Early Warning

Prologue

This is how I lost my future. One clear-headed, well-educated, middle class business-owner went 60 to zero in four months.

I’m a mid-pack Baby Boomer.. 1950, that’s me. Working class, suburban, California kid. My folks worked hard and stressed education as a ticket to a good life in America. I studied hard, worked to get myself through university (juggling part-time jobs) and emerged to build my future. I found good jobs, and by 28 I was consulting in San Francisco.

By 40, I had a many years of experience working for a big-name company. I’d built up a 401k, and bought a modest condo just blocks from the center of a wine country town.  I planned to own it forever. Surely I’d move on, move up and rent it out for retirement income.

That was when the first wave of economic woes hit. Property values were sunk, and  I was laid off. No problem, my Yankee ingenuity told me. I’m smart, I work hard, I’ll figure this out. I struggled for 2 1/2 years, even commuting back to San Francisco to consult again. Nearly upside down on the condo loaded with shame and stress, I heard the term “short sale” for the first time. At 46, I walked away, back to the San Francisco job zone, and a career shift into high-tech that has beginning to boom in the Bay Area. I paid off my debt and boosted savings and 401k again. Things were looking up.

By 50 I was making 6-figures and rising to VP level in a small firm. I missed the IPO bonanzas, but I didn’t implode in the 2000 dot bomb. I was heading toward the Golden Years with a fat retirement and savings and solid career track. Ready to buy a home again, the April 2002 market slide made me cautious. Shortly after, my firm closed. But I had a following and went out on my own, starting a firm with 3, then 6 employees.

I did well until, until the banks went bust … that’s when my BoomerRage started.

Boomerage – noun

2008, the writing was on the wall. Countrywide had cut the country wide open, and below the soft belly were more greedy demons to be paid in the big-bank-bail-out.  I grew more cautious as my contract size grew smaller and prospects fewer. I cut staff. My retirement investments were gutted like everyone’s. That’s when the greedy got stingy. Lenders put on the brakes. With a 50% cut in income, I could see a cash crunch coming and I was shocked to learn banks were not making small business loans.

By 2009 I lost another 25% income. I also pulled from my retirement investment for family medical expenses. Shortly after, my health premiums jumped 40%. While I bailed out the banks and paid my taxes, I cut the last employee and went for a small business loan to boost my business, get more customers. Once more, not lending.

That is when Boomerage went full-bore. Wasn’t that why we bailed out the (now profitable) banks? So they would lend?

Feb 2010, I lose ground fast. Health premiums rose another 20% when I turn 60. Unemployment hits nearly 10% (more in SF Bay area).  I can see my business dwindling again. But now I’ve gone through most of my savings, and I’m forced onto personal credit card to buy time and cash flow. For months I look for a permanent job and continue to search for new business, but I’m no one is hiring or starting new businesses. By July, the last of my start-up tech clients are acquired.

Now is when I begin to learn that I’m standing in a deep shadow of unemployed, along with thousands of other service professionals and small business owners. There are vast numbers of productive Baby Boomers; we still comprise 86% of the work force. A few million of us are self-employed. We’re the ones who hire and pay added taxes and are no small economic force. But we aren’t in the statistics of the unemployed. Few of us are eligible for unemployment benefits because only corporations pay into that tax. For most of us, no refuge exists beyond family and friends and savings. In 2010, bankruptcies continued to rise, and among them growing numbers of architects, builders, contractors and dependent small businesses, like restaurants and suppliers, hardware stores and business service centers. There are millions of stories, one for each of us.

This is my American story: a mid-life slip-and-fall of a middle class Boomer. As the slide from economic contributor to poverty goes, so goes the middle class and this will not go well for the nation.

I recount events now, as I hear President Obama’s 2nd State of the Union address, full of promises to support corporations and business and restore jobs. No recognition or aid for the 1-10 employee businesses who pay the taxes to recover the big banks and corporations: too big to fail.  These are notes from the Boomer’s edge. Time will tell how many of us go over the edge in 2011, as the US goes trillions more into the red.

Day 1

October 1, 2010

My first month without income. I have $4400 in the bank and $2000 in a money market and 15+ years of experience in my current profession. I’ll make this work. By year-end, I’ll have a job. I will survive. I crank up my resume machine, and start my online search. Tomorrow will bring new options. I am hopeful, if nervous.