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What If You Lost That Job Today?


By Godfrey Kenneth Gobba

There is no such thing as job security because like it or not, one day you are going to lose your job. You could get fired or laid off or you could resign or even eventually retire but you would still have lost your job anyway.

But the question is, if you lost your job today, for how long would you be able to survive without an assured monthly salary?

If you stopped receiving a salary today, for how long would your savings be able to cover your rent, food, utilities, fuel etc? If you maintained your current lifestyle, how long would it take you to run out of money? Would you last a year, 6 months, 3 months or a month?

Nine out of 10 of the people I have asked this question shivered at the thought of losing their jobs because they were living from hand to mouth and they would not even last for 3 months without a salary.

Majority of these have families with children to put through school and extended family to financially support.

What bothers me most is that while majority of these salaried folks agree that it is possible for them to lose their jobs just like that, many believe that they are well connected and marketable so if they lost their jobs today, they would be able to land new jobs in less than 2 months’ time. That is one hell of a risky assumption because things could go terribly wrong.

What if it takes you more than 2 months to land a new job? What if it takes you an entire year? How will you meet your bills without a salary? Have you thought about your children? Where will their school fees come from?

A lot of nasty scenarios could occur if you lost your job today without adequate reserves to sustain your lifestyle and family.

Hence it is important that you not only build up adequate reserves to cushion you in difficult times, but that you also do it in a smart way.

For the few that actually have reserves, they primarily use a savings account to collect and accumulate their savings but that is very slow.

The smart way to build up your reserves is to save up using financial assets like risk free Treasury bills and government bonds.

Not only will your savings be safe from loss, but in most cases you will also be able to grow your reserves more than 7 times faster than if you had used a savings account.

If by using your 2% p.a. savings account you could slowly build up enough reserves to sustain you for 3 months, government bonds offering 14% p.a. would accelerate the growth of the same savings by a factor of 7, giving you enough reserves to sustain you for 1 year and 9 months.

That would be an extra 18 months for you to find a new job before you exhaust your reserves.

So while you still have that job, you had better come to the realization (if you haven’t already) that one day your services will no longer be required.

If that misfortune ever befalls you, you will need to have adequate reserves to sustain you until you can find a new job.

You should therefore find ways of accelerating the growth of your reserves and one of the best ways is by saving up using Treasury Bills and Government Bonds.

Don’t wait for famine to strike. Start sowing your seeds now. Financial assets are the way to go.

The author is CEO, African Investor Academy





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