Is It Wrong To Strive For Job Security?
|June 4, 2010||Posted by Roshawn Watson under Uncategorized|
By: Roshawn Watson
Suppose you have a job that you like but is grossly underpaying you. What is the correct response? You certainly have a lot to think about because working is not all about the money, right? For example, this job could help you reach your potential and be the spring board into a brilliant new career. Having a low paying job that expands your skill set, knowledge base, or network certainly could have a role in your career plan. However, you also have a responsibility to your family and your own financial well-being. Many of us are striving for job security while simultaneously diminishing our likelihood of becoming financially independent and paradoxically becoming less secure as a result.
Where’s My Safe, Secure Job?
Often when money is involved, people want to “feel safe and secure.” A solid job seems to be new graduates main goal. However, some companies hire and fire employees with the bat of an eye. Although this is scary, it is the world in which we live. Becoming a valuable asset to an institution may not be a choice if we want to keep our jobs or advance. If fear of losing your job is driving you to become indispensable, then you have a good outcome even if you have the wrong motivator.
Here’s why. As I already iterated, job security has changed. Staying with the same company for forty years is unfortunately a thing of the past for many. Job security in today’s volatile market often means something entirely different: the only true job security is our abilities to get other jobs. This isn’t to say that we shouldn’t be loyal to our employers but to emphasize that we have to mind our investment portfolios and stay marketable. Financially speaking, putting all of our eggs in one basket is extremely risky. We can’t fall into the trap of thinking that everything will miraculously work out just because we do a good job and have a livable salary. A financial plan that only works if everything goes perfectly is not much of a plan at all (more like wishful thinking). A good plan must make allowances for undesirable events, including a job loss.
It’s Only an Illusion
Even if a job loss isn’t in your future, what keeps people at lower paying jobs? Typically, this is where people spew out a lot of reasons, such as passion, favorable working hours, a stimulating job environment, all of which are completely valid reasons in my mind. Surprisingly, I don’t see money as a main motivator for choosing a job, as long as the job provides a reasonable wage. The reason is that income from a job can only take you so far with respect to achieving financial security and more importantly financial independence. Thus, you’ll be a lot happier and more productive if you choose something that you enjoy. Just yesterday, my boss commented on how excited I was regarding the recent data I collected. If your job doesn’t bring you any contentment and pays poorly, that is a real problem. One reason people don’t choose jobs from which they derive pleasure, have advancement opportunities, and earn a reasonable wage is because of fear over loss of security.
The first problem with this fear over loss of security is that is that such security is hardly even worth it if you are miserable, stuck, and broke. Secondly, you are sacrificing your family’s financial-security for your illusion of job-security. In doing so, you likely missed several opportunities that could have dramatically changed your financial life. You played it “safe” while your financial solvency is at the whim of an employer. That’s not too wise in many cases. I know what it is like to suddenly lose over 80% of my earned income in one month and not have to worry about meeting financial obligations. That’s the power of not basing your financial well-being on a job. Believe me, you will be a lot more secure once this concept becomes your reality.
Win the Battle But Lose the War
Even if you get the higher salary, that in itself won’t automatically change your financial destiny. This is the sad truth. Whether you make $40,000 per year or $400,000, you can still be broke. I can point you to stories of thrifty engineer’s making no more than $50,000 per given year dying with millions in the bank and point you towards people who make hundreds of thousands per year and still feel financially stretched. A low income doesn’t doom you to financial obscurity just as a high income doesn’t give you financial intelligence nor guarantee financial security. In fact, few people who have high incomes become financially independent, at least before retirement age. Additionally, fewer than ten percent of people ever reach an affluent level of income during retirement. Getting a hefty income is great, but don’t assume that the income alone will guarantee you financial success.
Information Make Your More Secure
Your true financial leverage typically lies not in what you can convince a banker to lend you but in what you know. Never underestimate the value of intellectual capital. For example, one of my mentors runs a small business and got very sick a few years ago, so his doctors told him to stay home. During this time, the gross annual revenue of his business was $4 million. He got very scared because he is a very hand’s on operator and is the key proponent to his business’s success. He kept his involvement in his company to an absolute minimum and didn’t even leave his house for the next three months. This is remarkable because he doesn’t have the kind of business that lends itself to being run from home. However, through the sickness, he learned a completely different way to operate his business. That same year, his small company increased its revenue to $20 million and hasn’t looked back since.
Another example illustrates this point even better. I have been impressed with John Paulson for the last 18 months. He is a hedge fund manager who built his own fortune and then taught himself the complex world of mortgage-backed securities. He read the writing on the wall and decided that there was a real estate bubble that wouldn’t continue. He created a package of distressed and overpriced assets and distributed it through Goldman Sachs to sophisticated investors who failed to do due diligence in evaluating the deal. Paulson’s financial interests ran contrary to the investment deal he set up, and his “gamble” paid off handsomely to the tune of billions for him personally and tens of billions for his hedge fund. That’s the power of intellectual capital. It sets you apart even from the very wealthy who refuse to gain this type of leverage.
Remember that there is certainly nothing wrong with job security, but financial security is a much more pragmatic goal. Financial independence will give you freedom to pursue your passions like never before. Finally, the more you increase your content and the paradigm with which you view your finances, the safer you will ultimately be.
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Copyright 2012, Roshawn Watson, Pharm.D., Ph.D. All Rights Reserved.