Robert and Kim Kiyosaki teaching at the 3-day event

Is There Really Such a Thing as Job Security?

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

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.

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

The problem is 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 “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 on 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, I want to wish you congratulations. I also want to offer 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 safe, 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.

I can understand the allure of what appears to be security, 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.

Naturally, you might view this as the risky way, but it’s not.

The really risky side

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

On the left side of the quadrant, are employees and the self-employed (those who sell their time and skills like consultants). On the right side are business owners and investors. Those on the left side of the quadrant are at the most risk because they have no control and lose the most money to taxes and inflation. Those on the right, 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.

I still have some friends who seek security as employees or self-employed, the left side of the CASHFLOW Quadrant. As mentioned, I believe that side of the quadrant is actually the riskiest side. If people could see what I see when I travel the world, they would not be looking for more security. 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. As I get older, I meet more self-employed people my age who are physically, mentally, and emotionally burned out from hard work. 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. My thoughts have been, 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 I believe there will be, 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. From my point of view, all the risk is on the left side of the CASHFLOW Quadrant.

If you want to learn how to move from the left side of the CASHFLOW Quadrant to 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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