A few Fridays ago, my partner and I pulled out the spinach and artichoke dip leftovers (for the third time that week) and a bottle of wine and settled in to watch a documentary.
I scoured the internet for the top rated documentaries and found good reviews for Queen of Versailles, a documentary about a billionaire family building a massive, $70+ million McMansion, financed by their timeshare empire.
I was inspired, at first. This family worked their way to the top quickly, and while I don’t think I’d ever want to be a billionaire (mo’ money, mo’ problems!) it was interesting to know the methods by which they were successful in building up such a successful company.
The show quickly took a turn when it documented the situation around the financial crisis in the US, as the company relied heavily on borrowed “cheap money”.
The billionaires’ new house went into foreclosure and they went from having 25 nannies, housekeepers and other members on staff, to the father started having breakdowns when his kids left the lights on in the house.
Which brought me to the frightening realization that we’re not safe. None of us are.
False Sense of Security
Many people think that because they’ve worked for an organization for a long period of time, or because the economy is on the upswing, or because the company they work for is big, they have job security.
While there are certain professions and companies that have more job security than others, certainly nobody is guaranteed a job.
So, Should You Quit Your Job & Work For Yourself?
I notice a trend that whenever some individuals zone in on the fact that there’s no such thing as job security, they suggest that you quit your job and become self employed, because – after all – you’re not going to lay yourself off .
Relying solely on self employment income puts you in a very precarious position.
If the economy starts to tank (again), you don’t have any protection from it when working for yourself. If you are working for a company, they have to pay you! If you lose your job, you can collect unemployment insurance while you search for another. If you are working for yourself, you own the liability.
That’s not to say that you shouldn’t work for yourself, but you should be aware of this and ensure that you are protected in other ways (emergency fund, pay into unemployment insurance, diversify).
Protecting Yourself
No matter how many measures you have in play, none of us are 100% safe. There are too many external factors. But luckily, there are ways to protect yourself.
Historically, economies operate on a 9 to 11 year cycle. Every 9-11 years, in North America, the economy goes through a recession.
This is an important thing to know, so that you can plan for your future.
Think: when was the last recession? Is my career particularly vulnerable in a recession? If so, what am I going to do about it?
To protect yourself, you can do a bunch of different things:
Switch Careers
If you are working in a field that relies heavily on the success of the real estate market, and the market is going to tank sometime in the near future, maybe you need to look at switching directions.
Save, Save, Save
Maybe you’re the type that, instead of planning for a career change or to continue working, you would rather just save up enough money so that you don’t have to worry about anything happening to the economy. Maybe you want to retire early – or maybe just wait it out if something does happen and live off your savings.
Specialize
There has been a trend that a lot of the employees that we have that get laid off or let go don’t have a specialized focus. UIf you specialize, you’re more likely to be able to have job security. This may not work in all careers, but most.
Instead of being a general, Registered Nurse, get your ER certificate. Instead of getting a degree in Psychology, look at a specific branch of psychology. Don’t go for general education, work on finding something you’re good at and is needed.
Network
You know what they say – it’s not WHAT you know, it’s WHO you know. This is more true than ever in an unstable economy.
If you predict tough times ahead, jump on the networking bandwagon.
There are definitely more ways to protect yourself, or at least lessen the impact of economic volatility, but the point is that it’s super important to be aware and stay on top of it.
How do you protect yourself from financial ruin?
Im always prepared to be laid off tomorrow. I guess that’s just the way I be grown up. People talk about staying with the same company for 40the years, but I am not that naive. Honestly, its fun to have a few back up plans up my sleeve in case things go south at work.
I believe that there is no such thing as employment security may be it if employed or self-employed. But we can always prepare for ourselves like getting different insurance that will fit our needs and save money as much as we can when things are still getting smoothly.
I totally agree. No one is safe! Even though I have relative job security, I make sure to take the time to network regularly, and add new skills to my resume so that if I do lose my job, I’m highly employable. It’s kind of morbid, but it’s better than being caught unprepared!
I actually watched this a few weeks ago and it was fascinating! The wife seemed fairly normal for having so much money. They seemed overall like a pretty normal family, just one with a ton of money. But there were definitely lessons to be learned from them!
My company has yearly lay off churns. No one is safe. I am of the mentality that you should always be prepared.
I don’t understand how people don’t have savings. I know a lot of people call them EF, but honestly in my head I have always thought you should have savings for unexpected expenses.
I have found out through the PF world and talking to other people, most don’t have this savings. It makes me wonder what they spend their money on.
I try to go at this in two different directions. I specialize in a few things that many people are either not capable of doing or just don’t want to learn. I also branch out and work on my different side projects in order to generate income. It means a lot of work, but I want to try to stave off the issues that come with unemployment.
I’m looking forward to watching this film. It’s #3 on my NetFlix queue currently. I saw the light on networking when I was an advisor. While it was important to be an expert in my field, it was more important to know the right people. Today, if I wanted a job working for someone else, I can confidently say I’d have one in about twenty minutes….hopefully!
In the last 5 years, I have faced a surprise layoff, became a contractor with on and off contracts, updated my certification and am now in a stable job.
From this experience, I learned that nothing is secure and I should always be ready for change and emergencies. In response, I have achieved financial independence in only 5 years at 29, repaid my consumer debts and raised a portion of my emergency fund goal.
Good advise, Daisy! Norway has been booming financially the last couple of years, while rest of Europe is suffering, and I honestly think that it can`t last forever. One day our little bubble will blast, and then we`ll stand there unprepared. Or that is, everyone else will. Not me. I`m going to prepare myself for an economy that might get tough the next 10 years. Good thing I`m such a saveaholic! 🙂
I agree that quitting a job to work as a self employed really does put someone in a position that is far different than working full time. I don’t know if I could ever make a full move like that but hats off to those that do. In this economy no one is safe with their jobs but one thing I think that is important is to keep educating ourselves,get experience where we can, volunteer, network etc. Do what you have to do to build up your portfolio of life so you are always one step ahead.
For those who thought government jobs are the safest, take a look at this chart, compiled from the Bureau of Labor Statistics: http://bit.ly/kpfft
Job loyalty ANYWHERE is disappearing. Sad, but true. Your assessment of the economy going through a recession every decade or so is right on. The last bottom in the U.S. was 2009. The good news is we have a few years to prepare…
I really want to see that documentary – I’m so curious!
Spinach and artichoke dip!?!?! How random, is that all the rage over there in the States right now?
I’m not sure, I’m Canadian 🙂
I started networking for my day gig a few years ago and it took a while to get moving, but once I got my legs under me and showed people that I am trustworthy (key word “showed” and not “told”) it has been the single best career move I could have made. Good stuff.
Ooo I really want to see that doc!
The only certain thing is uncertainty! The whole point to saving money, having no debt, etc is to prepare for when the metaphoric rain will come. Because the rain ALWAYS comes. Spinach and artichoke dip is delicious btw!