The normal life-financial strategy in the UK is to focus initially on developing one particular skill which one then employs to earn money, in the form of an ‘income’. Later on in one's career, one might go on to either refine or diversify into related skills, thus earning more as one 'progresses.'
Granted, there may be a few periods of re-training and reskilling throughout the course of one’s life, but generally speaking most of us rely on one focused skill at any one time to bring us in our primary income.
The problem with this all too common strategy is that it makes one vulnerable to income shocks if one’s primary skill becomes redundant (through AI advances for example), or lowers significantly in value, possibly because of large amounts of other people entering the market with the same skill.
I wouldn’t advise against skilling up and having one main income generating skill, this strategy has worked well for me over the years, but I would advise people to develop their ‘financial resilience’ by focusing on developing other areas of their life other than just constantly re-training to keep their main career related skill(s) up to date.
Developing financial resilience through ‘side hustles’
Increasingly, people are looking to earn money from a broader range of skills, their hobbies if you like, that they do in their leisure-time - and just like people’s interests, the number of different ways people earn money through ‘side hustles’ is huge, and can include everything from selling physical or digital products one makes to matched betting.
Personally I find the increasing tendency towards the ‘side-hustle’ encouraging, as anyone who has a side income is more financially resilient than someone reliant purely on their main career income.
All other things being equal, the more diverse someone’s income sources, the more resilient to shocks one’s income is!
The idea of the ‘side hustle’ in addition to one’s primary-employment income is only one aspect of developing ‘financial resilience’, one which still involves increasing one’s income through work. Possibly a more efficient way of increasing financial resilience is to invest in a diversified array of financial assets, which return a passive income over time.
If one lacks money to invest, it is even possible to increase financial resilience by reducing one’s dependency on money - which can be done, as I see it, primarily in two ways…. Investing in physical assets such as land to grow your own food, and personal ‘assets’ such as networks - find a friend who is willing let you rent their room for ‘mate’s rates’ and you might save yourself a few hundred quid a month on rent!)
A framework for financial resilience
I like to think of there as being four main aspects to developing financial resilience - the examples in each box are indicative and not exhaustive.
Financial resilience through physical assets
This is the journey I’ve wanted to embark on since I was a teenager, I’ve just had a 25 year ‘career break’ from it first.
If I can buy or find enough land (3-5 acres should do it in a temperate climate) then after a couple of years of getting it established I could meet a significant portion of my basic survival needs from that land.
The theory and practice of Permaculture describes pretty much everything I’ve got in mind, a praxis which flows into at least two of the other three boxes as well.
Financial resilience through social networks
I can’t kid myself - I wouldn’t get the rewards I do on Hive had I not attended those two pre-Hive fests and hung out on Discord - when people know you, they are more likely to reward you (assuming yer not a twatt, which I’m generally not).
Then there was the teaching job I got last year through an ex-work colleague, the people who have helped me move house in the past, and so on. Networks are crucial for financial resilience.
Further, if I didn’t have the resources to buy my own land, I could instead skill myself (box 4) up and make myself useful to someone else to help them develop their land.
Financial resilience through skills
The more basic skills I’ve got, the less dependent on money I am. TBH this is something I lack big time, with the exception of being able to grow food, I’ve done that, I’m not that practical, although I’m sure I’m capable of putting up a basic shed to live in and installing a wood burner.
Having a basic level of skill in a diverse array of areas could save me a fortune (painting my own house for example) or be a nice little source of side-income, or skill-swapping if I've got the networks.
Of course if I could get skilled at a couple of things, I become more useful within a network, so that’ll be something to think about.
Financial resilience through investments
I don’t think this needs too much explaining - I’m into crypto partly as a resilience strategy against mainly fiat inflation, but I also hold stocks and some gold and silver.
Final thoughts
seeking to enhance any of the above can help your financial resilience - for me, my path was pretty standard at first - one job, one income, then I focused since 2014 on developing income resilience through side hustles, which has worked very well, and alongside that I’ve diversified my investments, and I’m happy enough with those.
Finally it’s time to work on what I think is going to be the most fun, and also the most fundamental aspect of financial resilience - the physical assets side of things!
Earlier today I booked my Shuttle ticket to Calais, for the 27th September, and some accommodation near Penamacor Portugal for the 29th - then it’s time to search for some land!