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Happy turkeys

A turkey is fed for 1,000 days by a butcher, and every day confirms to the turkey and the turkey’s economics department and the turkey’s risk management department and the turkey’s analytical department that the butcher loves turkeys, and every day brings more confidence to the statement. But on day 1,001 there will be a surprise for the turkey… Nassim N. Taleb,

The above quote was originally with economists in mind, but it can also be applied to employees whose belief in their job security (based on past positive indicators such as performance reviews, bonuses, raises, accomplishments, etc.) remains strong right up to the moment their employer gives them notice.

Here are some headlines found on the Web this month:

I have to wonder: How many of those newly unemployed have a second or third source of income in place, such as investments, side hustle business, or rental properties? My guess is very few. But for those that do, I’m sure they sleep more soundly than those whose sole cash flow just stopped flowing. These headlines make it obvious that, despite being well into the economic recovery from the Great Recession and an improved job market, companies are constantly adapting and restructuring. No matter how secure you think your position is, when you’re 100% reliant on a single source of income, you ARE vulnerable.

With even a modest secondary income, you can mitigate the impact from becoming suddenly unemployed. During the good times, additional sources of income provide OPTIONS (there I go again, raving about having more options…). And when times inevitably turn bad, a second or third source of income can spell the difference between keeping afloat or sinking.

One advantage to a non-job secondary income is that it has no limits. Unlike a job position, which has a defined pay ceiling and typical growth rate of 2-4%, a non-job income source has no such artificial restrictions. Having a large active source of income with an average growth rate of 3% is fine, but when supplemented with small passive income sources that can grow at an annual rate of 15% or more? That’s a much better position to be in.

Another advantage to multiple sources of income is that of redundancy. If one fails, there are others to fall back on. When 100% dependent on a single income stream, you have to scramble to find another source of income while your savings are steadily devoured by your expenses .

I’ve been laid off twice in my life and it sucked, but I was fortunate enough to have a decent amount of savings at the time, so it wasn’t as devastating as it could have been. If I had a second source of income when unemployed, it would have helped to stretch my savings further, plus it would have also made me feel less desperate and more selective about the next job offer to come my way.

Developing a second source of income via dividend investing ranks among the best decisions I have ever made in my life. My current monthly dividend income isn’t enough to completely cover my monthly living expenses, but it’s more than enough to cover the utility bills and other lesser expenses. Another option is to apply dividend income to paying down the mortgage principle more quickly, taking 15 years off the 30-year mortgage and saving thousands in interest payments. If necessary, I could apply all of my monthly dividend income towards my minimum monthly mortgage payment, which is over 80% covered by dividend income. That would nearly eliminate any foreclosure worries.

Real security comes from having multiple sources of income to build financial resilience. Nassim Taleb’s parable is clear: Don’t be a turkey.

Image Credit: Scott Bauer (

This Post Has 9 Comments

  1. Virginia

    I valued reading this article because it reminded me that most of us are only one pink slip away from total crisis. In real life I am a crisis counselor, so my work is pretty similar to that of a social worker. I have the privilege of guiding clients through the hardest moments of their lives and coming out victorious on the other side. Unfortunately, many domestic violence cases are rooted in financial dependence and fear. I’m not saying that having a job will insulate anyone from domestic violence, but if I had a nickel for every time I heard something along the lines of, “I would have left, but I had no money/no income/no place to go,” I would be a multi-kazillionaire with no compelling need to help others find a little pocket money. Much of my work, what we call “case management” surrounds helping clients find work. Because in most states applicants are asked to reveal if they have a criminal record when applying for a new job, much of my work reverts back to teaching clients how to hustle. Nothing glamorous, just straight up hustling: collecting scrap metal, selling books, couponing, and learning to make nutritious meals from food pantry staples. This is a sober reminder, especially as we enter the spending season. Savings, killing debt, learning to cook (a big one for me, actually) – starting now makes all the difference in the world in the event of a financial crisis.

    Thanks for penning this. It is very impactful.

    1. Dividend Quest

      I’m glad you enjoyed the post. Over the years, I’ve been very fortunate to have not succumbed to “lifestyle inflation” which usually comes with a slowly growing paycheck. This has enabled me to slowly enlarge the gap between earning and spending, and to grow my dividend income portfolio. But I know I’m in the minority, and many people don’t have the financial resources to develop their gap to get into investing. Having a criminal record certainly puts one at a disadvantage, but it can be overcome with focus, intelligent hustling, and developing skills of value. I wish your clients all the best in their quest for a better life. Thanks for visiting.

  2. Free to Pursue

    So true! I would add that secondary sources of income also make us better at our jobs. We do better work when we feel we can stick our necks out and say what we need to say and do what we need to do. Constantly thinking about the need for a pay check can lead some of us to recoil, stay under the radar, keep our mouths shut or tolerate abuse or unacceptable work conditions because we’re scared of losing our job. Knowing we can walk away at any time if we find we’re in an unacceptable situation helps us stay focused and effective. We’re there because we choose to be.

    1. Dividend Quest

      Exactly. It’s true empowerment, isn’t it? When you have one or more forms of side income, you have more options available to you. I keep harping about options a lot in my writing, but it really is true. Having a side income (preferably passive), no matter how large or small, will certainly put a spring in your step while working your day job. There’s an almost Buddhist calm and confidence that begins to replace the fear and anxiety that comes from being 100% dependent on a single source of income. My dividend income isn’t enough to liberate me from the 9-5, but it has certainly made a difference in my life. Thanks for visiting!

  3. John

    The best work decision I ever made was to become a freelancer. My work is spread out over several clients so I’m not dependent on any single one. I, too, was laid off (actually transferred to locations that I didn’t want to relocate to) twice relatively early in my career, which served as great motivation to become a freelancer when I could.

    Not every profession lends itself to being a freelancer, but if you can, it’s certainly something to consider.


    1. Dividend Quest

      Nice to hear from a freelancer! I’ve been pondering the freelance route as a new avenue for side income. It is trading time for money, but the extra income is more substantial. In addition to the day job’s paycheck, it could give me more capital to work with, such as investing in my dividend portfolio or trying P2P lending. Being an experienced technical writer, freelance tech writing would be the easiest path to take, but I’m open to learning copywriting or SEO writing and taking that freelancing route. Thanks for visiting!

      1. John

        I agree it’s trading time for money, but the flexibility is great, and as you say, it’s more profitable (typically) than working for someone else doing basically the same job.

        It’d be tough to go back to a 8-5, M-F job!

  4. mi casa handyman san francisco

    Have you ever considered about adding a little bit more than just your articles?

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  5. Dividend Quest

    Thanks for visiting, and thanks for your suggestions! I agree that adding graphics and videos would enhance posts, and it’s certainly something I should do more often. I haven’t learned how to embed videos in posts, and that’s certainly something I need to tackle. Earlier this year i did make a couple graphics intensive posts about the Top 5 Advantages and Top 3 Disadvantages of dividend investing, which were a pleasant change from the usual posting format. I don’t think anybody wants this blog to become stale and boring, and I do have some ideas about how to keep that from happening.

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