I hate my job…I can’t wait until I retire…I’m going to save and invest every dollar I have so I can quit my stinkin’ job…I wish they’d lay me off and give me a severance package…
Do you ever find yourself thinking this way? Most people do. Ironically, it’s probably the number one reason motivating people to save and invest their money—planning their great escape from the job. That’s not a bad thing either, but maybe we need some balance.
Your career is an investment all its own; consider the following:
- Your career is what sustains you until the day you can afford to retire
- You’ll probably live on the income from your job a lot longer than you’ll live on the income from your investments
- You need money to invest—that will mostly come from your career
- Your career is the foundation upon which all other investments will be made
- If your career isn’t working, your investments probably won’t either
And there are a few more considerations that rate their own discussion…
Very few people have enough money to not work
Millions of people work diligently to save and invest their money. But relatively few will reach a point of being able to live completely off their investments, at least not before retirement. And even then, most will continue to rely on non-investment income for some significant portion of their survival. That may be Social Security benefits, an employer pension or continuing income from a job or business.
Your career is a diversification to your investment portfolio
There’s nothing scientific about investing. Stocks, commodities and real estate both rise and fall in price, and sometimes they can even crash. Fixed income investments don’t usually drop in value, but as we’ve seen in recent years, interest rate yields can drop to near zero. If you’re relying completely on your investments to provide for you, it can be a rough ride.
We normally think of investments as being a diversification against the possibility of a job loss, and that’s true. But what we don’t usually think about is how a career is probably the best diversification against investment uncertainty. The income from a paycheck is never more valuable than it is after a stock market crash.
Your career is your best investment in a changing economy
While it’s true that you can lose your job as a result of economic changes, it’s equally true that you can recover too. That may involve retooling for a new career, or entering into a new business venture. The same economic shifts that can destroy careers and industries, also creates new ones. The reality is that the majority of us can find paying work somewhere doing something, even it it’s at a much lower rate of pay.
The same isn’t nearly as true of other investments. Stocks and real estate can take years to recover from a major decline. In the meantime, there will be little that you can do to recover your losses until the overall market improves. And if you sell at the bottom of the price cycle your losses will be locked in forever.
Work is your connection to the world
Though we don’t think about it when planning for retirement, much of our emotional health is tied to our work. It’s where we make our contribution to the world, where we come in contact with the greatest number of people, where we learn to rely on others, and they can rely on us. In a very real way, our sense of legitimacy comes not from what we have, but from what we do. And much of that comes from our careers.
If you had to start all over again, you’d start with your career
Imagine for a moment that you lost all the wealth you have; where would you start the rebuilding process?
It would almost certainly be your career. You’d work harder at your job or business, and if you didn’t have either you’d go out and get one. It would be the first step in your quest for financial recovery.
Very few people can invest their way out of a financial hole. The reality is that it takes money to make money, and if you’ve been wiped out financially, you won’t be able to do that. A career, on the other hand, doesn’t usually require much money. It relies on the services you provide, not on your capital.
Keep the investment in your career growing
If your career truly is an investment, what can you do to make it grow and keep paying you “dividends” in the future?
- Stay on top of changes in your field and do what you can to be ahead of them
- Get any extra training you need to do your job or run your business—education doesn’t stop when you graduate from high school or college
- Be a problem solver—anyone can do a routine job, but it takes an expert to fix what’s broken
- Don’t run away from challenges, embrace them and lead others forward
- Keep your eyes and ears open for side business opportunities—you never know when you might need a career change and this is one of the lowest risk ways to do it
The economy and the job market are in a state of constant change. The best way to invest in your career is by doing what’s necessary to both retain and increase your market value.
Think of your career as an investment. It’s the best diversification to other parts of your portfolio that don’t always behave as we think they should.
Have you ever thought of your career as an investment?