Job Loss Planning and Income Diversification
Help to cushion an unexpected job loss with Job Loss Planning and Income Diversification. The strategy is to either start a part-time business or get part-time employment and work your full-time job. This strategy needs to be implemented by someone who has a strong work ethic because you would be working more than the standard 40 hour work week.
Income Diversification Strategies and Planning for a Job LossHaving a second or third job provides an income diversification cushion by having more than one source of income. Now, I'm not saying that this is easy. You will have to give up precious free time, but the benefit of this is that if you do experience a job loss, you will at least have the part-time salary. If it is the same type of work you will not have an employment gap in your work history. Experts tell us to diversify when it comes to investing, so why not do so when it comes to working? The investment here being your time.
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When working as an employee, income diversification is easier to implement. You get hired, you do your work, then you go home. Aside from the possible difficulty of getting the job, you won't need to put in the extra time that starting a business from scratch requires. You also don't get the unlimited upside benefits either. Being an employee used to offer security and benefits, but that is not necessarily the case any more.
It seems the days of staying at a job for years, then retiring and collecting a pension, are coming to an end if they are not already over. Being an employee is a good option if you need something short-term or you don't have the knowledge or capital to start up on your own. Although each of these obstacles can be overcome with some luck and education.
Another point to consider during your job loss planning is, if you go from your full-time to your part-time job how will that affect your unemployment benefits? Each person's situation is different, it depends on how much money the part-time job produced, among other things. Ask your local unemployment office what stipulations there are in regard to your unemployment benefits. Of course if your own business became successful and generated more income than your full-time job that may not be an issue.
The best place to get advice would be from your financial advisor or attorney, for answers to questions about your finances and starting a business. Once you come to terms with having less free time, then either find additional employment or create a new business. You can start making money and soften the blow with job loss planning. Resumizer has resources you are welcome to use to assist you in your job loss planning by providing tools, such as Dealing With a Layoff, that can help you obtain your new position.
When looking at the pros and cons below if it looks like being self-employed has more cons, it depends upon what you consider a con. From the perspective of a person who wants to work for themselves the cons are small in comparison to the potential gains. There is a certain personality type that doesn't mind being exposed to the risks when they are confident in themselves and they feel they can make it work.
This is not to say we should jump in and accept risks but if you are well educated and experienced in your field you may have the tools you need to succeed.
Income Diversification ChoicesEmployee Pros and Cons:
- Nothing to set up - Pro
- Usually has set hours - Pro
- Usually has steady paycheck and benefits - Pro/Con
- May not have special licenses - Pro
- Simpler tax returns - Pro
- Someone else is the limiting factor - Con
- Pay depends upon how well the business does - Pro/Con
- Do what you want - Pro
- The only limiting factor is you - Pro
- More complicated to set up - Con
- May require much more of your time - Con
- More complicated tax returns - Con
- Needs capital to start - Con
People who want to work for themselves have a burning desire to be their own boss that isn't easily snuffed out by the day to day problems that arise. Maybe at one time in the past being an employee was a safe and secure way to generate income, but as companies are cutting back and shipping jobs over seas it doesn't seem to be as secure as it once was. If you would like to make a resume to get a job, click the button here: