The Great Recession has turned unemployment and layoffs from a distant thought in people’s subconscious to a constant concern in the forefront of their minds every single day. It’s probably because unemployment is at an all-time high. Even if you feel secure in your job, you still need to have a plan of action in case you find yourself without a boss or a paycheck that cannot pay even your cheap home loans.
Once you establish an emergency fund and make accommodations and comparethemarket.com for other key areas of your life, such as health insurance coverage during your gap in employment, you can start planning for things like continuing your investment activities while unemployed. Let’s look at ways you can do invest when you don’t have a job.
Stick with Safe Stocks
If you are already invested in the stock market and you lose your job, the worst thing you can do is panic. Don’t freak out and cash out – just make some minor adjustments so you’ll weather the storm a little better. While you’re without work, keep your money invested in safe, dependable companies – think blue chip stocks – that pay regular, dependable dividends. Companies such as Wal-Mart (WMT), AT&T (T), and Procter & Gamble (PG) are some great examples.
Bonds are Okay, Too
Bonds are a great way to store your money for a few years, so you’ll have access to it later on if you need it. They’re a great vehicle if you think you may need money around five years from now, but for immediate cash if you lose your job, the best way to go is to open a savings account. You’ll have cash on-hand during your job loss; but it’s also there in case you become ill and can no longer work, or if you have another financial crisis that merits dipping into the funds.
Hands Off That IRA!
Investing in your retirement regularly and for the long term is the most important investment you’ll ever make. Before you deal with stocks, bonds, or anything else, you need to have your retirement on lockdown. This brings us back to the point about your emergency fund – beef it upon in order to avoid dipping into your retirement account if you lose your job but still need a way to pay your bills.
The Best Investment You Can Make
If you’re unemployed, investing in yourself is a great way to yield higher returns, guaranteed, for life. What are we talking about?
Investing in your education during a gap in employment will equip you with additional skills that are vital to have in a highly competitive job market. It’s tough out there, and there aren’t enough jobs to go around. Therefore, at a juncture in your life as critical as unemployment, it may be worth a few student loans to make yourself more appealing to your future boss, and increase your potential paycheck in the process.