Long Term Unemployment

I sympathize with those that have ever been long-term unemployed. I experienced this myself several years ago. Back in the financial crisis of 2008, I found myself long-term unemployed for about two years before taking action that sent me to the other side of the planet.

It happened a few months after accepting a consulting position in a large batch of hires who were doing the same role in implementing software. After about five months, I terminated for somewhat dubious reasons. Regardless of the company stated cause for termination, it was my opinion that the company hired 25 people, knowing that the need was probably closer to 21. I think the first few months of employment was a vetting process to determine who would make the cut. I was getting paid significantly more than some of my coworkers, and I’ll be the first to admit, my skillset did not justify it at that time. I was let go.

The 2008 Financial Crisis Begins

But I wasn’t let go into any old job market. I was let go towards the end of 2008 –  and towards the very beginning of the greatest financial crisis of my life which has since been called “The Great Recession.” Those that lived it know it would later become more like a depression. But at this time, no one could have known how big it was about to become.

I had worked ever since graduating in 2001 without any breaks and my initial attempts to find employment didn’t even yield any interviews. I didn’t panic.I figured this would be a few months off work to relax and finally have some me time. I foolishly thought I might be passive on the job search a bit and then in a month or two and when the job market picks up, I’ll rejoin the workforce.  The job market did not pick up.

The Job Market Becomes Impossible

The job market continued to plunge into hopelessness.  As the outlook became bleaker, my efforts increased. Every day became a ritual. Some time at the gym followed by some time at the coffee or tea shop sending resumes.    After some time, what began to happen is every open position I came across I recognized as being one that I’d already applied to. I applied again. I was qualified for the positions. Sometimes I was overqualified. But the phone never rang, and recruiters never came.

Time progressed. Week after week; then month after month. A year had passed. I was officially long-term unemployed. The job market didn’t want me. To be fair, they didn’t want much of anyone else either but that was little consolation to me. I expanded my job search. Despite having a previous role consulting on software implementation, I was applying to positions in customer service and sales which I thought I might have a better chance.  No luck.

They called it “The Great Recession” but for those living it, it felt like a Depression.

I continued to expand my job search this time thinking I would turn down no opportunity. I applied to retail positions. I applied to server positions at local restaurants and bars. I applied at McDonald’s.  I wasn’t sure how my previous position in software implementation would affect my chances.  My guess is that they wouldn’t want someone that had higher earning potential. But that’s all it was…potential.

There’s a cruel irony about being long-term unemployed. The very fact that you are long-term unemployed makes you MUCH less desirable to companies. Companies actually want the people that are currently working. The (incorrect) thinking is that if they are long-term unemployed it’s for a reason.  They are the leftovers that no one wants and there is no reason to waste time even considering them. The reason this is incredibly wrong is this:

If you ever wanted to hire someone that is going to take the job seriously and give it everything they have, a person that has been long-term unemployed definitely knows the value of finding work. Because they know the feeling of not being able to find work.

So after two years of trying I started working on building a business. If I knew what I know now, I could have taken it somewhere but I just didn’t understand anything about marketing. As such, I abandoned the idea at the first sign of an opportunity to earn real money.

Things Finally Turn Around

After two years of searching and losing a sense of self, I honestly figured I wouldn’t ever see another W2 paystub again. But things changed and I was finally to be paid again. At an hourly rate that I had never anticipated. I accepted a job paying $600 an hour. But my earlier notion that I might never again see a W2 still remained plausible. For this $600/hour wasn’t in US currency.

World Currencies
Money Changing Colors like Tie Dye

I accepted a job teaching English in another country.

I flew overseas to go teach English in Taiwan. I’d never taught anything in my life and I would have figured I was ill-qualified to do so. But the school assured me this was the norm. I did well enough to remain overseas for a few years.


Living overseas was an eye-opening experience. Seeing how other cultures lived gave me a much different perspective on life. Why is it that I could visit an ER room and get stitches and walk out with some pain meds and without any insurance be stuck with a bill of less than $30? This would easily cost $1000 in the USA.

Dealing With It

So what is the takeaway from my story?  Well for one, if you find yourself long-term unemployed, you’ve simply got to think outside the box. Conventional thinking would be to keep hitting the job search.  This was not too different from hitting your head on brick wall. Looking outside your own country is an option. But what else?

Knowing what I know NOW, I’d definitely consider other options. Like what?

  • Starting a business. I had a good business idea but I didn’t know how to market it. Thinking back, I don’t know why I didn’t do more research on learning HOW to market it.  Google’s your friend right? Nothing was stopping me from searching how to market.
  • Freelancing. I could have taken my skillset which consisted of among other things knowledge of databases, systems, SQL, requirements gathering and looked for freelance work or any other type of non-job income.
  • Starting a blog. Regret. I know it’s not good to look back, but this was sort of the golden age of when blogging first blossomed. I had a good story and if I knew what I know now, I could have started a blog and made a good deal of money documenting my travels and earning some affiliate money. But later is better than never hence this blog.

Photo courtesy of

Move your money

Need to Rollover a 401k? Consider This.

If you’ve recently lost your job and have money in a 401k, there’s a good chance you may want to roll that money over to a new broker with more options. These days robo-advisors are a popular choice to automate investing and that can make saving for retirement easier. You just set it and forget it.

There’s a good selection of brokers in the “Robo-Advisor” market these days and most are a good choice for a rollover.  Wealthfront and Betterment were among the first.   Vanguard has an offering.  Fidelity and Schwab do as well.    I’ve even read recently that E*Trade has jumped on the bandwagon.   I have experience with Wealthfront and Betterment and I don’t really have any complaints.

mutual funds are forced to periodically realize capital gains which creates a taxable event in a non-retirement account

It’s About Cutting Fees

The reason for the growth of this style of investing is clear.   It automates something in a cost-efficient way.     Vanguard has become very popular in recent years for their low-cost expense ratio ETF’s and mutual funds.   And you can invest in a mutual fund that is managed and forget about it.   But one issue is that from time to time, mutual funds are forced to periodically realize capital gains which create a taxable event in a non-retirement account.    Your fund will typically distribute a capital gain only to then turn around and reinvest it.   And you pay taxes on that capital gain.

One way to avoid the forced capital gain is to use ETF’s.  The only issue is that if you invest in ETF’s like the famous “3 fund portfolio”, you kinda need to manage it.   A typical setup might be 33% Bond, 33% Total Stock Index and 34% International.

Three Fund Portfolio
Vanguard Three Fund portfolio courtesy of

For your initial setup, this isn’t terribly difficult, but EVERY TIME YOU PUT MORE MONEY IN (or withdrawal) you need to allocate the shares and asset allocation properly.    If you’re doing a weekly deposit, this is going to require a bit of calculation every week to calculate it down to the share.  And you can’t do fractional shares without a robo-advisor.

Bring in the ROBO-ADVISORS.

You simply make your deposit and the algorithm buys in accordance with your desired portfolio allocation.   If the bond market is down you’ll be buying and getting the cheaper shares.  If stocks are a bit high, you’ll be buying a bit less in order to bring your portfolio into balance.

This is what Robo-Advisors do and this is a fine application of technology and the algorithm.   But there’s just one little thing.  They do it for a small fee.

Bring in M1 Finance

Now, you could certainly make the debate that the fee other brokers charge is reasonable and worth it.   Intelligently maintaining the portfolio balance could give you an edge of .25% vs blind buying at a fixed allocation.   And you could also make the argument that the time saved is worth something.    But there’s an army of Vanguard soldiers that simply aren’t hearing it.  And with good reason.   Even a fraction of a percentage compounding over time adds up.  This is where M1 Finance wins.   It’s simply FREE.

If you remove the cost of the Robo-Advisor, it’s kind of hard to make an argument AGAINST using one at least for taxable accounts.    Now to be fair, I think for a retirement account you’re probably fine with just using a typical retirement target fund.  They realize capital gains but it’s not a taxable event so it doesn’t matter in a retirement account.   But for taxable accounts with free management… why not?

Initial impressions

I signed up for an account to check out M1 Finance.  I’ve got to say I like what I see so far.  The interface is slick and fast. Beyond that, you’ve got a lot of options to do more than just buying a set portfolio and can even create baskets of individual stocks you can buy commission-free. Overall I think this is a very good thing for the investment world and should force other brokers to lower or eliminate management costs for simply using a buying algorithm.

Interested in trying M1Finance? If you click any of the M1 Finance affiliate links on this page, you’ll get $10 for signing up. Click below to set up an account.

M1 Finance

Disclosure:  I have an affiliate partnership with M1 Finance and may earn a commission on new signups over a certain threshold. You’ll also get a $10 credit for signing up.