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25 Mar 10 “Safe” jobs & investments don’t exist
The global financial crisis and recession has turned a lot of old “truths” on its head.
“You can bank on it” is an expression born out of the notion that banks are conservative, sound and safe. Is that true anymore?
Permanent employment is more safe than freelancing or entrepreneurship. Or is it? The masses of permanent employees who endured lower wages and less stimulating work in exchange for the perceived safety of permanent employment got a rude awakening when they where laid off.
Money in a bank is safe, right? Let’s put aside the risk of banks themselves - in my case being a British resident, the pound has lost 25-35% of its value against a lot of other major currencies. Currencies in general have had a rollercoaster ride over the last couple of years, a pound three years ago is not the same pound today. Neither is the dollar. Or the Euro.
It’s worth asking, is anything safe, is anything absolute anymore?
All value is relative
Most people perceive their monetary currency, such as the US Dollar or British Pound as their measure of absolute value. They conveniently forget that most countries create new money on a steady basis, resulting in general price levels rising year-by-year (in the case of the UK, usually around 3-4% per year). Considering technology improves and productivity tends to increase, the fact that your everyday necessities and services rise in price is highly counter-intuitive if the value of money was “absolute”. The reality is that the value of your money is dropping every year, given productivity and technology improvements, probably by a lot more than the stated 3-4%.
Nothing in the world has an absolute value, not gold, not oil, not real estate and definitely not fiat money. The value of anything is only whatever someone else is prepared to give you in exchange for it.
Your only safety is your ability
There is no form of economical activity that is safer than the other, permanent, freelance, entrepreneurial or otherwise. When it comes to your own financial safety, the only safety you have is your own ability in comparison to others - if you are among the better in whatever you do, be it as a permanent employee or an entrepreneur, you’ll probably do well. If you suck at what you do, you will likely get fired at the first sign of trouble if you are a permanent employee.
Being good at what you do is your only insurance, and being good is not a static concept, you need to constantly improve and learn to stay on top.
Forget “safe” investments or “safe” jobs. They don’t exist. When it comes to your investments, all value is relative, even the dollar in your pocket. And when it comes to safe jobs, there are none, the only financial safety you have is your own ability and ability to continually improve.
