Blogs > Your Money

Dave Patterson and Erin Preston, a father-daughter team of Certified Financial Planner® licensees, provide thoughts and suggestions on a broad collection of personal finance topics.  Information provided in this BLOG is intended to be of a general nature and may not be appropriate for all situations.  Readers should consult with their own financial advisors before relying on any information contained herein.

Monday, September 6, 2010

Maybe It’s Time to Diversify Your Skills

We are always emphasizing that investors need to make sure their portfolios are adequately diversified. Proper diversification can help increase returns and lower the volatility of your portfolio.

With Labor Day upon us once again, we couldn’t help but think about the fact that another type of diversification could serve investors well. Acquiring new skills can position you to weather tough economic times like we are now experiencing. Unemployment is currently at 9.6 percent. Well in excess of fourteen million people are unemployed in the United States.

Having a diverse skill set can help mitigate that unexpected pink slip. You may even find a job that you find more enjoyable, even though it may not pay as much as your old job. A part-time job can supplement your emergency fund (You do have an emergency fund, don’t you?) to help you bridge the unemployment gap.

Consider pursuing your passion. It’s not unusual for people to work their entire life at a job they don’t really enjoy. They are stuck in a rut and afraid to try anything else. Take a hobby to the next step by starting a part-time business. Take a course or two at your local community college. Go back to school to get an advanced degree or finish that degree you never completed.

Even if you never lose your job, you will be positioning yourself to make a job change that might just change your life for the better. You may be preparing yourself to pursue your passion in retirement, doing what you love and at the same time supplementing your retirement income. With the Social Security system stretched and high inflation likely down the road, it will be tougher and tougher for people to save an adequate amount for retirement. Having the skills to supplement your limited retirement funds may make all the difference to what otherwise might be a stressful time.

While working at Pontiac Motor Division I (Dave) went back to school at nights
to obtain a business degree. There’s no doubt in my mind that doing that helped me advance my career and helped me obtain a better job when I needed a change. More importantly, during my business classes, I took a course on investing that led to my interest in financial planning. Little did I know that seeking new job skills would lead to a new career that has made it possible for me to work part-time well into my retirement years.

Diversifying your skill set will give you added flexibility to weather whatever storm comes your way while at the same time enriching your life experiences. It might be just as important as having a diversified portfolio.


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