less in the way of fringe benefits, people generally liked these new jobs much better. They experienced less stress, and they were closer to their homes; the second career had a lot of positive attributes."

The big financial benefit is that every dollar earned in a second career is a dollar less required to live on from savings and investments.

Of course, there is a catch. Working, especially doing fulfilling work, is good for your health and you will probably live longer as a result. Oops, now your savings have to last even longer, so you will have to work even longer and put off entering the ideal(?) but fatal state of being a couch potato. We could borrow from Albert Camus and call this the Sisyphus Solution - endless work that makes people happy.

Some resources on second careers:

• Encore Careers - news, advice, blog
• Ontario Ministry of Training Colleges and Universities - training courses for laid off workers
• Job Bank Work After Retirement - Canadian government site; job listings, a few government links
• Work Less, Live More by Bob Clyatt - excellent book putatively about semi-retirement but it applies just as well to retirement, covering budgeting, investing, finding fulfilling work
• Plus50Lifestyles.com - articles on health, leisure, relationships, budgeting, real estate, US and Canada job listings, post resume,
• 50Plus.com - articles on health, leisure, travel, money, relationships, employment; Canada job listings, post resume
  
• Retired Worker - job listings, blog, news
  

"Bouncers" Author Interview

Back in December I posted a review of the fine book Learn to Bounce by Anita Caputo and Lee Wallace. The book gives valuable advice on how to overcome a job loss and again find fulfilling work.

Anita agreed to answer a few questions I had after reading the book. Here are the answers. There are some especially valuable comments about how to deal with finances before and during an unexpected job loss.

1) Why did you and Lee write this book? What was lacking out there that you felt it worthwhile to put all that effort into a book?

We wrote the book to provide hope and inspiration to people who are in job search mode. We decided to write the book when tens of thousands of people had been laid off when the bottom dropped out of the global high-tech industry. The unemployed had no productive outlet in a market that offered few, if any, jobs that suited their skills and experience. We wanted to restore people’s confidence and encourage them at a time when there was little good economic news. We wanted to highlight that some individuals did find work – not just any job, but work that fit them well. We wanted people to know that “If they can do it, you can do it!” even during the worst of economic times.

FYI, as the USA moves into recession and thousands of jobs are being lost, particularly in the financial sector due to the credit crunch, the stories and solid advice apply equally to anyone experiencing unemployment.

2) What surprised you the most, or differed the most from your preconceptions about the realities of being laid off?

First of all, I never imagined that it could happen to me. Isn’t that typical? And I still believe that if we had not had such a huge economic downturn, I would still be working in high-tech wondering what I would really want to do.

When I saw others being laid off, I always thought how lucky they were to be collecting a severance package and having time off, particularly if they were laid off during prime vacation times. Here is what I learned.
a) Being laid off is not a vacation. Finding another job is a full time job!
b) Severance/redundancy payments are not winning the lottery. If you are out of work for an extended period of time, and/or if you have large financial obligations, you will need every penny of what you were paid and maybe even more.
c) I find myself being more empathetic and I will “go out of my way” to help someone who is laid off. There is nothing like “walking a mile in another man’s shoes” to know what it is really like. Providing someone who is looking for work with connections to other people who can help them, or to potential jobs is very important to me.
d) I will treat someone who is laid off from a job the same way I would treat someone who has resigned from a job. When someone is laid off, I recommend you have a celebration, take them out for lunch or follow whatever ritual you would normally follow. Often when someone loses their job, they feel like they have done something wrong (even if/when they haven’t). Treating them equally helps to reduce the stigma a laid off person feels. It helps to bring proper closure to what was an important part of their life. There are two things people did for me are very memorable. One, a colleague that I worked very closely with sent me flowers saying “This is the first day of the rest of your life”. Secondly, when I went out for lunch with someone who was employed, I was very grateful when they volunteered to picked up the tab.

3)What was the greatest challenge in writing the book?

Getting it done! As we have often said, Lee Wallace and I had real jobs. We did not get paid to write. We had to make the money to pay for the book.

Staying motivated was also a challenge. Working as co-authors had many benefits. One significant benefit was “picking up the slack” or helping to motivate the other person as/when required.


4) What are the main financial bits of wisdom coming out of the experiences of the layoff-ees?

Save while times are good. Definitely save and cut back on expenses, particularly “if the writing is on the wall” and you think you may be laid off.
Pay off any debt that is not tax deductible, i.e. invest in something that makes you money. If you are debt free, you will have the financial flexibility to pursue the work and life style you want without feeling pressured. If required, have the courage to ask for financial assistance from family and friends.

The following tips are direct quotes from the people we interviewed in Learn to Bounce:

• Control your costs if you get laid off, to minimize your debt.
• Be prepared to start at the bottom if you go into a new field.
• Pay attention to your finances. A projection of expenses and income will tell you where you stand.
• Cut back expenses if necessary.
• Save and invest when times are good.
• Accept support from your family and friends.
• Don’t expect the same salary you were making in high tech before the downturn.
• Be prepared to start again from the bottom, if you are changing fields.
• Get your finances in order when times are good. Those who were prepared didn’t panic when they got laid off.
• Be financially prepared in case you get laid off. If you do, cut back immediately.

5) What proportion of the people in the book would still be happily in high tech if the meltdown had not happened?

Your guess is as good as mine. I suspect almost all. The reason I say that is that each and every one of the people we interviewed were relatively content with their work until the down turn happened. If you like challenge in your work and a positive work environment, which most people do, then the high tech environment satisfies your needs. High tech is a fast paced, challenging and exciting sector to work in. When people were laid off from high-tech during the early part of this decade, due to the terrible job prospects in the sector, people had the time, opportunity, and in some cases the financial means to explore other career options.

6) Is there any way to prepare people for a world of layoffs; who should do it - the employer, schools?

Interesting question. Being prepared for “a world of layoffs” is really being prepared for “a world of job change”. The only difference between being laid off and quitting a job is who chooses to initiate the job change. I think life experiences have prepared generations Y and perhaps X to live in a world of change and to expect a portfolio of careers. Younger workers typically do not expect to spend the rest of their life with one employer and certainly not in one job.

Regardless of who initiates a job change, the keys to landing another job quickly and easily are clarity of what you want to do next, and leveraging your social network to land the work of your choice.

7) Do you think there's a conflict between loyalty to the employer and loyalty to yourself?

Not at all. Loyalty to yourself is loyalty to your employer. Assuming that loyalty to yourself be working in an area of interest and doing work you are passionate about, then you will love your work. In turn you will do your best and your employer will love your work too! As long as what a person enjoys doing and the environment they like to work in, matches what an employer requires and what they offer, everyone wins.

8) Is loyalty to the employer an outmoded concept? How do you think people should manage the balance between what the employer wants you to do and what you want to do? Has your experience being self-employed influenced your perception of doing what you want vs what the employer wants? For instance, as a self-employed person are you able to do exactly what you want all the time?

Loyalty to an employer is not an outmoded concept. See #7. The definition of loyalty in the dictionary is “a feeling of devotion, duty, or attachment to somebody or something”. No where does it say for “how long”.

It is up to you to be clear about what you enjoy, what you want and what you don’t want in a job. Likewise it is up to an employer to be realistic and clear of the kind of work expected and the work environment it can offer. The key is to have a perfect match. If there is an aspect of a job that you perceive as not being totally aligned with what you think you want to do, it may be worth taking the risk and trying it. The reality is that until you actually try something, you really don’t know how much you may enjoy doing it. Recently a reporter told me and Lee Wallace a story of how she accidentally fell into a career of writing. She never thought she would enjoy writing until she did it.

There is always “stuff” that we prefer not to do. For some it can be the basics of caring for yourself, like cooking, cleaning or exercising. If you feel like you are leading a fulfilled life, you are finding a way to get the necessary things done, while staying focused on the things that fulfill you; doing the things you value and enjoy most. Work is part of living your life in a manner that fulfills you.

With respect to myself and self-employment, self-employment gives me flexibility in my schedule that suits my family life most of the time. I am usually here for my teenage daughters, the other relationships that I value, and for my volunteer activities. That being said, there have been many times that I have missed parent teacher interviews or other important school events because I was out of town. Those important responsibilities get completed at another time that suits my schedule or my husband is able to fulfill a responsibility for us. Just like everyone else, I am always managing my life and my schedule to strike that right balance.

9) Any more book projects on the go or in your head?

There is definitely more to come. We live in a world filled with opportunity. The challenge is choosing the work/project that I want to do next, the work/project that I am passionate about, and the work/project that will provide the financial rewards and life style that I desire. The beauty and challenge of self-employment is that the choice is mine. That choice comes with 100% responsibility for the results too.

As I write the answers to these questions, I am leveraging my network to determine what I will be doing next and how.

Educational Homogamy - What It Is and Why It Matters

Never heard of the word "homogamy" before? I must admit neither had I till today despite many years in schools and a fair penchant for reading.

It's time to memorize this word (and for Blogger to add the word to its spell-check dictionary), which in the phrase "educational homogamy" means "the tendency of men and women with the same level of education to be married to one another".

Why is it important? ... because educational homogamy has been increasing steadily for the last three decades in both Canada and the United States - more and more people marry within their educational level such as university grads marrying university grads - and couples with university education have higher family income. More than half of young Canadian and American adults now marry someone of their own educational level. All this is laid out in the Stats Can research study The Changing Role of Education in the Marriage Market by Feng Hou and John Miles of May 2007. When I think about my family and friends, the above findings hold true more or less in every case.

Now I may be confusing effect and cause but it therefore seems to me that this study offers more evidence that advocating to one's kids to undertake advanced education will be good for them. Mind you, the study does not look at whether marriage breakdown rates are higher amongst people who marry above or below their 'educational class'.

Here's a telling quote from the study: "... well-educated men and women tend to marry one another and form families with high earnings and few risks of unemployment. Less well-educated couples have lower wages, and both partners are far more likely to experience periods without work." And so we have another cool phrase to drop into conversations - earnings homogamy!

The de facto social discrimination that has emerged is not religion, creed, colour, race, ethnic origin, age or sex, it's education! Imagine that, the school system as the new class differentiator. Think of the implications: How will the government stamp that out? Should people in those speed dating events start by asking "how far did you go in school?"

I must fess up to being felicitously educationally and pecuniarily homogamous, as well as being culinarily and aesthetically homogamous, though I am only partially recreationally homogamous and definitely not televisionally so (Coronation Street, arrgghhhh!).

Survey Results: Number of Times Laid Off

The results are in for the survey question "how many times have you been laid off in your career?". Thirty-five brave people answered as follows:

• 17 (48%) Never
• 6 (17%) Once
• 5 (14%) Twice
• 7 (20%) More than twice

On to the next fascinating topic to survey.

Book Review: Learn to Bounce by Anita Caputo & Lee Wallace

Bounce is a sneaky book. Read it straight through quickly and it will seem a bit mundane, dry and repetitious. That's a mistake. Read it slowly, one short case at a time, and you will find yourself drifting off into reflection on your own life and career. That's quite therapeutic.

Three quarters of the book consists of two to four page stories of twenty-eight real individuals or couples (most often with their real names and given some of the details they reveal, it was a brave act to do so ... but then I always found tech work culture and people to be more direct and open) going through a layoff and ultimately successful job search after the high-tech bubble burst. One of the authors, Anita Caputo, tells her own story. From high-tech job she has now made the career transition from IT business manager to career coach, motivational speaker and management trainer. Disclosure: I am proud to say that Anita is a former colleague at the big N and a good friend. Fellow author Lee Wallace brings his 30 years experience as a career counselor and coach to the book.

The other quarter of the book consists of the authors' tips and strategies for success in finding new work. The book focuses on the impact of emotions and state of mind since the authors believe through their experience and that of the interview subjects that those are the critical elements of a successful bounce back, not just into any old job, but something that is fulfilling. Curiously, the presentation and writing style is not emotional, it is very matter of fact, but maybe that's a reflection of the philosophy of successfully bouncing back - "_ _ _ _ happens", the sooner you accept it and move on, the better off you are.

The large number of stories allows the authors to present a very wide variety of types of people, obstacles and eventual outcomes. Many are more difficult situations - people highly specialized, mid-forties or fifties, lengthy time with one employer (and thus not used to the job search process), children to support, medical problems to deal with, spending years out of work (technical skills getting rusty etc).

All are success stories, there are no tales of permanent failure and woe, though hardships along the route to success are not glossed over. No doubt, the tech meltdown caused some to fail (I know some tech families ended up staying in the City of Ottawa's homeless shelter, though I don't know what happened ultimately). There are many ways to fail. The authors have decided to focus on the positive.

Despite all its subjects coming from high-tech, this is not a book about high-tech. Company names are completely absent from the text, evidently a deliberate attempt to distance the message from the specific industry. The significance of high-tech is that the meltdown provoked a quite unique set of extreme and highly instructive circumstances - educated, skilled and experienced people suddenly faced a situation where their industry and technical knowledge were more or less useless because there were almost no jobs in the sector. They were thus forced to be imaginative and resourceful. But the gratifying result is that they succeeded anyway.

The importance of networking appears consistently in many stories, how making connections through others produced far more results than browsing the Internet. The interviewees and authors say over and over that the time to do networking is always - never to stop. When I was out of work, I found networking to be the most awkward and difficult of things to do. But it did get me at least one job and played a role in the other job I found after my layoffs. Networking is a two-way street - being able to help others find a job is deeply satisfying. In financial terms, it could be termed social capital. Just as you have financial capital, which store financial assets to be spent when you need them, and human capital of training, education, knowledge, experience and skills, which store value of use to employers, you have social capital of connections with people, favours and services rendered, which you can lever/"spend" to find a job (and can be extremely useful in doing a job as well). The authors note that quickest to find work were those with the best networks in place.

In terms of personal finances, the book mentions in passing a number of principles that seem self-evident but they sure help or hurt if you do them or not so the reminder is salutary: having savings to fall back on relieves some of the pressure; having to take on debt during unemployment "rots the gut"; investing in high-tech while working in the sector is a stupid thing to do (mea culpa, I did it), i.e. diversification is more important than "investing in what you know"; household expenses can be cut drastically if necessary (one family cut down to a third of what it spent before the layoff), ideally when the warning signs appear; the time to pay attention to family finances is during good times, i.e. start saving, mind diversification now and if you are too busy working to do it yourself, hire a good advisor.

If you ever get caught in a layoff, you need this book. It will remind you that, no matter what your circumstances, you can bounce back and it will guide you how to do it. Others did it, you can do it.

If you are working in a job you don't like or you feel in a rut, there's a fair chance you will get laid off sometime to relieve you of this problem (e.g. in my mini survey on this blog half the respondents had been laid off at least once). This book will give you ideas what to do next to find something better and make you feel thankful for the layoff.

If you are happily working in a great job (as I was in high tech before laid off), this book will help you understand that being laid off is not the end of the world. It is not even necessarily a net negative. Happiness does not come in only one job. In short, the people in this book exemplify the philosophy in the Tom Hanks line of the movie Forest Gump, "Life is like a box of chocolates. You never know what you're gonna get."

My rating on this book: 4.5 out of 5.

To order a copy on-line, go to the LearntoBounce website. On Chapters it seems to be "temporarily unavailable". Update Jan.12 - Chapters has finally fixed the problem and it can now be ordered there as well.

Key Decisions that Affect Future Wealth

While we often focus on the stock market and our investment decisions as those that will most affect our future wealth, as I look back and around me, it seems that two other decisions we make during our lives have far more influence. I note in advance, to avoid getting into trouble at home, that neither of these decisions should be made exclusively or even primarily as financial decisions. It is true however that they both inevitably have a very large lifelong financial impact. My comments are descriptive, not prescriptive!!!

1. Career Choice - over a lifetime, the difference in income between a Zeller's cashier and a dentist adds up to quite a lot. Without going into the details of which career pays best, suffice it to look at the simple arithmetic of a lifetime of earnings, which has conveniently been made into a neat table by the Fiscal Agents website. Of course, choosing a career simply for the pay is likely to lead to stress, burnout and eventual abandonment. On the other hand, you get the opposite when your make a good choice - fun and fulfillment, which I would maintain is a non-financial form of wealth.
2. Spouse - pick the wrong person and you can have years, maybe a lifetime of misery, financial and otherwise. Think of divorce, its causes and its consequences. Pick the right person and it's the opposite - a lifetime of emotional happiness, of course, but this spills over into financial success. Not that the spouse brings a pile of money into the marriage but the support from a trusted advisor to not waste, to spend wisely, to invest wisely whatever money is earned makes a huge difference. Investing one's time, effort, love and attention in a marriage brings a very high rate of return. And a stock holding is just a number on a printed sheet, not very huggable. ;-)

In my case, the spouse element has been predominant in whatever financial success I have achieved. Would be interested to hear anyone else's views.