Be glad that you live in LA and not in Detroit. Neil Cavuto said today on Fox News that his definition of an economic depression was unemployment at 25%. Which means that I have personally experienced TWO economic depressions in my life, plus a hard recession in Cleveland in 1990. From late 1981 through early 1983, unemployment in metro-Detroit (an urban area of 4.5 million people where I lived for my first 25 years) was 25%, and it is higher than that there now. 50 miles to the north of Detroit, the city of Flint, MI is experiencing unemployment of over 40%, and nearby Saginaw, MI is almost as bad. We are talking a region of the US 150 miles by 75 miles with nearly 30% unemployment among its 5.5 million residents. Cleveland, OH is at 20% unemployment and Buffalo is about as bad. Chicago, Milwaukee, and Grand Rapids, MI have all been in double-digits in unemployment for several years now. The chance of selling your house there if you get laid-off is damn near zero. And there is the chance that all three of our domestic automakers could go under by the time that our current economic problems subside, throwing millions more people out of work. You look at the collapse of stock values at the start of the Great Depression and there were a lot of stocks that collapsed from the $60-$100 range down to the $1-$2 range in a year's time.
They wonder why nobody is jumping back into the markets now that stock values are at historic lows. The fact is that many to most investor's confidence is shot and many people just don't have any money left to gamble with. Even here in Colorado, where our unemployment is only 5%, our casino revenue is down by half since 15 months ago, and restaurants are hurting for business on what were busy nights just a year ago. Even the largest casino project under construction in Vegas just had to shut down when their credit line was yanked recently, throwing 1000 construction workers off of the job times 3.5 in service and support industries.
So what do you do? Work and worry yourself into an early grave trying to be one of the most valuable people at your company? Been there, done that. Try to network with other companies in your industry or in related fields to try to discover their situations and any possible openings? Diversify and try to pickup almost any part-time position so if worst comes to worst you might be able to move into more hours there? While you are still working, cut your spending and try to pay down debts?
I'm 51 and on a long-term medical leave getting 40% of what I used to earn. I'm hoping to return to work but my employer (a company of 200 employees) has lost half of their business since Christmas. Guys with 2 years on the board are averaging two weeks of work every five weeks, though I have 8 years there. And my boss had a penchant for buying new equipment then working it to death. Without credit to buy new equipment with, the equipment is getting old quickly. I hope that they are still around come next Spring when my leave is over.
Wish that I could be more positive. Just yesterday I was talking to Robbie Brown about giving it all up, selling out, and trying to buy outright some land and a cabin in the mountains. Then I could make do with a lot less if I didn't have a $1500 monthly mortgage payment. Canton, OH, Marion, IN, and Altoona, PA are really inexpensive towns too, where you ought to be able to buy a house outright for $50K-$75K, then live a relatively good life off of whatever equity you have left combined with your part-time income from working at 7-11 or Super Walmart. Maybe you could even buy some little business, like a liquor store or a tavern to support yourself with.
This is one of life's critical questions. Do you take the chance now while you still have the money to do so, or do you consume yourself with worry and stress, and end up with next to nothing if things go terribly wrong? I wouldn't make the decision right away, though right now would be one of the best times ever to buy property at a distressed price. I don't know your age, but at my age I'm still 10.5 years away from half of my Social Security, so if worst comes to worst, I have got to do something before that happens.
Keep your fingers crossed, explore other options and try to make some other connections, figure-out what your needs are and what you could live with, and take a serious look at what kind of life you could live if you bought it outright while you still have the funds to do so and there is still a chance of selling your house.
Just last week I saw a 10 acre old mining claim on the side of a mountain, half treed, with a seasonal stream and a smaller old gold mine on the property, 300 feet from a County road and power, and just 5 miles outside of Cripple Creek, which includes mineral rights and without restrictive covenants, for $33,500 outright. There would be the possibility of generating wind power and several possible pond sites, and a dirt access road is already in. My wife is already thinking an adult hot-tub cabin resort. I'm worried about the growing season at 9000 feet elevation if we have to grow vegetables. But there are plenty of other possibilities out there right now too. I've got about $100K if I can sell my place to work with, plus $35K in retirement funds if the need to withdraw them arose.
Keep your head up, Paul. I know that the prospects are dimming every day lately. I know that it isn't fun to lose everything that you've worked for because I have been there several times already. But try to think of what is still possible instead of worrying too much about what might not be possible if....
"We stay here, we die here. We've got to keep moving". Trucker Mark