Loyal to a Fault: Why You Need a Second Stream of Income Right Now

Second Stream of Income

What would you do if you lost your job tomorrow?

Without a second stream of income, most Americans would scramble to find a new corporate job. Instead of looking for the right job, most people would settle for any job. This new job would likely offer stagnant wages or a paycut, lower benefits, and less seniority.

But what if you could slow down and do it right? Or maybe not have to get a new corporate McJob at all?

How can you build a layer of protection between you and losing your job?

The Problem of Asymmetric Loyalty

Sandy at Yes, I Am Cheap relates the story of when her company laid off 5,000 people. She began to realize that having a second stream of income was important to her financial well-being:

But the second layoff really opened my eyes. I realized that my company was not as loyal to me as I had been to them.  If the company felt that laying off a bunch of people was in its best interest, it didn’t matter what you had going on in your life.  All that mattered was the bottom line.  So, I started being loyal to myself first.

Most of the people I talk to who are trapped in corporate America have Sandy’s pre-layoff attitude. I call it Asymmetric Loyalty. It’s when one person (the employee) is more loyal to the other party (the company or its management) than the other way around.

The situation is ripe for exploitation.

Why else would your company have you sign employment contracts that require you work exclusively for them e.g. no moonlighting or side projects? Why would they insist on non-compete clauses that can restrict your career choices up to 2 years after you’ve already left the company?

I see many of my friends and colleagues work all kinds of extra hours to push projects across the finish line. Or take a lesser pay raise or even pay freezes. Or leave vacation days on the table. All out of misguided loyalty to their boss or department or company.

It’s a very easy trap to get into, especially if you have a decent relationship with your boss. It feels like a human being on the other end will take your specific situation into consideration before a mass firing.

The problem is your boss can’t protect you from a layoff or downsizing. If it comes to choosing between your job security or hers, which one do you think she’ll pick? Hell, your boss might be going down with the whole department!

If the company thinks it can improve its stock price with a mass layoff, it will pull the trigger without a moment’s hesitation.

You Can Accomplish More Than You Think

At I Will Teach You to be Rich, Ramit Sethi details the story of Liz, one of his former students who earned $50,000 on the side while attending law school. Having gone through law school myself, I can tell you that this couldn’t possibly have been easy!

Liz managed to create a second stream of income … and a third stream, and a fourth stream! The article offers some great tips that I wholeheartedly endorse, including writing your to-do list the night before and protecting your peak productivity time.

But what I find most fascinating about this article is the comments. I know I shouldn’t read the comments on a blog as controversial as Ramit’s, but at the same time, the sheer hostility to the idea that Liz could juggle her second stream of income along with a number of other commitments (including a new baby) says something about people’s attitudes.

People don’t think they can handle more than one or two responsibilities in their lives at a time. Even when we have evidence that other people are moonlighting, daylighting, volunteering, running side projects, and still keeping personal commitments. We’re more willing to sling mud at these people than to try and figure out how they do it!

These people aren’t superhuman. They’ve just decided not to place their complete loyalty, trust, time, and devotion into a faceless, inhuman corporation. They’ve decided to invest in themselves and create a second stream of income to support them in case it doesn’t work out with Faceless, Inc. or Inhuman Corp.

You should be doing the same. Anything else is an excuse.

A Single Point of Failure

No financial advisor in her right mind would tell you to invest all your money in one stock. Financial advisors consistently tell you to diversify your holdings in order to protect yourself from having a single point of failure.

Yet when it comes to income streams, most people rely on only one source of income.

Think about how insane that is for a moment. We know that supposedly great companies go belly up all the time (*cough cough* Enron, Lehman Brothers). Yet the Herd tells us that “security” means getting a job with the Fortune 500 and taking as much shit as possible from management until you retire from old age or exhaustion.

It’s time to stop the insanity. You can decide today to be loyal to yourself first.

Every time you cancel dinner plans to stay late at the office, you’re being disloyal to yourself.

Every salary negotiation that you half-ass, you’re being disloyal to yourself.

And every time you put a life goal on hold to climb the ladder at your 9 to 5, you’re telling yourself that your dreams don’t mean shit.

Stop.

Time to Make Your Dreams Happen

What can you offer the world? What skill, talent, or trait could you turn into a second stream of income tomorrow? Could you start making six figures on the side by …

The possibilities for living and working for yourself in the internet age are endless.

There are unlimited niches to fill and people who need you to fill them.

You can start by taking action.

What’s the very next step you can take to start building a second stream of income?

Tell me in the comments and I’ll see if I can help..

Image by audreyjm529.

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