Creating Your Own Security

Throughout most of history, people have been accustomed to gradual progress. Sometimes change was faster, and sometimes it was slower. But it always seemed to move in a straight line. This made the future fairly predictable.

Today, however, the rate of change is not only faster than ever, it is spasmodic. It is taking place in a variety of areas and affecting us in unexpected ways.

Changes in information processing are happening separately from changes in medicine, changes in transportation, changes in education, changes in politics, and changes in global competition. Changes in family relationships are happening separately from the rise and fall of new industries.

If anything, the rate of this desultory change is increasing. As a result, most of us are already suffering from what sociologist Alvin Toffler called “Future Shock.”

You can’t do much about what’s happening. But you can — and should — think seriously about what all this change means in terms of your financial security. To position yourself for an uncertain future, you must do something to ensure that you’ll be able to keep earning money… no matter what.

One of the greatest mistakes you can make — the one with the worst long-term consequences — is to think only about the present and give very little thought to your ability to make a good living in the years ahead.

In our grandfathers’ time, most people stayed with the same company for their entire working lives. For our parents, it was common to change jobs three or four times.

Today, a person entering the workforce can expect to have five careers between the ages of 21 and 65, and 14 full-time jobs lasting two years or more.

According to Fortune magazine, 40 percent of American employees in the 21st century will be “contingency” workers. This means that they will never work permanently for any company. They will continue to move from job to job, earning less money than full-time employees and accruing few, if any, benefits.

Imagine what your job will look like five years from now. Since knowledge in your field is probably doubling every five years, 20 percent of what you know is becoming outdated each year. In five years, you will be doing a completely different job requiring completely different skills.

Ask yourself, “Which of my skills are becoming dated? What am I doing today that is different than what I was doing one year ago and two years ago? What am I likely to be doing five years from now? What knowledge will I need, and how will I acquire it?”

In other words, what is your plan for your financial future?

It costs a company approximately double your salary to employ you — in terms of their investment in space, benefits, and other resources. And of course, they have to make a profit on top of that. Therefore, what you contribute to your company’s bottom line must be considerably greater than the amount you are receiving… or you will find yourself unemployed.

The market pays excellent rewards only for excellent performance. It pays average rewards for average performance, and it pays below average rewards for below average performance.

To earn more, you must learn more. Not only that, what you already know — your accumulated knowledge and experience — is becoming obsolete bit by bit, day by day. As I said, knowledge in your field is probably doubling every five years. That means your knowledge must double every five years just for you to stay even.

The solution is continuous self-development.

You must continually add to your knowledge and to your ability to apply that knowledge. Those are your most valuable assets… And only by building on those assets do you keep them from deteriorating. As Pat Riley wrote in his book The Winner Within, “If you are not committed to getting better at what you are doing, you are bound to get worse.”

By engaging in continuous self-improvement, you put yourself behind the wheel of your own life. By dedicating yourself to learning more, you are automatically preparing yourself to earn more. You position yourself for tomorrow by developing the knowledge and skills you need to be a valuable and productive part of the economy, no matter which direction it goes in.

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