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Are You Ready To ‘Lose Your Job’? - Part 2
By Steve | February 23, 2008
At the age of 43, I am already taking stock of my career and what my future holds for me, as I have witnessed many of my friends and colleagues falling victim to retrenchments at the MNCs they have worked for most of their lives. These people used to earn extremely high salaries, but now, they have zero salaries. Some become so devastated and despondent that it takes quite sometime before they can come to terms with what hit them. Worse still, in Singapore, the government does not provide social security for the unemployed – that is, if you don’t work, you don’t get paid. Globalization and high-tech communication and transportation may appear to benefit everyone, but it has also ushered in a menacing trend: an ‘Employee Life Cycle’ that gets shorter and shorter every year.
If you started work in the 1960s and the 1970s, you would have probably enjoyed a lot more opportunities as an employee and have probably gone through several salary increases as the economy prospered and as property prices grew as quickly. Does this still hold true nowadays?
What used to be the case was that your salary grew steadily until about the voluntary retirement age of 55, which is when you would likely see your salary decreasing.
Nowadays, is this scenario still the same? No. These days, for the majority of career positions (about 80%), salaries begin to plateau when you’re in your late 30s to early 40s. This is known as the ‘unofficial retirement age’ in HR practices. This situation of salaries not rising as fast – and even tapering off when you reach approximately the age of 40 – is not common knowledge, however. People who know the real deal about how corporations are run these days won’t tell you about this.
A salary plateau is most likely brought about by companies starting to assess whether their employees are becoming too expensive. They begin to question whether you, for instance, are technologically competent enough to keep up with what’s going on. You have to face the reality of not likely getting the same pay scale if you lose your job and try to find another job at the age of 40 or above. The trend is this – expenses are up, and income is down. Middle-class people are losing the wealth they have created and they are not prepared to face this reality.
BY the age of 40, expenses will start to escalate. You would have a home to pay for and probably have children to care for. Some will have children going to universities, which again entails another rise in expenses. Worse still, while your expenses are steadily increasing, your salary is tapering off and you may even face the possibility of losing your job if your company is not doing well. This situation creates a huge negative impact on people’s standard of living and, worst of all, their life.
What I have been observing lately in Singapore is extremely unsettling. This used to be a place where the majority of the people were middle-class. However, we now see a trend where it’s either you are rich, or you are poor. For my Singaporean blog readers – have you observed this phenomenon happening around you right now?
Now, may I ask you to pause and take stock of your situation, especially if you are working for other people at present: => If you were to keep on with what you’re doing, what do you think would your future hold for you?
I personally know someone who experienced firsthand the scenario I just described above. When he reached the age of 40, his salary sustained a plateau, and after 50, when his health started deteriorating, his financial position likewise went downhill because his insurance companies refused to cover the bulk of his medical expenses. Although your health policy would appear to cover critical illnesses, reading the fine print on insurance policies would reveal that a lot of diseases aren’t covered. This only means that if you seriously want to have an early retirement when you reach 50, you will need at least $2 million in your bank account. Do you think you would have that $2 million to spend by that time?
So ask yourself – looking forward, if you were to keep on with what you’re doing now, how do you see your future?
Here’s another question for you…do you think that there’s such a thing as ‘job security’? This is an eye-opening question, because many entrepreneurs believe that in business, “the only security you’ll have is the security you create for yourself. You can’t depend on others to create your security for you.”
Now, please don’t get me wrong. I am not asking every single person to quit his or her job. What I am saying is this: Have you already developed a skill set – an entrepreneurial skill set and mindset – in order that any time you’re cut off from your main source of income, you can still survive and even thrive? I mention this because I know of many people who, if their income source is immediately cut off, would have absolutely no idea on what they would do about it. The grim reality is that many people have to take a 50% pay cut; in fact, if you are a senior-level manager and you sustain a 50% pay cut, consider yourself very lucky as many people fall into worse situations.
It takes courage to answer this question truthfully. You can shape your future exactly the way you want.
Here’s what I recommend you do:
1) First, establish your wealth profile. Identify your strengths and weaknesses. Know your talent, and by doing so, you’ll be able to begin your quest for wealth.
2) Develop a plan to be rich. There should be no excuses. If you are not rich (this means that you must come up with at least S$2 million or US$1.5 million), you are not going to live the comfortable life you deserve.
3) If you are still employed, consider part-time entrepreneurship. In other words, you have to build your spare parachute in case your first malfunctions, as it most probably will – given the economic state of affairs. A potential ‘second-parachute business’ to consider is MLM + Internet Marketing =MyVideoTalk.
4) Develop a passion for what you do, because with passion, you will stick to what you are doing even when an obstacle rears its ugly head. Passion will definitely turn you into an unstoppable powerhouse.
Read:
Passion and Dream: Useless Without Actions
The Second Parachute
Topics: Step 2: Actions, Category01: Entrepreneurship, Category90: Recommended Products, Category95: Network Marketing |
February 23rd, 2008 at 10:16 pm
I found your site on technorati and read a few of your other posts. Keep up the good work. I just added your RSS feed to my Google News Reader. Looking forward to reading more from you.
Tom Humes
February 23rd, 2008 at 10:21 pm
I found your site on google blog search and read a few of your other posts. Keep up the good work. Just added your RSS feed to my feed reader. Look forward to reading more from you.
- Randy Nichols.
February 25th, 2008 at 6:14 am
steve, thanks for sharing. I can only say that this is very real in singapore.
I am not yet 40, but i am preparing for this crisis before it comes the 2nd time.
“Love your Job, not your Company”
– daniel
February 25th, 2008 at 5:40 pm
Thank you all for your comments. I will continue to write good articles for your benefits.
May 18th, 2008 at 11:30 am
I have to say, you did a really nice job on explaining something that can be really tricky at times. There are times that I struggle with wrapping my head around topics like this, thank you for summing it up well.
Nice..