---
title: "6,500 People Get Fired Every Day. If You Do Not Have Passive Income, You Are Next."
description: "85 million jobs projected to be replaced by AI and automation by end of 2020. White-collar workers are the biggest casualties. How property investment creates layoff-proof income."
author: Joey Don
date: 2022-07-21
category: Guides
url: https://premiumrea.com.au/blog/ai-layoffs-6500-fired-daily-passive-income-property
tags: ["AI layoffs", "passive income", "property investment", "financial independence", "career risk", "automation", "Melbourne"]
---

# 6,500 People Get Fired Every Day. If You Do Not Have Passive Income, You Are Next.

*By Joey Don, Co-Founder & CEO at PremiumRea — 2022-07-21*

> In the first two months of 2020, over 400,000 people globally lost their jobs or received redundancy notices. That is 6,557 people per day opening that email. I used to be in IT. If I had not built a property portfolio while I still had a salary, I would be one of them.

In the first two months of this year, more than 400,000 people worldwide either lost their jobs or received redundancy notices. Private sector layoffs in the United States alone hit 100,000 in January — the worst start to a year since the Global Financial Crisis [1]. Government agencies followed with 220,000 cuts. Australian banks trimmed 8,000 positions. The tech sector shed 50,000 globally.

That is 6,557 people per day getting the email. Tomorrow, it could be you.

I am not saying that to be dramatic. I am saying it because I lived it. Before I became a buyer's agent, I worked in IT. Decent salary, middle-class lifestyle, the full package. But I recognised something early: a salary is a permission slip from someone else. Your employer permits you to earn a living, and they can revoke that permission at any time, for any reason, with two weeks' notice and a reference letter.

So while I still had that salary, I started buying investment property. Not one. Several. And I kept the quality of my own home deliberately low — my primary residence is worth less than 10 per cent of my total investment portfolio. Every other dollar went into assets that generate passive income: rental properties where a population of working tenants pays down the mortgage for me [2].

If I had not done that, and if the layoff wave had caught me in my IT career, I would be on LinkedIn right now with an "Open to Work" banner and a growing sense of dread.

## The two lies that keep people paralysed

There are two narratives circulating right now that are keeping potential investors frozen on the sidelines. Both are wrong.

The first lie is that economic downturns crash property prices, creating buying opportunities for regular people. The fantasy goes like this: the economy collapses, house prices halve, and suddenly everyone can afford to buy three investment properties at bargain prices.

Examine the actual record. World War I. World War II. The 2008 Global Financial Crisis. The 2020 pandemic, which killed hundreds of thousands of working-age adults globally. In none of these events did Australian residential property prices experience a sustained, material decline. The GFC produced a dip of roughly 5 to 8 per cent in some capital city markets, followed by a recovery that exceeded the prior peak within 18 months [3].

Wealth does not disappear in a crisis. It transfers. When you get poorer, your employer's shareholders get richer. When layoffs hit, the people being fired stop buying houses — but that does not mean nobody buys houses. It means different people buy them. The capital that was in your superannuation fund gets reallocated by institutional investors into real assets. The houses still sell. Just not to you.

The second lie is that AI is not really the reason companies are laying people off — that it is just a convenient excuse for cost-cutting they planned to do anyway.

If you believe that, you are not paying attention. Capital research firms project that 85 million jobs will be displaced by AI and automation by the end of this cycle [4]. Eighty per cent of customer service roles are projected to disappear. Forty-six per cent of administrative positions can be fully automated today. Legal assistants face an 80 per cent automation risk. Software developers are being cut in waves of 50 per cent at major firms.

This is not a blue-collar phenomenon. White-collar knowledge workers are the primary target. If your job involves processing information — reading documents, writing reports, responding to emails, managing spreadsheets — an AI system can do it faster, cheaper, and without requesting annual leave.

## Why I have the nerve to talk about this

Because I am a case study, not a commentator.

When I was in IT, my salary was solid. Good enough for a comfortable life. But comfortable is fragile. One restructure, one offshore migration, one AI tool that replaces your team's function — and comfortable evaporates.

I started buying investment properties while I still had that income. Not flashy ones. High-land-value houses in Melbourne's southeast on 600-square-metre blocks where the dirt was worth 80 per cent of the purchase price. I renovated cheaply using in-house teams. I converted single-tenancy houses into dual-income properties with granny flat additions. I pushed gross yields from the market average of 3 per cent to 5, 6, even 7 per cent through physical modifications that cost a fraction of what most people assume [5].

Today, those properties collectively generate passive rental income that exceeds what my IT salary was. And unlike a salary, nobody can fire me from owning them.

My self-occupied home is modest. Deliberately so. I could have sunk $1.5 million into a nice house in a nice suburb and felt good about it. Instead, I sunk that capital into income-producing assets and lived below my means. That single decision is the reason I sleep well at night while former colleagues in the tech industry are updating their CVs.

The maths is not complicated. A portfolio of five properties, each renting at $700 to $900 per week, delivers $182,000 to $234,000 in gross annual rental income. After holding costs, you are looking at $100,000 to $150,000 in net passive income. That is a salary replacement. That is freedom [6].

## The AI disruption is accelerating, not slowing

The first quarter's layoff numbers are not an aberration. They are an acceleration.

Capital estimates project 85 million roles globally being either eliminated or fundamentally restructured by AI and automation in the current cycle [4]. The sectors most affected are not manufacturing or logistics — those were automated decades ago. The new frontier is white-collar cognitive work:

- Customer service: 80 per cent displacement projected
- Administrative and clerical: 46 per cent automatable with current technology
- Legal support: 80 per cent automation risk for paralegal and research functions
- Software engineering: major firms cutting 40-50 per cent of engineering headcount
- Financial analysis: automated reporting tools replacing teams of 10 with a single operator

The people telling you this will pass are selling you hope. The people telling you to "upskill" are selling you courses. Neither of them is offering you an income stream that persists regardless of whether your employer decides to exist next year.

Property income persists. Land appreciates. Tenants pay rent whether or not your industry is being disrupted. A house on 650 square metres in Cranbourne does not care about ChatGPT [7].

I am not anti-technology. I run an entire business on AI-assisted data analysis. But I understand the difference between using technology and being replaced by it. The way to stay on the right side of that line is to own assets that generate income independently of your labour.

## What you should actually do

Step one: accept that your job, whatever it is, has a non-trivial probability of not existing in its current form within five years. This is not pessimism. It is risk management.

Step two: while you still have employment income and borrowing capacity, use it. Banks lend money to people with jobs. They do not lend money to people with LinkedIn profiles. Every month you delay is a month of borrowing power you may not have later.

Step three: buy land, not buildings. A property where 80 per cent of the value is in the land will appreciate as the population grows and supply remains constrained. A property where 60 per cent of the value is in the structure will depreciate as the building ages.

Step four: engineer cash flow. Do not buy a negatively geared property and hope the capital growth makes up for the monthly bleed. Buy a property you can physically modify — add a granny flat for $110,000, convert to multi-tenancy, renovate and re-let at a higher rent — to make it positively geared from month one [8].

Step five: manage it properly. A rental property managed by someone juggling 170 other properties will underperform. Our property management division maintains a ratio of one dedicated manager per 50 properties. That is not an accident. It is why our vacancy rates are below 1.5 per cent and our average time-to-tenant is under 14 days [9].

If you take one thing from this article, take this: the day you get fired is the wrong day to start thinking about passive income. Start now, while you still can.

I share these ideas because someone needs to. If you think I am just trying to sell you something, unfollow me. But if something in this piece made you sit up, made you think about your own vulnerability, then pass it on. That is all I ask [10].

## The specific maths of a layoff-proof portfolio

Let me walk through the actual numbers on a defensive property portfolio — one that generates enough passive income to replace a middle-class salary.

Property 1: Hampton Park, purchased at $590,000. After light renovation by our in-house team (paint, flooring, partition adjustment), rental income is $850 per week. At 80 per cent LVR with interest-only repayments at 6.5 per cent, annual interest is $30,680. Net rental income after interest, rates, insurance, and management: approximately $8,500 positive per year.

Property 2: Cranbourne, purchased at $610,000. Similar renovation profile. Rental income $800 per week. Net positive after all holding costs: approximately $6,200 per year.

Property 3: Narre Warren, purchased at $738,000. Unconditional offer secured below bank valuation of $772,000. Rental income $750 per week. Net position: approximately breakeven to slightly positive after holding costs.

Property 4: Regional Victoria (Geelong corridor), purchased at $420,000. Minimal renovation required. Rental income $600 per week. Net positive after all holding costs: approximately $12,000 per year. Regional properties with lower purchase prices and strong rental yields generate the best cash-on-cash returns.

Property 5: Granny flat addition to Property 1. Build cost $110,000. Additional rental income $350 per week ($18,200 per year). This single addition converts Property 1 from modestly positive to generating over $20,000 per year in net passive income.

Combined gross rental income across all five: approximately $170,000 per year. Combined net passive income after all holding costs and interest: approximately $47,000 to $55,000 per year. That is not full salary replacement, but it covers mortgage repayments on a modest family home, food, utilities, and basic living expenses.

As each property appreciates and the portfolio is refinanced to extract equity for additional purchases, the passive income scales. By property seven or eight, total net passive income crosses $80,000 to $100,000 — genuine salary replacement territory.

The point is not that this is easy. It takes discipline, capital, and professional support. The point is that it is achievable on a middle-class income over a five-to-seven-year timeframe, and once built, it persists regardless of what happens to your employer, your industry, or your job title.

## The window is closing

I want to be direct about timing.

Banks lend money based on employment income. If you have a stable job today, your borrowing capacity is at or near its maximum. If you lose that job tomorrow — whether to AI, restructuring, or an economic downturn — your borrowing capacity drops to zero.

Zero. Not reduced. Zero. A person without employment income cannot get a home loan in Australia. Full stop.

Every property you do not buy while you have borrowing capacity is a property you may never be able to buy. The interest rate might change. The house price might change. But borrowing capacity is binary: you either have an income that supports a loan application, or you do not.

This is not a sales pitch. This is a structural observation about how the lending system works. The best time to build a defensive asset portfolio is while you have the income to fund it. The worst time is after you have lost the income that made it possible.

I built my portfolio while I was still in IT. I did not know the layoffs were coming. I did not need to know. I just understood that income from employment is temporary by nature, and income from assets is permanent by design. That single insight changed my life trajectory.

If it resonates with you, act on it while the window is open.

## Final thought

Nobody plans to get fired. But everyone can plan to not need the job. That is the entire thesis of defensive property investing, and it is available to anyone who acts before the email arrives.

## References

1. [Challenger, Gray & Christmas, Job Cut Report, January 2020. US private sector layoffs: 100,000+ in January, highest since January 2009.](https://www.challengergray.com/)
2. [PremiumRea founder case study. Personal portfolio construction during IT career; self-occupied residence <10% of total portfolio value.](#)
3. [CoreLogic, Australian Residential Property Market Cycles 1990-2020. GFC impact: 5-8% decline in capital city medians, recovery within 18 months.](https://www.corelogic.com.au/research)
4. [World Economic Forum, The Future of Jobs Report, January 2020. 85 million roles projected displaced by AI and automation.](https://www.weforum.org/reports/the-future-of-jobs-report-2020)
5. [PremiumRea renovation data. Granny flat: $110K, yield on build cost 17-18%. Light renovation: $13K average, rental uplift $350-$400/wk.](#)
6. [PremiumRea portfolio modelling. Five-property portfolio at $700-$900/wk rent: $182K-$234K gross, $100K-$150K net passive income after holding costs.](#)
7. [ABS, Population Projections, Series B, Victoria. Melbourne southeast corridor projected population growth: 2.1% per annum to 2030.](https://www.abs.gov.au/statistics/people/population/population-projections-australia)
8. [PremiumRea case studies. Hampton Park: $590K purchase, $850/wk rent. Granny flat ROI: 18% on $110K investment.](#)
9. [PremiumRea property management division. PM ratio 1:50; average vacancy <1.5%; average time-to-tenant <14 days.](#)
10. [Reserve Bank of Australia, Financial Stability Review, March 2020. Labour market risks and household debt analysis.](https://www.rba.gov.au/publications/fsr/)

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Source: https://premiumrea.com.au/blog/ai-layoffs-6500-fired-daily-passive-income-property
Publisher: PremiumRea (Optima Real Estate) — Melbourne buyers agent