How many legs does your stool have?
This is fairly self-explanatory. The more legs a stool has, the more stable it is and the less likely it is to fall over if it loses one of those legs.
If you stool only has one leg and something chops that leg off, you’re going to come crashing down. However, if you have more than one source of income you are less likely to experience financial disaster.
After working as a JET ALT (assistant language teacher) I got a job working at the prefectural board of education as an advisor to English teachers. This was a position with a one-year contract, renewable indefinitely. I was told I could have the job for as long as I wanted it. Heh.
Three and a half years later, I was called in for a meeting in October and told that six months later my contract would not be renewed as they were planning to eliminate the position.
This experience has hugely shaped my attitude towards work and saving. Without a job, I couldn’t pay my rent or feed my family. Even then I had a couple of part-time jobs, but they weren’t anywhere near enough.
It ended well as I managed to get a bunch of part-time university work that eventually led to my current position, but it might not have.
Just three and a half years ago, in the confused days after the earthquake and nuclear accident, I left Sendai with my family in the middle of the night, perhaps never to return. How would we live if we had to leave Japan at short notice?
Now I focus on building my stool stronger. I have a decent full-time job, help run a company, do consulting work on the side (this is lucrative but there is not enough of it at the moment), and have created a passive income stream through saving and investing.
I hope you will never be in that situation where your job disappears unexpectedly, but if it does how are you going to survive?
At the very least you should have a decent amount of savings, and hopefully some kind of alternative source of income.
Thinking about this after it has happened is too late. Have you made any plans or provisions for financial disaster? Please comment below or in the forum.