Blog | Entrepreneurship

Is There Really Such a Thing as Job Security?

Why being an employee is the riskiest thing you can do in today’s economy

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  • The myth of getting a stable job is no more - it’s time to make your own security

  • Entrepreneurship is the best way to have control over your financial future

  • The key to job security is moving to the right side of the CASHFLOW quadrant

This is the time of year when young people are graduating from college and getting ready to enter into the workforce. Without a doubt, most of the new graduates out there are hoping to find their first job and start their chosen career.

In fact, Simply Hired conducted a study just over 10 years ago and reported that 33% of college graduates listed “job security” as their top priority. Tied for second were “salary,” and “healthcare or other benefits” at 23%.

They most likely have been told that the road to a secure financial future is to go to a good school and focus on job security.

Unfortunately, that advice is not only bad but also financially dangerous.

No raises for you

You’ve heard the term “job security.” Job security is a myth. It’s a nice sentiment from a different age. The reality is that to be an employee in today’s economy is to be in the riskiest position of all.

In a 2018 “rare, candid and bracing” talk, news source Axios reports that executives at top U.S. companies got honest about the financial outlook of their employees. “The message is that Americans should stop waiting for across-the-board pay hikes coinciding with higher corporate profit; to cash in, workers will need to shift to higher-skilled jobs that command more income.”

In the talk, executives discuss how they plan to fire many of their employees and replace them with automation. They also say that the days of getting a cost-of-living raise are gone. Instead, the most irreplaceable of employees will see any increases—until they are replaceable too.

The message couldn’t be clearer. Don’t expect more money, and be glad you even have a job. This despite many corporations enjoying record profits.

The “good grades, good job” myth

To those who are just now graduating from college, and who probably worked hard to get good grades so that they could get a good job, you deserve a “congratulations.” You could also probably use some free advice:

Don’t bank your financial future on working for someone else.

Today many people have gotten good grades, but there are fewer and fewer secure jobs, and even fewer with benefits like pensions. Many people, even those with good grades, need to “mind their own business” and not just look for a job where they will mind someone else’s business.

The allure of what appears to be security is understandable; but as you see from the executives of our biggest companies, there is no job security. Instead, you need to learn to make your own way in the world.

A secure future means entrepreneurship, not employment.

At some point, it dawns on every employee (probably while slaving away at their desk well past dinner one evening), that they aren’t in charge. When you work for a company, you simply aren’t in the driver’s seat. You work the hours they assign. If you’re lucky, you get a raise or a promotion when they allow it to happen. You get access only to the resources they provide. You get stuck with the team they hire. You get vacation time when they approve it. And you could get fired or laid off with no notice.

That perspective might make you think twice about the so-called job security you’re “lucky” to have as an employee. Why would you let a money-hungry company determine your value, your worth and your future?

Possibly because you might view the alternative as being risky.

The really risky side

The CASHFLOW Quadrant is a simple diagram used to teach people about how wealth is generated (and lost) in today’s world of money.

To be financially free, you must move to the right side of the CASHFLOW Quadrant.

First, here’s a quick rundown:

  • Employee - As an employee, you exchange your time and your effort for income. If you’re not working, you’re not getting paid. Your security is 100% at the hands of your employer, no matter what you contribute.

  • Self-Employed- While being self-employed, you work for yourself, and may eventually see a result of the time and effort that you put into your work. Flexibility and freedom are still not necessarily attainable here. Where as an employee you “have” a job, as a self-employed person, you simply “own” a job.

  • Business Owner - As a business owner, you’ll have a business that generates passive income. You will see a direct result of your time and effort, and your income doesn’t rely on active work. Here, you also have the ability to determine the fate of your future. You may even have people working hard for you to generate an income!

  • Investor- Finally, as an investor, the only thing working is your money. You’re on a golf course. Enjoy that.

Those on the left side of the quadrant, employees and self-employed, are at the most risk because they have no control and lose the most money to taxes and inflation. Those on the right, owners and investors, even though they are traditionally viewed as the riskiest, are actually the most secure because they do have control and can use taxes and inflation to their advantage.

Here’s the truth: security is a myth. The trajectory for employees’ incomes is not good. And when there are bad economic times, it’s the employees who lose their job, not the business owners. Learn something new, and take on this brave new world. Don’t hide from it.

It’s also risky for the self-employed. If they get sick or injured, their income is directly impacted. The more fatigue a person endures, the less secure they become, and the risk of having an accident also goes up.

As the march of technology like automation continues at an ever-increasing pace, employees and the self-employed have to constantly be trained to keep up and stay relevant in the job market. Look at it this way: if you’re going to reeducate anyway, why not spend some time educating yourself on the skills needed to become a business owner or investor—the right side of the CASHFLOW Quadrant.

The really secure side

The irony is that life on the right side of the Quadrant, the one viewed by most people as more risky, is actually more secure. For example, if you have a secure system that produces more and more money with less and less work, then you really don’t need a job or need to worry about losing your job. To make more money, you simply expand the system and hire more people. That gives you the opportunity to expand your means so that you can enjoy all that life has to offer.

People who are high-level investors aren’t concerned about the market going up or down because their knowledge allows them to make money in either situation. If there are market crashes for the foreseeable future, which isn’t entirely unlikely, many baby boomers will panic and lose much of the money they had for retirement. If that happens in their old age, instead of retiring, they’ll have to work for as long as they can. How is that security?

Professional investors are people who risk little of their own money and yet still make the highest returns. The people who know little about investing take the risks and earn the least return. In short, all the risk is on the left side of the CASHFLOW Quadrant.

Create your own job security

With self-employment, you can diversify your client base in a way that provides the job security you need to sleep well each night — if you happen to lose a client, you still have others that will keep the money rolling in while you look for a replacement.

Entrepreneurship offers a virtually unlimited income potential, because you can drum up more business if you need more money. You also set your own prices, which means you can charge what your time and expertise are worth in the market.

Once your business is booming, you can cherry pick which clients you want to work with and avoid the ones who are difficult or don’t pay you on time — you’ll never again be in a position where you have to endure something that frustrates you, or threatens your livelihood, because you control the direction of your business. This is true job security.

Job security is all about you!

If you want to learn how to move from the left side of the CASHFLOW Quadrant to the right side, today is the day to start. Increase your financial education, expand your mindset, and see the opportunities before you. Start investing in your financial security today.

Original publish date: May 29, 2018

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