Why Having a Permanent Job Could Be a Bad Thing

Written by Karen Bryan

Having a permanent job can be a bad thing if it puts you in a comfort zone where you feel that your income is guaranteed. That’ll be a fallacy, as you can still be made redundant from a supposedly permanent job.

One of the main reasons that we lived below our means and became debt free as quickly as possible was that neither my husband nor I had a permanent job. My husband worked on fixed term contracts and I was a freelancer, which meant that we could never be sure of our incomes. This focused our minds on making sure that we built up buffers to allow us to maintain our standard of living for as long as possible, even if our household income took a dive.

We paid off our mortgage early by making additional payments every month. We knew that our living expenses would be much lower if we’d no montly mortage repayments. We saved up enough money to ensure that our sons could get through university. Even the maximum student loan isn’t enough to cover basic expenses. My husband paid additional voluntary contributions into his final salary scheme. We saved as much as we could in tax free Cash ISAs.

Whereas if you have a permanent job, you may feel comfortable to spend whatever you earn. You may even borrow money to enhance your lifestyle, e.g. borrow against the value of your home, especially during periods of rising property values. You basically feel financially secure. However, if you lose your job, you could be left very vulnerable.

I think it’s bettter not to assume that your income from a permanent job will keep coming indefinitely. However, I’m not suggesting living like a miser, hoarding every penny in case misfortune hits.

In my opinion, too many people have been disregarding the possibility of their income falling. They’ve been getting swept along by consumerism; over-spending, getting into debt and not saving enough money.

 

5 Responses to “Why Having a Permanent Job Could Be a Bad Thing”

  1. I worked a job where redundancy was certain for 2 years. The work dropped off to the point where I – and others – would be cleaning and tidying the premises to stay busy. During this time I thoroughly educated myself on business, finance, internet marketing and diversifying my income.

    All the while, my colleagues remarked I “worry too much” as they continued to bury their heads in the sand, deluding themselves. Our company specialised in a niche dominated by newer competitors so I offered to promote the company website by tweaking the SEO to get us on page 1 of the Google SERPS. Deaf ears. Not interested.

    Anyway, eventually, quite a few of us were made redundant. I wasn’t shocked but still disappointed by the fact it could have been averted. What I learned: if a business owner is not interested in their own business, avoid. Going for a job interview should involve being honest and asking yourself the pertinent question, “Is this a sinking ship?”.

    The firm is still running by the way, but with about 75% of the staff now gone having accepted a pay package or reduced their hours to part time. In such circumstances I believe diversification is the key; you can put a little effort and attention into side projects or alternate means of income if things are slow on other fronts. I used to work over 40 hours a week at my full time job, and on my own projects an additional 5 hours a night and more at weekends.

    In summary, never take things for granted, create that buffer zone, make a few sacrifices and be prepared to work hard. If you do lose your job, you’ll at least be that much more employable with newly gained skills. Hopefully you’ll be UN-employable because you’ll end up working for yourself.

  2. Hi – another interesting post.

    For me, the risk of permanent employment is in most cases not that you under-estimate your vulnerability. I suspect that most employees could find similar replacement work if they were made redundant (albeit perhaps not immediately – hence the need for an EF).

    The danger is more one of becoming dependent upon a particular level of regular income. It encourages you to take on regular obligations (a bigger house, higher council tax, a fancy smartphone tariff, a bigger car) that swallow up your financial flexibility and remove scope for entrepreneurialism.

    Then, you add on financial responsibility for feeding your kids, and your scope for taking entrepreneurial risk is severely curtailed.

    I have a reasonable standard of living as a result of my regular paid employment. But the downside is that I neither have the time, nor the spare capital, nor the freedom to take risks that would enable me to do something really entrepreneurial. That’s the compromise that I’ve had to make.

  3. In my opinion, it’s not just the potential illusion of immediate financial safety that is dangerous. The general complacency one tends to adopt after remaining in a position for a sustained amount of time also limits your range of experience, which in turn can limit your training and therefore your future opportunities. More importantly, doing the same stuff at the same place is just plain boring! It’s not good for your psychological or intellectual well-being.

    For me, my sense of purpose and self-worth is more important than money. It doesn’t matter how much cash I have; if I go to a meaningless place, perform tasks, leave 8 hours later and haven’t experienced some personal triumph or changed the world in some small way, I’m a very poor person.

  4. Ash – well said indeed! Being truly rich sometimes has nothing to do with money.

  5. Ash – While I agree that job satisfaction and a sense of purpose are very important, you do need a certain level of income to live a decent life.

    Also I doubt if there is a perfect job. I used to dream of being a full time blogger during my day job. However the reality doesn’t quite live up the dream in that I can’t just concentrate of what I enjoy doing e.g. wriiting posts and social media, but have to work on things like SEO and selling ads.