Back when I worked for a salary — in 1979 — I thought my employer was on solid ground. But I still made the break. I had worked for over four years to start a newsletter business. It was finally making a lot of money. So, I quit my day job. I became self-employed.
I still write my monthly newsletter, Remnant Review. I publish it on my site, www.GaryNorth.com. But the company I worked for in 1979 has been out of business for 20 years.
If I had not developed my own side business, I would not be rich today.
But in either case, I am not retired. I never planned to retire. That is because I did not trust pension fund managers or the dollar manager: the Federal Reserve System.
In a fascinating article, Steve Denning discusses the half-life of Fortune 500 companies. What is half life? It’s the time it takes for a radioactive substance to lose half of its energy. In business, it’s the decay of productivity by 50%. In 1960, the half-life of Fortune 500 companies had been 75 years. Today, it’s 15 years.
Along the pathway down, people get fired. Think of the 200,000 people who lost their jobs on Wall Street in 2011. They thought they were set for life. Anyway, they did in 2007. They weren’t. Lehman Brothers died over a weekend. Others are shrinking fast. The losers get swallowed up. Think: Merrill Lynch. Think: Wachovia. Think: Bear Stearns. Then the firings begin.
What about your employer? Why do you think the firm will survive intact? Why do you think it will still pay you your monthly salary in five years? Are you crucial? Would you still be crucial if the company gets hit in the next recession. (There will be another recession.)
Read Denning’s article. It offers insights on what to look for. There are early warning signals that tell you that it’s time to shop for a new employer.