There are people who are fine with not starting any additional streams of income, because they have found a job, profession, or even company that they love. Such love is rare to come by. Perhaps, these people should give 100% attention to their jobs, instead of diverging their focus to find other ways of making money, and unnecessarily stressing themselves out. Is this a good, realistic plan?

Here, I will explain why no jobs are stable in the modern era of economic change and turbulence. Even if you love your job, you can lose it at any given moment and need to be prepared for the downsides. 

Having side income gives you more than one method to pay the bills, helps you diversify your income, and gives you the option to transition into self-employment at any given time in the future, should you want to.

No jobs are stable in the modern era

I hate to break the news to you, but if you haven’t heard, lifetime employment is dead. A few decades ago, there existed a form of implicit contract – if you are a loyal employee who gives his best performance and commitment, the company will take care of you for life (i.e. the next 20, 30, 40 years).

There is no such contract today, as layoffs are increasingly apparent and common.

“But this won’t happen to me,” you say. Before you succumb to optimism bias, first, understand that there is no company loyalty. 

Companies will always find a way to optimize cost, since they need to take care of their own interests – their bottom lines. Even if you work in a large organization, mass layoffs are not unusual and they are done to improve profit margins.

Second, there is no such thing as long-term stability across industries and organizations. 

In an era of market instability, it is not uncommon that job functions change within companies year upon year. Companies find ways of cutting costs in order to “survive” in the volatile market (read: by laying off its employees). Certain companies may collapse while others rise. These are all factors which you have no control over as an employee.

These reasons are why you should never get complacent. Even if your performance reviews are positive and that there are no rumors hinting at the possibility of layoffs, you never know what is going on behind the scenes. 

The best thing to assume – even if you love your job – is that you could be blindsided by your company at any given moment. You are never safe. Even if your company refers to its workers as “family”, the family will eventually thin out when times are hard. Know that as an employee, you are a tool that keeps operations going, and these tools can be replaced and made redundant at any time when the organization decides that “times are hard”.

Never getting complacent does not mean that you should work harder at your company to prevent getting laid off. That is an unwise reason to work beyond 40 hours a week.

Instead, find ways to generate side income to prepare for the possibility of getting laid off. Side income will buy you time while you look for another job, as well as enable you to build a scalable business. If you are interested, here are 4 other ways of finding purpose outside of your job that give you more control, options, and are more sustainable.

Diversify your income

The next benefit of having side income is diversification. Even if you lose your job, you know that your situation is not going to be totally messed up.

When you have additional streams of income to fall back on, you achieve a sense of mental peace and freedom.

Besides, having side income would give you more money overall. Happiness studies show that people who make at least $75,000 a year are much happier than the average person. They put up with less daily stress.

If you think that setting up a side business is hard, know that nothing profitable in life comes easy from the start, and business skills must be learnt. There may be a sizable learning curve to starting your first side hustle. That is why you should set up your side hustle while being employed, so that you have immediate streams of cash flow to pay the bills while you learn something new. Setting up your first side hustle is much easier to do when you work a remote job.

Give yourself options to transition into self-employment at any time

Even if you love your job today, there is no guarantee that you will love your job forever. Someday, you may want a flexible schedule, and you may want to work for yourself entirely. No one wants to be sick of full-time employment at the age of 45 or 50, and yet have no options to transition out of it.

So consider that someday, you may want to transition out of your job. Everyone needs to learn skills outside their jobs that generate income.

But why not learn these skills only when the day comes? Because it may be too late. Building a side hustle quickly (to replace your full-time job) is not realistic for most people. To learn skill sets that are valued by the market, it is not an easy endeavor, and the best time to start is today.

Finally, what if you are someone who does not want to transition into self-employment, because you are progressing rapidly in your career, making a ton of money, and you love it? First, you can lose your job even if you are a top performer in your company. Second, you are still not free to transition out of employment someday if you want to – unless you are banking on saving up enough money for the rest of your life. Still, it is undoubtedly a good idea to have a second source of income.

Summary

Ultimately, it is fine to love your job, but there are many downsides to having one source of income in the modern era. No jobs are stable, so diversify your income sources. Give yourself options to fall back on. Eventually, transition into self-employment (if you want to).