I can definitely say I hit my low point in week 10-11. After deciding to ditch our rental in New York my family has moved into one of our California properties in order to preserve cash. Despite this, our business venture had a small loss due to high staffing needs as well as 3 paydays in June which meant that I couldn’t receive the rent for that month. As I realized, despite not working, I would need to find or put more money into my investment I started to question whether it is all worth it.
As mentioned in previous posts, I own two properties which I rent to a company controlled by a friend who runs a senior care facility at the homes. Currently only one of the homes has a license and he is waiting for the license on the second home (or should I say, my family’s home now). There have been many bumps on the way but the first house is currently full to capacity. The issue has been the fluctuation in the staffing needs and the license my partner is waiting for on the second home. Unbeknownst to me previously, it is very common in the healthcare industry for staff to be flakey and call off the day before or even the day of a shift. This means that my friend gets called in to work randomly if no one else can cover and that sometimes other staff need to stay and be paid overtime. This can produce big fluctuations in payroll that affect the bottom line. In addition, the state continues to add requirements for staff such as training and background checks that make employee turnover expensive, despite the low hourly pay.
On top of all this, the state of California has outrageously expensive workers comp which costs 20% of the payroll expense. Add the employer’s portion of FICA and business owners pay payroll plus 27.6% for taxes and insurance just for their employees. This easily makes payroll over 50% of the businesses expenses. These homes are staffed 24 hours so whether you are operating at capacity or have 1 resident, you have to grapple with full time staffing costs no matter what. It’s no wonder that many of these businesses that rely on low wage workers are started by immigrants who can pull in family members to pitch in and cover shifts when the going gets tough.
Every small business goes through these frustrations but the inconsistent rental income stream and the frustrations for the last few years were enough to make me think if I had made the right decision in renting property to this type of business. I have other entrepreneur friends that have 4 times the revenue and way more profitability that have done it in less time than me and it is quite disheartening to think that you may have just wasted your time and money over a period of 3 years.
On the job front my search has been gaining very little traction. I secured one interview with a large bank which operates locally. When I showed up though, the hiring managing director had bailed and another director graciously offered his advice and stories but stated that he had no openings in his office. He offered the possibility of an office about an hour away from where we reside now and asked to check back in with him next week about potential openings there.
The feeling of dread and anxiety were overwhelming at one point dealing with both the rental properties and the job hunt as well as thinking how my family and I can cope in the meantime. Although I have a severance package and was happy to confirm we still have health insurance, my liquid savings are slowly depleting to hold things together with no concrete job prospects on the horizon. For the first time, the prospect of liquidating my real estate investments and pulling out at a loss totaling hundreds of thousands was becoming a real possibility. Realizing this may happen and knowing how hard I had worked over the past decade to make and invest that money was extremely depressing. It was like all my dreams of a real estate empire and secondary income stream I had worked so hard for were disappearing and there seemed to be little I could do about it.
The thought of this produced a lot of sleepless nights and sapped my motivation to stick to my routine: exercise, healthy eating, writing and searching for a job. By not doing the first two it just exacerbated the poor mental and emotional state I was in. In turn, my interactions with those close to me became more strained further adding to my woes.
Breaking It Down By the Numbers
It is scant comfort at the moment to see the current employment report which came out Friday, highlighting strong job growth with non farm payrolls adding 222,000 jobs. According to the BLS, the current unemployment rate for those with a bachelor’s degree and above sits at 2.4%. This last number implies just about everyone who is educated and wants to work is working right now and puts me in the tiny minority of those not working but looking in this pool. I find it quite ironic that I made work of analyzing and discussing these figures for many years as if they were some abstract concept but now find the reality of being on the other of those numbers is not so insignificant.
Slowly Climbing Out – Making the Day Productive
It has taken a few days to gradually come out of the depths of my low point. I slowly began to consciously push myself to think more positively and have started to wake up at 6am in order to get more done early in the morning. Never having been a morning person, it takes a lot of motivation to push myself out of the bed in the morning an hour earlier than everyone else. The quiet time in the early morning is important though, it allows me to plan out my day, tackle some of the first small things on my list and get an early sense of accomplishment. That effect is important because it starts a snowball of productively for the rest of the day.
I also can’t stress enough the importance of diet and exercise. The drinking culture of the finance world in New York can be pretty intense as everyone seems to be in a rush to escape after a long day or a long week at the office. I am slowly adapting to life outside New York and a healthier California lifestyle though. It helps that the weather is great almost every day so even if I don’t get to go out and run in the morning I can at least take a brisk walk to get the blood flowing. As is well known, keeping active is key to your physiological well-being during a period of unemployment but is very much the case with me. I slacked off for a few weeks on my exercise routine while I took care of my son full time while my wife was back tying up loose ends in New York. I also fell into a bad habit of eating things that were more convenient as opposed to taking the time to make sure I was preparing balanced food for myself. My son was probably getting a better helping of vitamins and nutrients than I was at this time. All of this was a big contributing factor to my overall mood and outlook.
A Learning Lesson Going Forward
It’s no wonder then, the poor diet and lack of exercise coincided with my low point and sapped my motivation for many things, even to write in this blog. Taking a few days to run, weight train, avoid alcohol and eat better has made a world of difference in my outlook and mental well-being. We often take these things for granted thinking we can take a shortcut to being more productive. For example, you may think if I just skip this workout or eat something quick, I can get more done, but if this starts to be a habit then your productivity can fall off of a cliff.
On that note, I have to admire the persistence of other bloggers out there who keep a routine of writing 2-3 posts each week. In takes a lot to keep up the idea flow and maintain motivation. For my part, in addition to those factors, being such a big self-critic can make this achievement even more difficult. I have often written two thirds of a post just to trash the whole thing because I didn’t think it was good enough for the public to read. Maybe I will pick some of these back up and they will provide content for future posts.
This low point has been an important lesson though, I can’t just pay lip service to maintaining a healthy lifestyle, it has to be an integral part of the process of searching and coping with the weight of my responsibilities and the stress put on my family. Although I knew this point would likely come, dealing with it was more difficult than I expected. I am now realizing that looking for a job is similar to prospecting for new business in a sales role; you have to sell your brand, have doors shut on you but eventually someone will find your pitch useful and throw you a bone. Given that the job market is still strong, I have reason for optimism moving forward.
The information provided by www.cashchronicles.com is for informational purposes only. It should not be considered legal or financial advice. You should consult with an attorney or other professional to determine what may be best for your individual needs. www.cashchronicles.com does not make any guarantee or other promise as to any results that may be obtained from using our content. No one should make any tax or investment decision without first consulting his or her own financial advisor or accountant and conducting his or her own research and due diligence. To the maximum extent permitted by law, www.cashchronicles.com disclaims any and all liability in the event any information, commentary, analysis, opinions, advice and/or recommendations prove to be inaccurate, incomplete or unreliable, or result in any investment or other losses. Content contained on or made available through the website is not intended to and does not constitute legal advice or investment advice and no attorney-client relationship is formed. Your use of the information on the website or materials linked from the Web is at your own risk.