Economy and You - What are your choices?

International Monetary Fund (IMF) projected a sluggish couple of years we are heading towards. Moody's Analytics predicted the global economy to grow at 2.7 per cent in 2022 and slow to 2.3 per cent in 2023. The impact is already visible in the form of mass layoffs in tech giants like Google, Meta and many others. Smaller companies are also going with 3-5% reduction on their workforce in the name of low revenue and huge loss they incurred in the last year or two. I am sure you would have known some if not many who were impacted by the recession we currently are in.

After the Wave 2 of Covid, when world had barely resumed to the new normal, we got into Russia-Ukraine war. Followed by China Real Estate Crisis.

Market is not good and that may hit you tomorrow or the day after. What preparation have you done incase the employer decides to let you go? Do you have a backup? When we go for a long drive, we ensure the car has a stepney or a spare wheel. Do you have one for your income too? What if the meltdown sucks away your Only Source of income, do you have enough to take care of your household expenses for next 6 months? Will your lender give you moratorium of six months (or whenever you get another job) for car or house EMIs?

During interviews for my entrepreneurial venture I often ask this to the people and sadly the answer I get is, they never thought in this direction. We rely so much on one source of income that we never pay attention to the fact that, that is the ONLY source of income. If you depend on One Source of income, you can never be secured and financial instability will continue to haunt you specially in the age of global economic transformations. During 2008 meltdown, we saw how many people lost jobs, how many could not get a second job. Many who were sent back from US and UK could not match the income requirements their needs had. 2020, during global lockdown, many people were sent home, small businesses were shut, big corporations had production halted and real estate/construction workers became jobless. 

2008 was for High Tech jobs, 2020 was for everyone outside of those cubicles. You got to decide if you need a second source of income or not. Experts say, You Must. 

Let me explain Why.

If you have 100 Rupees coming from 10 sources (which means 10 Rupees per source) it is better than 100 Rupees coming from 1 source. In case that one source is impacted, you lose the whole amount. But in case you have 10 sources of 10 Rupees each, even if one source is impacted - you are still left with 90 Rupees. Experts call it Income Diversification. Do not get confused with moonlighting as that has a different definition (You can read about it on another article/blog). But diversifying your income source will give you a sense of security which will not only help you shape your future but also stay calm and free from anxiety/fear that most of us get most of the times.

What are your choices then? Mine is the Entrepreneurial Venture I was quoting above. What about You? 

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