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Recession Proofing My Career

I’d written originally this in August 2019 with a bit of foresight of a pending recession.

I wrote this primarily for myself. Multiple reviewers have mentioned that they found it immensely useful, so sharing it with you here!

Unfortunately, I didn’t follow some of the important notes here myself. Hope you do better than me!!!

Hard Assumptions

  • Recession will happen in the next 6-24 months

  • Will hurt technology startup professionals which depend on VC money directly as pay cheques

Best Suited

  • You work in a tech career e.g. engineers, product managers, designers

  • Are 2-7 years out of college, probably don’t have kids

  • Living in Indian Tier 1 or 2 city like Bangalore, Delhi, Bombay, Jaipur or Chennai

Prerequisite Mindset

  • You can do this. And you do not need to rely on some CA or a relative or your father

  • Do your homework. Kill your gut instinct with mounds of calculations before deciding

  • You are a fracking adult. Overcome your fear and learn a bit of Excel magic

  • Don’t expect early wins. Early win is you not being homeless

Three to Takeaway

30-40-50 rule

  • Pay less than 30% of your income in rent and recurring expenses

  • Spend less than 40% of your income in all expenses, other than rent and healthcare

  • Save 50% or more of your post-tax income in long term investments

Spending

  • Get to Default Alive is good advice for people and startups

  • Pay off any personal debt like credit card debt

  • Spend on “owned” entertainment i.e. downloaded movies or music which you can see >> Netflix/Spotify

  • If you have kids, pay off their school/tutoring fees upfront and negotiate a discount

  • If you have high living expenses e.g. clothes, dining out, gauche groceries - please stop ordering free-delivery-but-expensive food from Swiggy/Zomato!

  • Read blogs like FIRE focused blogs like Money Mustache. They’ve been prepping for a recession since 2017

Money Box

Health & Family

  • Buy health insurance, life insurance - term insurance. Never ULIPs

  • Buy accident and personal insurance please.

  • Get your health check up done regularly - prevention is cheaper than curing

  • If you’re delaying “going to the gym” or therapy - do it now. You might not be able to afford it later. Buy your Gym/Fitness class subscription long term

Invest

  • At least 50% of your Income for long term

  • Keep 6 months of your expense rate, in a Liquid Fund. Not cash.

  • Cash in your savings account is bad. FD/RDs are worse - you're losing money to inflation and taxes

  • If you are in the 30% tax bracket, you need to invest in an FD offering at least 10% to get a positive inflation adjusted return.

    • No FD gives a 10% return, you just lose 2-4% every year.

    • Don't try to time the dip - that is how at least 2 lakh people lost money in India

    • Even God cannot beat DCA i.e. SIPs win over lump sum, always

    • Automate and schedule everything you can - your savings via SIPs

Mutual Funds

  • Beware of the fees - invest in direct MFs (NOT Regular) via a discount brokerage like Zerodha

  • Opinion: Exchange Traded Funds > Direct MFs

  • Gold ETFs > Physical Gold; Gold can be a golden investment in a recession

  • Understand terms like debt, liquid, equity and duration like ultra short to long term

Money Box: Bonuses

  • Make sure your spouse, parents and grandparents don’t prey fall to opportunistic vultures. Or are doing something egregious like investing in regular MFs, trying to time the DIP. Please get over yourself and talk money with them.

  • If you need a safety net, they need too. Don’t let them accidentally destroy their safety nets.

Career Safety Net

  • Read your employment contract for details e.g.

    • How much notice period do you have?

    • If you are fired on the spot, can the company delay salary?

    • Do you have a non-compete?

    • How were the people who left recently treated?

    • Reminder: Your ESOPs are not worth anything

Build some Network Capital

Build some Career Capital

In a recession you have 3 full time jobs:

  • Your day job, managing your finances unemotionally, figuring out where to go

Want more? Paranoid?

  • Figure out your monthly expense, instead of 6x’ing it, 12x it

  • Pay off your house rent in advance, negotiate to get a discount that way

  • Meditate. Lose your mind, lose your money. Maybe begin with Headspace or Calm.

  • Keep this split across at least 2 banks in India - 1 private like ICICI, one PSU like SBI, keep about 2 month runway in cash. To avoid YesBank situations.

  • Get a bank account without a debit card, and only cheque option to withdraw

Off the Record

Sometimes the best move is to not play the game at all.

For example, getting out of the country, even within the same country: moving from Bengaluru to Varkala can be a huge income saver for most techies,

You can also pause the “society” game to win: go into monk mode instead of going after girls, delay your arrange wedding, if married - delay kids by a year or two, etc.

Special thanks to Gokul Krishnan for suggesting an entire section, several insights and a very detailed review. Thanks Meghana Bhange for positive encouragement and feel good vibes!

  • in careers
  • 3 min read

Act Like You're 35

Don’t just network with people your own age

Beware the whiz kid syndrome. Smart, young people have a habit of forming communities of other smart young people and feeding off each other’s energy. Argghhhh. Are you not just making mistakes made by older people again? Make original mistakes

Youth enclaves can actually be restrictive. In fact their networking should be about meeting useful mentors and career champions who can open doors and fast track careers.

Some of the best functional leaders in India are now in their 40s. They built India’s telecom and Internet 2.0 (Flipkart, Amazon) and are looking for ways to give back. You at 20-something is ideal fire for them to light.

Learn to build a network. If you are in SaaS, Go to SaaS events.

Learn from your seniors at ChargeBee, CleverTap, Haptik, Freshworks, WhatFix, BrowserStack. Don’t be a moron on an island refusing help. Shout. Ask for help. If not, hustle.

Take the time to understand what your business does

I love the story of President John F. Kennedy’s visit to NASA during which he asked a cleaner what his job was. The cleaner replied that he sent rockets to the moon.

All of us should feel part of what we do at work. We might not have an exact wording or understanding yet. That is even better, we get to co-invent this on the journey!

Don’t wait for someone to tell you or lament that internal communication is crap. Find out for yourself.

Never sacrifice personal ethics for a work reason

If you work on something that compromises your personal ethics and values, get out of there as quickly as you can.

Good people will be unnerved by things that don’t feel right. If it doesn’t feel right, it probably isn’t. Bad things only manifest when good people don’t take a stand.

Most success comes from repetition, not new things

Malcolm Gladwell’s brilliant book Outliers, promotes the idea that you needed to spend 10,000 hours on something to become truly expert at it. This applied to the Beatles and their Hamburg gigs and Bill Gates who, through a series of fortuitous accidents, ended up spending more time than almost anyone else on a computer.

I want to call bullshit on that. People forget that Bill Gates was among the best mathematicians of his age. Mark Zuckerberg was among the top 20% programmers and psychologists and CEOs of his time. The best idea is to be a triple threat.

The lesson here is to get good at few (greater than one) things before you try to move to the next thing. Genuine expertise belongs to an elite few. They seldom have superpowers. They usually have endurance, patience and take a long-term view. They also love what they do. If you find that, don’t let it go.

In the workforce, always act like you are 35

A recruiter gave me this advice some years ago. It is quite inspired. What she meant was, when you are young in the workplace, don’t act as a novice. If you are smart and competent, step up and do whatever you are capable of doing in a mature way. Don’t be afraid to ask for help. Or help people aim for a higher quality.

Similarly, when you are an older worker, don’t act like it. Approach your day with youthful energy. To quote a famous Frank Sinatra song:

You’re 35 and it’s a very good year - "Frank Sinatra"

  • (Hattip Shane Rodgers)

End Notes

I barely follow 1% of this myself, and would consider it a major personal win to get to 5% in the next 10 years (when I’ll actually be 35).

If you think I can help you in anyway: making introductions to others as mentors, figuring what to do to unlock your potential, or how to grow - please know whatever you share with me, stays with me.

This is a contextualized essay, which riffs on and rips from:

Build your own playbook:

  • in careers
  • 2 min read

Thinking of Your Career as a Startup

Broadly speaking, it’s useful to think of your career as a startup.

Your profit+growth percentage should be a minimum 40%

So say, you join a big company like Microsoft and your skills grow at 20% every year, while your pay only grows 10% - that's bad.

You need to grow your skills and outcomes faster.

The other extreme is also fine: You join a small startup which can make great use of entrepreneurial DNA plus specific skills.

Your pay jump is 30%, and your skills grow only 10% - that is fine too

Your pay is profit. Growth is demonstrable skills growth.

Think of each career move as a Merger and Acquisition: Write a detailed document with the best reasons for making the switch.

Make the best argument possible. And then, red team it. Shred it to pieces.

I've done years where I grew by ~50% because of 15% pay jump and ~30% skills jumps - but doing it consistently is what matters. I’ve never done a 2-year streak of 40%+ growth in my career.

Most college graduates that I know - earn double of their starting pay at 30 years old. Which is effectively the growth rate of a fixed deposit. Fixed deposits are among the worst asset classes to invest in India.

  • Their gains come from savings and investments and the magic of compounding, not higher income alone
  • Your starting income should be high, or restart your career in some way e.g. moving to a new country

Charge more. Grow more

Assigning a % or $ value to your skills

The most common criticism of this approach is this: “I don’t know how to measure my skill growth - it’s intangible”

Saying something is intangible is a way of saying it has large error margins, it still has a minimum, median and a maximum.

Figure out all three, you don't need precision - you need worst case scenarios.

Look at any company's balance sheet: They've a "brand value" intangible and they assign a $$ value to it.

Millions of people pay millions of dollars for the Nike, Apple, Sony brand every year - it's a not a miracle.

The $$ values don't have to be precise. People always get lost in details.

I just ask them for the minimum, maximum and median - and people are like --- ohh, yeah, that makes sense - we can guess these with some work.

Do the work. Charge more. Grow more.

Mummy ka Raja beta, Nirant

Originally appeared at my newsletter