Transition

This is a speech I gave in my Toastmaster's group this morning....



Your boss calls you into his office. The room becomes quiet. He asks you to take a seat. There's a sad look in his eyes. You know it's not good news. The words you had hoped never to hear come pouring out of his mouth - "I'm sorry", he says, "The economy has hit our business hard and many of our clients are unable to pay their bills. We need to downsize. Today will be your last day."


At that point, it doesn't matter what else they say about how much they like you, how much they value your work, how much they want to help you find another position. All of the air has been sucked out of the room, and your only thought is "How can this be happening to me?"


Have you ever been here? Are you afraid in this economy that you might be here soon? Let me offer a few lessons I've learned after being laid off 6 times in 10 years.


This is probably the most important tip - for the first 24 hours - DO NOTHING. You can tell your spouse or those closest to you, but resist the urge to update your resume, file for unemployment or any other action. You truly need that first day to process what has happened in your life. Take 2-3 days if you need it, just don't make any major decisions while you are still in shock.


After the initial shock, spend some time reflecting on your current situation. At this point, go ahead and file for unemployment, but you may want to hold off on updating your resume and sending it out to headhunters or on the internet. Okay, I know you think I'm crazy, but this market has changed. You can't just throw a resume out there and expect to get a job right away, let alone the job of your dreams.


During this reflection period, think back to what you liked about your last job and what you didn't like. Were you moving towards goals you had for your life, or were you just doing a job? Were you in an environment that encouraged personal growth, or were you just expected to do whatever was asked by the higher-ups?


As you reflect, spend time dreaming. Do you really enjoy the line of work you are in, or would you like to try something new. Many people have had it drilled into their heads that they can't pursue their dream because there is no money in it. I choose to follow the words of Rush Limbaugh - find something you love and you will never work another day in your life.


Do you want to work for someone or would you like to try something on your own? Challenging times can spur us to action we previously did not believe possible. One of our politicians recently said we should never waste a good crisis because it gives us the opportunity to make decisions in the future that we were unwilling to consider in the past.


Now that you have your dream and your goals, what do you need to accomplish them? Do you need additional education? This might be a good time to finally get that college degree, teaching credential, MBA, CPA, etc.


If you choose to work for an employer, now is the time to update that resume. Have someone look it over who is knowledgeable in this area. Meet with headhunters to find out the market conditions. Renew acquaintances with people in the line of work you are aiming for. Use tools like Monster.com, Careerbuilder.com, but don't rely on them solely. In this tough job market, the personal touch is always best, so don't be afraid to pound the pavement.


If you choose to try something on your own, you have a lot of decisions to make. What do I want to name this venture? Do I need a business license? What kind of business cards, flyers, etc. do I need to promote my business? What kind of networking groups would be valuable to me? Do I have all the tools I need to start my business? Do I need to apply for a business loan? Do I have the discipline it takes to do my own business? This is a key question, because only you will be forcing yourself to get going in the morning, to make wise use of your time, etc. Do you have something to offer that people are willing to pay for? Is this product or service right for the current economy? For example, I personally would not start a high-end boutique business right now. Even the rich find it unfashionable to spend money on luxuries right now while so many are suffering.


Maybe you want to start your own business, but just aren't quite ready to take the plunge. Don't let go of the dream. Perhaps find a job that you enjoy, even if it pays less than you were making previously. Continue taking steps toward your dream. Work for your new employer as if it were your own business. Get that additional education. Start a business on the side. Network marketing businesses are a great way to develop business skills that will enhance any line of work you choose to follow. Read good books, like Robert Kyosoki's Rich Dad, Poor Dad. Listen to tapes that educate and feed your mind. Surround yourself with people who have positive, can-do attitudes.


The most important thing is this - you must believe in yourself. Being laid off or fired is one of the most ego-deflating things that can happen in your career. But this is not the end, it is only the beginning! Remember - don't make any major decisions for the first few days. Come back to the dreams you've been setting aside for years. Develop an action plan to achieve those dreams. Then, take the first step into the next glorious chapter of your life.

Ten Facts about First-Time Homebuyer Credit

Note: This is copied from the irs.gov website:

Issue Number: Special Edition Tax Tip 2009-10
Inside This Issue
Ten Facts about the First-Time Homebuyer Credit
Many taxpayers who purchase a home this year will qualify for an $8,000 federal tax credit. The refundable first-time homebuyer credit is a major tax provision in the American Recovery and Reinvestment Act of 2009. But time is running out to qualify for this credit.
Here are ten things the IRS wants you to know about the first-time homebuyer credit:
1. To be considered a first-time homebuyer, you – and your spouse if you are married – must not have jointly or separately owned another principal residence during the three years prior to the date of purchase.
2. You cannot claim the credit before there is a completed sale and purchase of the residence. The sale and purchase are generally completed at the time of closing on the purchase.
3. To qualify for the credit, the completed purchase must occur before December 1, 2009.
4. The home must be located in the United States.
5. The credit is either 10 percent of the purchase price of the home or $8,000, whichever is less.
6. The amount of the credit begins to phase out for taxpayers whose modified adjusted gross income is more than $75,000 or $150,000 for joint filers.
7. The credit is fully refundable. A homebuyer with no taxable income, who qualifies for the credit, may file for the sole purpose of claiming the credit and receive a refund. The credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax owed.
8. The credit is claimed on IRS Form 5405, First-Time Homebuyers Credit.
9. Taxpayers can claim the credit for a qualified 2009 purchase on either their 2008 or 2009 tax return. For those who have filed a 2008 return, a Form 1040X, Amended U.S. Individual Income Tax Return can be filed in order to get a refund in 2009.
10. The credit for qualified 2009 purchases does not have to be repaid, as long as the home remains your main home for 36 months after the purchase date.
Qualified taxpayers who have been considering a main home purchase may find extra incentive from this tax credit to buy now so they can complete the purchase before the December 1 deadline.
For more information on this and other key tax provisions of the Recovery Act visit the official IRS Website at IRS.gov/Recovery.

September

As the kids are beginning a new school year, it's a good time to start thinking about your tax situation. Things to consider:

1. How does my income compare to last year? It may be time to increase or reduce withholdings, or to change estimated payments for self-employed businesses.
2. Tax credits - Boy, there are a lot of them this year. If you've been postponing taking advantage of some of the energy tax credits, get on the ball. You'll want to have the work completed before the end of the year to qualify for many of these credits.
3. School tax credits. Many states (Arizona included) offer refundable tax credits to benefit schools, both public and private. You make the donation this year and get the money back on your taxes next year.
4. Retirement plan contributions - Depending on your income and entity structure, you may be planning to make a contribution to a SEP-IRA, Roth IRA, traditional IRA, etc. Consult your investment advisor (see my recommendation for the best one in the East Valley!).
5. Are my records up to date? This would be a good time to set an appointment with your tax advisor to review your current situation and plan for this year's tax liability.

As has been said, those who fail to plan, plan to fail. Take time this fall to set your plan so that you can reach your financial goals.