Recently a friend of mine was let go from his job.
It was one of those situations where he worked at the same place for 11 years and worked his way up the ladder.
Then, one morning, he was asked to come up to the front conference room. Without much of a reason or excuse, he was told he was done. Hit by a train that came out of no where.
I’m always a little unsettled when I hear the news of someone I know and respect being let go from the job they’ve worked so hard at.
Perhaps it’s because it reminds me of just how vulnerable we all really are when it comes to this thing we call employment.
One of the hard truths that we must accept about our jobs is that they’re really just paradigms made of glass. As we get better and deeper into our careers, we think we’re building up our empire. We think we’ve got castle walls and defenses. With every promotion or victory, we’re adding more and more to this structure.
But at any time for practically any reason, someone else can come along, swing a hammer, and – in an instant – the whole thing will come tumbling down. You’ll have the look of “surprise” as it takes the floor out from right beneath your feet.
Only then do we actually see how fragile the whole thing really was this whole time.
Sometimes the Employer Decides for You
It seems to be that 50 or so years ago, situations like this were not the case.
Whenever you talk to an elderly person, they’re very proud to tell you that they worked at one job or another for 30+ years. They took care of the company, and the company took care of them by giving them a pension for life.
However, this is just simply not the case any more. Today, the average person switches jobs 12 times! I’m sure that the primary reason is because the person decided to leave. But I’d bet you that somewhere up in the Top 5 Reasons, the employer itself plays a big part in this. Sometimes it’s not your decision whether you stay or go. Sometimes someone else makes that decision for you.
With “at will” employment, an employee can legally be terminated for any reason (or no reason at all) at any time; so long as it does not violate any discriminatory laws. This means something as trivial as your boss not liking your haircut or that blue shirt you wore last week is enough to let you go.
I’m sure if most people knew the real story behind “why” they were let go from a job, the capital offense would be nothing more than you simply pissed off the wrong person off. Perhaps it was something you did that unintentionally but inadvertently made that person look bad. Maybe you simply stood up for yourself or refused to do something you knew was wrong.
Sometimes you’ll never know.
Work is Not the Same As School
The longer I’m in the work force, the more I recognize that there is a very weird disconnect between the way we were raised as children going to school and how the work environment actually works.
As children, school IS your job. You go there every day. You do the work and get good grades. You’re taught to be respectful.
If you were a bad kid, then you got in trouble. You’d stand in the corner, go to the principal’s office, or (worst of all) get kicked out of school.
But if you just did what you were supposed to, then you were fine. No problems. You keep going to school and will eventually graduate.
Then you get your first real job and the rules change.
On the surface, there are still the same basic rules about being respectful and completing your tasks. You boss gives you an assignment, and you get it done. You have your first review, and everything is cool. You mingle well with your co-workers, and everything seems fine.
But as a former manger myself, if you were to go behind closed doors, I can assure you that you’d find out that it’s a lot more complex than that. The higher-ups talk. Opinions are made. Impressions become fact. There’s not necessarily always a rhyme or reason. Maybe someone a little higher up than you doesn’t like you. Maybe you’re a threat. Maybe the employer simply wants a change to happen, but has absolutely no idea how to go about it. And so you become the sacrifice.
At that point, the grades you got as a child no longer matter. In fact, your performance up to this point no longer really matters. You’re being evaluated based on a snapshot in time; one out of a billion possible photos that could have been taken.
More than we’d like to believe, the grounds for termination is based on nothing more than a matter of “opinion”. There are no tangible offenses. No dereliction of responsibility. Someone up on a higher glass structure than you simply decided that “you’re not the right guy” anymore.
I’ve heard of people who were awesome at their jobs for 30 years. Great reviews. Raises and bonuses every year. Then a new manager comes in and everything changes. All of the sudden, the employee is no longer deemed to be doing well anymore. What was good enough yesterday is not unsatisfactory performance.
You can try to fight it if you want. But the new manager is judge and jury. Their opinion becomes fact. And when they sit you down and the train comes, the shit gets real.
The Truth Behind What Employment Really Is
For as long as there has been the concept of employment, there has been a sacred contract:
- A Person needs money for food and shelter.
- The Employer needs workers to get jobs done, and is willing to pay for services rendered.
- Person becomes a Worker by exchanging service to the Employer for money. Hence, they enter the Employer-Worker arrangement.
That’s it. There’s simply nothing more to it than that.
It wasn’t really until the last 100 years that this idea seemed to change. Perhaps one of the most significant contributing factors was when Henry Ford started paying his employees double at $5 per day.
(Though that was well-praised as a glorious social model for an Employer taking care of his Workers, make no mistake. He didn’t do it because he wanted to help humanity. The real reason was more selfish than that. In his 1926 book Today and Tomorrow, Ford explained that the real motivation behind the wage increase was to turn his Workers into future customers. He simply did it to sell more cars.)
Yes, it’s exciting to see pictures of modern work facilities like Google with smiling people working happily on bouncy balls and taking ping-pong breaks. We’d like to think to ourselves that the modern contract between the Employer and Worker has evolved.
But make no mistake. Brush aside all the shinny company perks and the bonding experience of pot-luck Tuesday, and at the core there is still just that one simple Employer-Worker contract: Service for money.
The Only Unemployment Insurance You Need
When you drive your car, you get auto insurance in case you get into an accident.
When you buy a house, you get home owners insurance in case the house burns down.
When you get married and have kids, you get life insurance to cover years of bills in case something tragic was to happen to one of you.
But when you lose your job, you’ve got nothing. (Yes, I know – the government provides unemployment benefits. But let’s be real. There’s a big difference between the way sluggish government unemployment benefits work and the swiftness of an auto or home insurance claim.)
This leaves us with one VERY important conclusion: Our only insurance against a job loss is the equity we build in ourselves.
Remember: This is bigger than just money (however, we’ll talk more about that in a minute). Don’t underestimate:
- The experience you’ve gained.
- The connections you’ve made.
- The degrees and certifications you’ve earned.
- Your ability to communicate.
- Your attitude.
- Your ambition.
- Your flexibility.
- The way you solve problems.
- Your gifts.
Think of Steve Jobs
Could you imagine firing someone like Steve Jobs? Believe it or not, in the 1980’s, Apple let him go after an internal power struggle among management.
Even though he was fired, he was still Steve Jobs. He still had ideas and drive. And with or without Apple, he was going to succeed.
Jobs went on to create NeXT and help start Pixar (the company that made in the wildly famous Toy Story movie) while Apple floundered.
Then in the late 1990’s, the company and people that had rejected him years ago asked him to come back. Apple went on to become one of the strongest companies in the world to date.
After all, he was Steve Jobs.
Why We Need Financial Freedom
In this Employer-Worker exchange, when it comes to money, there is one thing you should be focused on with laser accuracy: Building up your wealth as quickly as possible to decrease your dependency on this arrangement.
In other words, achieving financial freedom.
People often confuse the goal of financial freedom with wanting to retire early or quit your job at a young age. But in reality there is a lot more to it. Financial freedom is really about having complete peace of mind that money is no longer an issue. Whether you work or not is irrelevant. You’re prepared for anything.
It’s your insurance.
Jim Collins and F-You Money
Perhaps this concept is best explained (and certainly more entertaining) with the legendary F-You Money post from blogger Jim Collins. If you’ve never heard of this, I highly recommend listening to Jim’s interview on the Mad Fientist podcast where he does a brilliant job discussing it.
But just in case you don’t listen to it, here’s a summary of the story he tells:
As a young man, Jim was a good saver and had stashed away $5,000. He decided he wanted to go away to Europe for a while. So he asked his employer for the time off, but they said “no”. Knowing that his $5,000 would carry him for several months if he didn’t work, Jim decided he was going to go to Europe anyways. So he went back in to his employer and told them he was going to resign. The employer, realizing they needed Jim more than he needed them, quickly renegotiated and gave him the time off he wanted.
In the end, Jim kept his job and got what he wanted. But he also gained something more important that day: He learned just how much F-You money can empower you!
All You Have Is You
By the way: NONE of what we’re saying here is meant to be interpreted as that you should “hate your job” or be afraid of it.
I actually wish more people would do the opposite: Love their jobs! Take pride in your work and what it is that you do everyday.
Though this Employer-Worker arrangement is a contract, that doesn’t you can’t have good times or take away good experiences. If the end is going to come, then its going to come. But until then, why not make the best of it? Why not:
- Feel good about what you do.
- Dig deep into the parts that interest you.
- Learn new skills that you can take anywhere with you.
- Meet unique people.
- Travel the world.
- Challenge yourself.
- Become an expert.
- Stay relevant within your career.
- Have some fun.
Take the Time for Yourself
I remember years ago as a young professional, I was caught-up (like most people) with climbing the corporate ladder and trying to be the person on top.
Then, after a brief (disappointing) talk with my boss, a wave came over me and I asked myself: What am I doing?
All of this work? All of this effort? Who was it really benefiting? Me or my employer?
I decided that I would honor the Employer-Worker arrangement. BUT every extra spare minute beyond that, I was going to work on me. I was going to “lean out” rather than “lean in”. I was going to focus on the skills that would make me valuable ANYWHERE; not just here.
But on top of that, I was going to work on my life at home, my relationships, and my family. I was going to invest the time required to learn how to grow our fortune. With each day, my dependency on the Employer-Worker arrangement would weaken. I’d be putting “me” in charge and slowly become my own boss.
When you work for yourself, you can never be fired. You’re indestructible. And that’s the greatest form of unemployment insurance you could ever ask for.
Readers – If you lost your job today, how prepared do you think you’d be to handle it? Does job loss factor into your goals for saving and trying to reach financial freedom? What skills and talents are you working on that will make you indestructible?
Featured images courtesy of Flickr Shanelevl, USB, Wayne S. Grazio, Josef Grunig
Amanda @ centsiblyrich says
Great post! The comparison of school and work is interesting. With work, there are so many subjective factors involved, it’s hard to control for. But I’m starting to see that in school too. My son’s school has started “standards based grading” which sounds eerily similar to an annual work review – a very subjective opinion on performance.
When we started paying off debt and saving more for retirement, our motivation was to protect ourselves from a potential job loss. We’re past the fear of job loss now for two reasons: 1 – we have decent savings to get us by for a while and 2 – we have options for generating income beyond standard employment. So, I guess, in a way, we do have our own unemployment insurance.
As a side note, my husband is the rare person who’s been with the same company for 22 years (though he has likely given up better earning positions to stay).
Thanks! My own observations of how school is working out for my two kids played a small part in this write-up as well. Maybe it’s just me, but I feel like school is waaay too easy on kids these days. They barely have any homework, they get to re-take tests over and over, and a phone call from the parents can seem to erase a lot of wrongs. As you and I know, when you get to your job, this is not the case. If you miss a deadline, the boss is pissed! You look like a fool to your clients. There are no do-overs. This makes me very afraid because (knowing that work is way more brutal than school) I fear the next generation won’t even know what hit them when they enter the work force someday.
I’m glad to hear that you and your husband have excelled beyond fear of unemployment. There are may levels to financial freedom, and I think reaching a point where needing to work for your money is an important milestone. It sounds to me like you guys are pretty far along. That’s awesome!
Good for your husband for working at the same place for so long. He is a rare breed indeed! That takes dedication – both on his part and the company.
Mustard Seed Money says
If I was laid off for some reason my wife and I would be fine. We have been saving up for years and I am hoping to reach FIRE within 5 years. When the economy tanked in 2007-2009 I got a wake up call and got my financial act together. While it wouldn’t be ideal as I’d like to ride things out until retirement. I would be ready.
That’s awesome to hear! I think anyone that made it through the whole 2008 debacle got quite a lesson in personal finance. I feel I truly now know what they mean by RISK / reward. It was one thing to have enough money in case you were ever fired, but now its quite another to make sure you can survive a 50% drop in the stock market.
Dividends Down Under says
Very nice post MMD – you’re right. At the moment my wife and I are in a better place financially than we have been for a long time, both in net worth and earning. Of course, that could be snatched away at any second, like your friend, but it seems to be okay at this point. The more we build up our passive income, our net worth, the better off we’ll be.
We do want to get there as soon as we can – IVF makes that difficult though at the moment – we’re saving in cash, not investing.
It’s not the end of the world if I were to lose my job, there are other options for me – I could probably get another job fairly easily (hopefully!).
Thank you for the excellent post, it made me think.
You’re welcome Tristan. And that’s great to hear that you’ve got other options and passive income that could carry you through in case you were to ever suddenly lose your job. If you’re confident that you get another job fairly easily, then you probably could. Sometimes we tend to get so caught up in thinking our current job is the one and only one. Then when we are about to lose it, we feel like our whole world is crashing down. But in reality, there are plenty of good alternatives out there.
David @ Thinking Thrifty says
This is a great post! I’m lucky enough to have an employer who truly values my worth and has looked after me since I started. However, I’ve also had others where I was merely a number who could be replaced if I dared to challenge the status quo. I call it a F-OFF fund, but it’s exactly the same principle, and believe me if I’d have had a F-OFF fund at job two mentioned above, I’d have been out of there much sooner!! Some employers only want to hire ‘yes’ men and women, that’s just not me unfortunately.
F-Off fund … I love it!
Words cannot describe how on point this article is. I don’t even have anything to add to it. Anything else would just be redundant.
ARB–Angry Retail Banker
Thanks ARB! I’m glad you enjoyed it.
Graham @ Reverse The Crush says
Excellent post! Very well said…
I definitely agree and appreciate that you can look at employment for what is really is.
As for me, I’d be prepared without a job. I’ve been off on a mini-retirement for a year and am just recently working my way back. As far as skills and talents, I’m working on blogging as a side hustle, freelance writing down the road, and dividend growth investing. I also want to further develop my social media and marketing skills. Thanks for the great read 🙂
Thanks Graham, and welcome to the site! A mini-retirement? Building your side hustles and passive income streams? Wow! I’d say you’re practically almost to that place that most of us want to be!
MMD, this article is an eye opener! I actually just resigned from work and am just hired. I hope that I could stay longer and would build a good amount of money for my emergency fund because my new job wouldn’t take much time and workload, so I could look for a side hustle to generate more income.
You’ve got the right idea building up that emergency fund. That’s something we could all use as a short term insurance policy.
Millennial Money says
With the job market as it is, employers able to pick up employees from any direction, there is a great deal of fluctuation in job roles over the lifespan. This article correctly shows that the only constant that remains is the labor of the individual. Thanks for reminding us of what we have when we build our skills versus a simple job role.
Absolutely! If we thought of our own personal skills and talents more like an investment portfolio, I think we’d all find that we have a little bit of work to do. Maybe a little bit of diversification of our knowledge, better communication, and more flexibility would be enough self-equity to make us valuable at virtually anywhere.
Derek @ MoneyAhoy says
It’s reasons like the example you shared in the post that led me to really focus on developing my side income. The days of 40 years of service to a company are over. Many companies will cut workers at the drop of a hat if it will improve their bottom line. In today’s connected world, many workers have tons of skills that their employers are not fully tapping into. This is where turning a hobby into a side income stream really can be great insurance!
I couldn’t agree with you more. Through blogging and experimenting with dozens of other side income producing hobbies, I’ve utilized and refined skills that I only have yet to understand. When it comes to our full potential and what that could do for our overall net worth, I think a lot of people are leaving money on the table.