There are few among us who really and truly find deep life satisfaction from our paid employment. If you are one of these Fortunate Few, then you are truly blessed. For the rest of the good people reading this little blurb, I would urge you to err on the side of caution.

Whatever do you mean, Blue Lobster?

Gentle Reader, do your Future Self a good turn. Even if you love your job today, always invest part of your paycheque for long-term growth. Start small if you must – $1/day – but just start. There’s no guarantee that you will still love working tomorrow. You may wake up one morning and want to do something else with your life. Yet, if your only source of cashflow is your job, then you’re a little bit stuck. Doing what you love may not pay the bills, and that can impede your ability to shelter, feed, and clothe yourself. No one wants to be impoverished.

Recently, I hit something of a milestone – 20 years with the same employer. Not many people can say that these days, so part of me is kind of impressed with this achievement. However, another part of me is counting down the days until retirement. While I’ve been at my job for a long time, I’m not as enthralled with it as I was when I first got here decades ago. Time has flown by in the blink of an eye! Had I known then what I know now, I would’ve made some different choices.

From my vantage point, the message of investing for the future is not sufficiently impressed upon the new or younger employees. Bright-eyed and bushy-tailed, clutching their newly-minted credentials, eager and excited – these newbies rush headlong into the new careers and probably enjoy the challenges and responsibilities that come with their first grown-up job. And that grown-up job probably comes with a grown-up paycheque, or atleast one that’s bigger than the part-time jobs they may have held up to this point.

Throw in a little pent-up demand and it’s the perfect recipe for the start of paycheque-to-paycheque living. It’s also a great way for employees to become beholden to their jobs. Monthly payments come in a wide variety of flavours: mortgage/rent, vehicle payments, student loans, streaming services, memberships, subscriptions, etc… What do they all have in common? They all take little bites of your paycheque. Each one allows you to make life a little more comfortable today. They very definitely prevent you from seeding your investments to ensure your future financial comforts. And they keep you tied to a job.

I’m lifting my voice and urging the young or new Eager Employees to just take a breath. Contrary to the “advice” of the Marketing Machine, there’s no requirement to commit every penny to spending. In other words, you need not spend it all now. I’m here to spread the message that it is perfectly okay for you to slice off some of that brand-new paycheque and invest it for the future.

Why consider doing this?

Take a look around. Are there any… ahem… senior employees lurking about? Do they seem filled to the brim with passion and energy about their current positions? Perhaps they are less enthused about devoting 2 or 3 decades of their lives to the workplace. Is there even the slightest possible chance that very deep down in their hearts they would leave their jobs if they had the money to do so?

If the answer might be yes, then ask yourself if you want to in their shoes when you hit your 20th year of working for someone else. Wouldn’t you rather have the option of working because you want to and not because you have to?

Err on the side of caution. Create a stream of cash flow from your investments. How? By buying investments that pay dividends and capital gains. Instead of spending those investment returns, re-invest them consistently. The more you invest today, the faster your investment returns will compound. If you want an excellent example of someone who has put together a solid investment plan by investing in dividend paying stocks, check out Bob Lai’s story at Tawcan. He regularly updates his investment portfolio returns and tracks his dividend growth. If I understand him correctly, he will be relying on a steady stream of dividends to fund his retirement. Another great blog to follow is that of Mark Seed at My Own Advisor. I’ve learned a lot from both sites, even though I may not have adopted and followed every single one of their recommendations.

Allow me to very clear – your investment portfolio should be working harder than you do. Invested money works 24 hours a day, 7 days a week. It doesn’t get sick, take vacations, or need time off to attend to personal matters. The sooner you put your money to work, the better. Investments can work magic for you but they do need time to grow.

And when the time comes when you no longer want to work for a paycheque, your investments should be able to fund your lifestyle.

Think about Future You and err on the side of caution. If you love your job in 20 years, then you’ll be happy at work with a generous cash cushion on the side. Nothing wrong with that! However … if there’s a chance that you won’t be so enamored with working every day, then you should be taking steps now to create the option of leaving if working become unbearable. I strongly urge you to do the following:

Your investments will give you options when you’re ready to part ways with your employer. You won’t have to worry about the axe falling, since you’ll have a nice, big cash cushion upon which to land. Your investments can be arranged so that they replace your paycheque. How nice is that?

And if you find yourself among the Fortunate Few who still love their employment after 20+ years, then so much the better. You’re doubly blessed – a job you love AND an investment portfolio that churns out dividends & capital gains. It’s the best of both worlds.

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