How Do You Deal with Getting Screwed?

 

Now that the first few days of Chinese New Year have ended, its time to address the taboo topic of getting screwed. Like it or not, the reality on the ground in just about every corner of the globe is gloomy and there’s a good chance that one is going to get screwed. Unless you’re at the level of being paid in stock options or you work in the insolvency business, be prepared for pay stagnation, pay cuts or being retrenched. Let’s face it, even big tech companies with large reserves of cash are laying off people. So, what can one do in such an environment?

Well, one needs to start with the mindset. As is often said, you need to hope for the best but expect the worst to happen. That way, if you don’t get screwed you can count your blessings. However, if you do, you are prepared for it.

Preparing for the worst, means understanding that concepts like the “Iron Rice Bowl” are things of the past. Employers have the ability to find someone younger, cheaper and more compliant than you and the loyalty that is demanded of you is not something that is necessarily going to be reciprocated.

So, if you start with that, you will understand that having a single income from a single source is not wise. Not having cash in the bank is downright foolish. So, if you have a salary, no matter how small, make it a point of setting ten percent of your take home pay at the very least. The reality of life is that bills will need to be paid even if you don’t have a job. Cash in the bank will allow you to tide things over if you were to lose your income.

I will confess that I have not been good at saving cash in the bank. Last year, I had several occasions where I thought I was on the way to saving but things happened along the way and I had to draw out the cash. Hopefully the rabbit year will allow me to keep things on the side.

I also set aside some funds in CPF. The system in Singapore isn’t perfect but its better to have more inside than less. So, I try to contribute to my special and medisave accounts, which happen to be the only places that pay four percent a year in annual interest.

In addition to feathering the nest, one also needs to develop a second income stream in the event that you lose the first one. Most employers make you sign a contract that forbids you from taking on another job. There’s also the fact that most jobs are designed to drain you of energy and for most people, the idea of working a second job is a non-starter.

However, developing a second income stream is essential if you are to find any form of security in an environment where getting screwed is a given. I was lucky in the sense that my employer allowed me to continue working at the Bistrot and I took great pride in working two jobs. However, Covid put an end to my side gigs in restaurants and so, I focus on blogging when I am not at my day job. The blog has not replaced my gig I had at the Bistrot. Advertising revenue takes several years to pay off ($150 to pay out) but it still helps go towards savings. I do get a small royalty once in a while for sites that pick up my pieces. It’s not much but every little extra counts.

I know of people who have taken to driving grab and I believe that people should be allowed to do things like rent out rooms on AirBnB. Simply put, developing side hustles allows people to be less beholden to a single employer, which is admittedly something the Singapore government does not want (given that it sells the fact that it can provide a compliant workforce to multinational investors). No matter how small ones’ side hustle is, it is still vital to have one. Even if you never need to replace your main income, the few extra pennies that come from the side hustle can help feather your nest.

Given that I work in liquidations, my strongest advice to anyone who works for a company going into liquidation is never depend on the liquidators to pay out. Whilst employee salaries are considered “preferential” payments in a liquidation scenario, the fact remains that the company went into liquidation because it didn’t have the means to pay bills, including yours. Liquidators are under no legal obligation to pay your salary and they spend most of their time trying to salvage what little that’s left of the company. Liquidation dividends are often paid in cents on the dollar owed and you never know when you can get the money. Whatever you get out of a liquidator is a bonus.

So, if your employer is struggling to pay your salary, start looking for alternatives and move on. If there is a problem paying a month’s salary, its very likely they won’t be able to pay two. Watch out for stories about how well the company is doing or a creation of reasons as to why you cannot get what is due to you.

The world economy is going through a rough patch and it is unlikely to get better anytime soon. The wisest thing to do is to prepare for the worst.