Recently, FirstBank PLC wrote off bad loans in the billions, bringing their profit margins down to appallingly abysmal levels compared to last year’s results.

Of course, when companies have plummeting profits, the first casualty, as a part of a cost saving exercise, would be the staff. Thus, there is this strong likelihood that about a thousand would be let go off. This came from the CEO himself.

Those who would be thrown into the overflowing job market can’t determine, (yet) how unlucky they would be.

Numerous banks (and others companies in other sectors) have of course been rightsizing / downsizing for a while due to the bad economy. For many of these bankers, they have over leveraged on their earnings to the extent that any hiccup to their monthly regular income creates extreme financial tension /instability.

This certainly is not limited to banking alone. The average salary earner is said to be one paycheck from financial ruin.

The banker’s example / focus is more pertinent because of their legendary profligacy and less than sterling financial management skills, despite using / managing other peoples’ money.

The average worker, even the highly paid ones, need to undergo structural adjustment in the case of a sudden loss of job. This could entail relocating place of abode, the children’s school, and the relationship class orbital,

In this era of common sudden job losses, factories closing down due to the inclement operating environment, it can not be overemphasized enough to always have plans for a rainy day. This is by ensuring you have more than one source of income. You can then fall on other income sources in case you get axed from your salaried job abruptly, as often happens in banks, or you are unable to work, due to an illness.

Depending on your marketability or career stage, a layoff may catapult you to another orbit where you may never be able to find another one with pecuniary rewards and perks at the same level as the present one.

Photo courtesy -

Photo courtesy –

Parkinson ‘s Law has many variants, but the idea is that expenditure tends to expand to take up the valuable financial resources, unless one makes the effort to control this. The average worker then finds himself in the risky situation where he is only able to keep ahead of his ballooning expenditure by that regularly source of single income.. salary.

Risk is defined as having one source of income. And investing in risk is investing all your effort, energy and resources in pursuing a single line of income. Would you spend that £10,000 pounds in that training abroad to improve your employability? Would you use that financial resource to create an additional source of income?

It is an irony that most people work at a job with regular income, and believe they are avoiding the risky world of business by so doing. The truth of the matter is that the risk is in having an income that you don’t have direct control over, and that may stop when you are not quite prepared for it.

So, for those with that single source of income (salary), it is vitally important not to put all your investments in a risky single asset… your job. Have your money do some running, earning more. Have alternative sources of income. Set up some means of earning passive income, if possible .

Or, have some side business that you can nurture on the side. Three legs are better than two, and certainly better than one.

A few paragraphs should also be sufficient for the wise.

1 comment for “INVESTING IN RISK

  1. Tony Iduh
    May 7, 2016 at 7:23 am

    Beautiful! This is so true; I particularly like the part where you so clearly illustrate that there is more risk in pursuing a single income source eg Job. People trap themselves and only a few tell them about the danger.
    In this days of economic dryness, many workers suffer and will carry on that suffering unless they snap out of it.

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