We get news today that Toys R Us employees are filing a lawsuit against the company. 30,000 employees got no severance yet millions were paid out to execs just weeks before the company filed for bankruptcy. This story is all too common. Read this story and yet again you will find the touching stories of employees who worked for decades, who were "loyal," "proud to work" there, etc. etc.
But this is not just a story of corporate greed. It's a story of how gullible and foolish we are. Here's a few concrete tips you can/should follow so that you are not in the same boat in the future.
Lesson #1: Protect your 401k
If your employer has a 401k plan and provides a company match, often times the match will go automatically into company stock (if your company is a public company). Make sure that you periodically move this into some other fund that you are comfortable with. Investing your company match into company stock is a VERY BAD IDEA. Why? Because too much of your financial future is tied up in your company's financial future - remember, your wages come from the company as well. If you think that your company is awesome and an exception - don't believe this. From a previous post of mine focused on S&P500 Index investing you will see that 4 out of every 7 publicly listed companies do badly.
Lesson #2: Diversify your income streams
For most of us, our wages constitute the lion's share of our income. Perhaps, small amounts of interest/dividend income come in each year. Try to systematically grow your income streams by investing wisely. The more you diversify, the less you are dependent on that boss or company for your future financial well-being.
Lesson #3: Raises are better than praise
Ask for that raise - don't be afraid. A previous post of mine in this sub discusses the mechanics of doing this. It's a sad truth that your talent will most often not be noticed. Not because your boss is a bad person but because the company had policies, people get busy, yada yada...
So don't be taken in by praise. It's nice to receive plaudits. But you can't pay bills with them and they don't help you build income streams. So ask for the raise.
Lesson #4: Up skill yourself
Fast forward 30 years. You are now (say) in your mid 50s/60s. What if you get laid off and don't have severance? How do you prevent this from happening? The truth is you cannot - almost any company that sounds awesome today may face troubles decades later. The best you can do is two things:
- if laid off, you can find a new position pretty easily.
- if laid off, you are worry-free because you have already accumulated a sizable set of assets for your needs.
To find a position pretty easily, you need to make sure that your skills continue to be in demand (projecting out 30 years). So if you need to take classes/training now to better yourself, do it sooner than later.
Another key is networking. We all try to network when we need someone to help us - we need a business contact/deal. That's the "take" model of networking - where we dip into the network to see what we can get out of it. But what you get out is proportional to what you put in. This means that you should always be networking - help others if you can now, it gets paid back manifold over time. Prof. Adam Grant writes about this model in his phenomenal book "Give and Take."
Good luck!
Submitted June 03, 2018 at 11:30AM by arnexa https://ift.tt/2JrMmEK
