The Financial Impact of Traditional Jobs has been significant in the last few years, specifically a 9 to 5 job, has many benefits that make your life very comfortable. These include a predictable paycheck, employee benefits, and a set schedule. Although these benefits can make your life more comfortable, there’s a flip side to this, an unintended side effect. These comforts that you get from your 9-to-5 job can ultimately make you broke.
The 9 to 5 gig can give you stability in life, but it is that stability that the job brings that typically causes you financial problems. In this article, I want to talk about six reasons why the 9-to-5 job keeps so many people broke.
Getting False Financial sense of security doing Traditional Jobs
First reason
You get a false sense of security. The biggest reason that the 9-to-5 job keeps people broke and living paycheck to paycheck is that there is this lie that people tell themselves when they have Traditional Jobs, and it is that their job is safe. Many people who work 9-to-5 jobs feel secure because they have benefits such as paid time off, protective benefits, and what they perceive as a guaranteed income.
Although it’s good to feel safe, when people feel extremely safe in life, they rarely take steps to prepare for bad things that will happen in life because they think, “I’m satisfied now, and this job will keep making me comfortable 5 years from now.” However, what often happens is that they end up coming to realize this safety they thought they had been just a myth. One day, their company downsizes, they get laid off, and they have no financial safety net to run into issues.
Traditional Jobs keep people broke because it gives them this false sense of security. They think that their life is safe, and when they feel that way, they don’t take steps to prepare for life’s surprises. But no job is 100% safe, and you should always take steps to prepare financially in case something happens.
The Financial Trap of Traditional Jobs: How a Predictable Paycheck Encourages Living Paycheck to Paycheck
2nd reason
A predictable paycheck encourages you to live paycheck to paycheck.
Probably the biggest benefit of being a 9-to-5 employee is having this predictable paycheck, where you know how much money you will make month after month. Because knowing how much money that you’re going to make each month gives a lot of certainty in your life, you can base your life and your decisions around that amount.
You can make long-term decisions like getting a mortgage, creating a higher budget as you know what you’re making, and planning for the future more. However, what often happens is people get in the habit of thinking that the paycheck will always be there, and they start living paycheck to paycheck. They get paid at the beginning of the month, spend it all, run out of money near the end of the month, and wait for the next paycheck to come.
Financial Vulnerability in Traditional Jobs
As they live their lives, they assume that these paychecks will never cease and that they will receive them without fail. However, when something does happen, like they lose their job and the paycheck stops coming, they can’t even survive for one week because they didn’t prepare.
The 9-to-5 job typically keeps people broke because people end up developing this expectation that their paychecks will always continue coming, spending everything they make, and not being prepared for life’s surprises. But as I just said, no job is 100% safe, and you should never expect that your paychecks are always going to be there. You should take steps to prepare financially in case something does happen, and your paychecks stop coming.
Traditional Jobs Encourage You to Delay Action
The third reason
A predictable paycheck encourages you to delay action. So, as I just said, when you have the certainty of this predictable paycheck, you often get in the habit of living paycheck to paycheck. Believing that paychecks will always be there, this certainty often leads people to postpone taking action to achieve their financial goals and create increased financial security in their lives.
For example, imagine two people both make $100,000, but one person is on a one-year contract while the other is a full-time employee. Now, let’s say they both want to save for an emergency fund. The contract employee might express, “I am only contracted for a limited time with this company.” I need to be competitive and a year later, they saved $155,000. Whereas the full-time employee might say, “I’ll be here for a while,” and one year later, they only save $5,000.
The reason that the contract employee could save more was simply because his contract gave him this sense of urgency, whereas the employee felt safe. People in Traditional Jobs remain broke because they feel comfortable and believe their income will be guaranteed in the long term, causing them to delay taking action to reach their financial goals.
When you believe that your paychecks will always be there, and you’ll always have the option to save money, what’s the rush to reach your financial goals? This is the mindset that many people have, but no job is certain, and you should always feel this sense of urgency to take action to reach your financial goals because nothing in this world is certain.
Traps You In One Financial Stream Of Income
The fourth reason
It traps you in one financial stream of income. As I mentioned, the comfort and security that you get from Traditional Jobs typically prevent you from taking action and make you want to live paycheck to paycheck. This is very dangerous for two reasons: one, it traps you into only having one stream of income, and two, making money is 100% dependent on your labor, which keeps people in this never-ending quest to make money.
If something happens, like you get sick, and you can’t work, then 100% of your income stops, and you go broke. There’s a quote by Warren Buffett that goes, “If you don’t come up with a way to make money while you sleep, you will work every day until you die.” The Traditional Jobs and their predictable paycheck often keep people broke because it makes people content with being 100% dependent on one financial stream of income.
However, it’s so important for everyone to diversify and create multiple streams of income in your life, which is realistic for everyone to do. For example, Financially you can invest in index funds to generate passive income, get dividend payments from your investments, or have some side hustle you do on occasion. Even if only accounting for 10% of your income, having multiple streams can help during layoffs.
It is crucial to diversify your sources of income and not rely solely on a paycheck, especially those directly tied to physical labor.
The Reason Number 5
For people who have Traditional Jobs, you’re probably not working 9 to 5. You’re probably working a lot more. Most people get up at 6:30 to prepare for work, leave for their hour commute at 7:00, get to work at 8:00. Have a 1-hour unpaid lunch around noon, finish the day a bit late at 5:30, drive 1 hour to get back home, get home exhausted at 6:30, make and eat dinner by 8, and watch TV until 10:30, and then go to sleep, which is your whole day.
Capitalism and Its Impact on Your Financial
You’ve got to love capitalism. You all have to work hard, so these corporate executives can enjoy their summer in the Hamptons. But you have your entire day working, and so you don’t have time to do other things. For example, say you have a low-paying job, and you want to look for a high-paying job. Well, your week’s schedule is full, and the only time to look is on the weekends.
Reason Number 6
The ultimate reason that Traditional Jobs keep you Poor is it creates fear of trying something new. One thing I’ve noticed with people is as they start to get older and get more established in their careers. And start having things like a good job with benefits, a higher salary, is that they start to feel comfortable. This comfort creates this fear of moving on to something new, something possibly better, because now, as they have got older, they have something to lose.
When I look back 2 years ago on my decision to quit my job and pursue blogging full time, it wasn’t a hard decision to make because at that point in my life; I didn’t have anything to lose. The career path I was on wasn’t one I wanted to continue. The decision took me about a week to make because I didn’t care if I lost these things.
Losing Your Financial Freedom
But when you’re in the 9-to-5 industry for so long, you lose the Financial freedom. You develop this fear of losing all the things that you have built up over the years, and moving to something else would seem like starting from nothing again. Traditional Jobs keep people broke because it is a very comfortable life. You have a predictable paycheck, employee benefits, and a set schedule. Why would anybody that has those things want to give them up to choose something else?
Golden handcuffs, as people commonly know it, ultimately prevent them from taking chances in life and moving on to something that might be much better for them They pick to play it safe with their predictable paycheck and spend it all, living paycheck to paycheck, and being a good consumer to feed the wheels of capitalism.