By Grace Agada
There are two smart things to do when your source of livelihood comes from an income that is uncertain. The first thing is to move your source of livelihood to a more reliable source of income that is within your control.
And the second thing is to move the income earned from the uncertain source to a source that is more certain.
The solution to the first option is to start and grow a successful business. But not everyone can do this right away and it takes time to get a business to the success level. The solution to the second option is to secure a certain amount of the income you earn from the uncertain source. And to put this amount in a secure source that is more certain and within your control. This is the faster option and a great option to explore for most people.
To achieve solid income security you must use your active career time well. And the best way to use your active career time is to work hard at working less and to build a solid income security for yourself.
What is Income Security?
Income security is the ability to thrive and sustain ones living standard regardless of a job.
Work as we know it today is changing and uncertainty of a job income is increasing. There has been several downsizing, salary slashes, layoffs and so on. The truth is the insecurity in the job market has tripled. If you do not have a system that shield you in the days of uncertainty, your pain will be extensive. While we pray that nothing bad happens to your job, we cannot rule out the possibility of it happening someday.
You cannot guarantee your job security neither can your employers or the government, and here is why. Job security is not in the hands of your employer. Job security is in the hands of customers. When customers patronize businesses, organizations make money and are able to keep jobs intact. But when consumers are scared to spend and hoard money, organizations must trim down jobs to stay alive.
Additionally, organizations are realizing that certain job roles are no longer important for their survival. They are also shifting from the traditional workforce model to an independent and remote workforce model. The only way to protect yourself long-term from the hammer of a job loss is to secure the one thing that makes a Job important to you – Your Income.
The new job security is, thus, now about income security. That is the ability to keep income flowing even when a job dies. This is important because a job is a short-term need while income is a lifetime need. While you may survive without a job, you cannot survive without income. So the wise thing to do is to pursue income security and not job security and separate your income from your job.
How to create Solid Income Security from Uncertain Income
To create solid financial security from uncertain income you must answer the question, ‘What would it take for me to never worry about my job again?’
To answer this question and eliminate job security worries there are three things you must do. The first is, you must increase your savings ability. Second, you must create new income sources within and outside your employment. And third, you must separate your income from your job and create an independent income security for yourself.
Increasing savings ability
The first is to increase your savings ability. To create income that is free from job loss you must save a sizable portion of your income each month. The average employee saves 5-10% of their income every month. This is a lazy way to save. Saving this way will only extend your years of hard labor. The most successful people I know save 40-50% of their income. They are able to achieve financial security fast, exit the corporate world and pursue their dreams. To increase your savings you must save on your purchases. You must also reduce your expenses by creating a low maintenance lifestyle or an economically efficient household.
If you keep saving the way you have always done financial security may be far away from you. For example it takes 10years to save 12 months of your current incomeif you save just 10% of your income. How many more ten years do you have in the corporate world? Approaching savings this way is getting rich never. Without the discipline and commitment to save above average, financial security is out of reach for you.
The second thing you must do is add new sources of income to your existing income. And there are two ways you can do this. The first is to earn more income within your current job. The second is to find new sources of income outside your job. Earning more income within your current job is important because you spend over 75% of your time on your job.
Most people do not even have extra time for anything else. This means they can only invest just a small fraction of their time in other side income and this limits their opportunity. Thus the focus on one’s job makes sense.
To earn more income from your job you must become a problem solver. Every organization has three major problems they are willing to pay someone to solve. The first is the Revenue – Organizations want continuous, low cost and predictable revenue. The second is savings – Organizations want to save more money. The third is Time – organizations want to save time and speed up operations.The closer the problem you solve is to these three areas the higher your chances of earning more income from your employment.
You can also earn more money from other sources of income outside your job part-time. You can earn passive income through your investments and you can earn income from a side hustle. The key to success with side hustles is that it must have the power to give you the freedom that you seek and must be able to do so within the shortest possible time.
Adding passive income from your investments and a side income from your side hustle can boost your savings dramatically.
If you want to know more about the attributes of the most effective side hustle that you can make you rich send an email to [email protected]
The third thing you must do is separate your income from your job and create an independent source that is secure, interest yielding and within your control. You do this by investing your saved income in an interest yielding investment account and building this investment until it can carry the weight of your bills and sustain your living standard for a few months.
The length of income security you build is dependent on the amount of time it will take you to bounce back in the event of a job or income loss.
Funding your life from an uncertain source of income like salary is choosing to suffer financial stress for the rest of your life. Your goal as a smart employee is to create a life that thrives regardless of salary. Because only then can you truly be free. There is no job security anywhere. The only security that exists is the one you create for yourself today.