Saturday, November 14, 2015

What If You Loose Your Job Today?

For many people the result of the above will simply be catastrophic. Such people have their job as the sole source of income. And if you fall in this category of people, like most would do, you got to get paranoid about it.

You have to be paranoid about creating multiple sources of income so that the loss of job would not impact your family's standard of living to a significant degree. In addition, in case of any eventuality like major accident, long illness resulting in job loss, cash would still need to keep flowing in for you to have a comfortable life.

Insurance is certainly a good way to mitigate some of the above risks. However, insurance will not be helpful when job loss is due to perhaps the biggest of all reasons - recession in general or mismanagement and adverse business conditions at the company you are working with.

Focus on creating multiple sources of income will ensure consistency of cash flow both in terms of regularity as well as the amount.

Here are some examples of ways in which you can get cash flow:
  • Dividend from stocks
  • Interest from bonds
  • Rent from real estate
  • Royalty from book or another intellectual property
  • Commission from business deal
It is useful to remember that cash is king and cash flow is like having the king's blessings on you. The more blessings you have the better off you are. So stay focused on multiple sources of income and keep the cash flowing in!

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