Investing? Side Hustles? 3 Essential Steps to Stop Being 100% Dependent on Your Employer
The lifetime employment system is a unique Japanese business model where companies commit to employing individuals until retirement.
Under this system, as long as the company remains solvent, employees enjoy a sense of security with a stable income and little fear of dismissal.
However, in recent years, an increasing number of companies are reconsidering this model due to global economic shifts and increased competition.
We are currently at a major turning point. While it was once common to work at a single company until retirement, we now see a rise in career diversification and job hopping.
While the end of guaranteed lifetime employment is a significant change, I believe it is also a golden opportunity to redesign your life.
In this article, I will explore various options for achieving a lifestyle that is not 100% dependent on your employer, including specific methods to get started.
The Danger of Relying Solely on Your Company: 3 Major Risks
In an era where lifetime employment is fading, relying entirely on a single salary for your livelihood carries the following risks:
1. Job insecurity
An increasing number of companies are reviewing the lifetime employment system, and it is easy to imagine that this system will continue to decline in the future.
Therefore, due to the company's financial situation and market fluctuations, the risk of sudden layoffs or dismissals is likely to increase.
This risk tends to rise with age, and this trend is unlikely to reverse.
2. Career Stagnation
Career Stagnation In the past, staying with one company was the norm. However, long-term tenure in a single organization can lead to a narrow skill set.
This makes it difficult to adapt to other work environments when a career change becomes necessary.
3. Economic Risk
Financial Risk Being 100% dependent on a company means having only one source of income. Consequently, your personal quality of life is entirely tied to the financial health of your employer.
3 Methods to Achieve Independence from Your Employer
For many office workers, "work" is synonymous with "the company."
Many assume that belonging to an organization is the only way to earn money. I was once one of them.
However, in an era where you can no longer rely on a single entity, you cannot design a proper life plan if your company is your entire world.
So, what specifically should you do? Here are three methods to consider:
- 1. Side Hustles and Freelancing
- 2. Career Transitions (Job Hopping)
- 3. Investing and Asset Management
1. Side Hustles and Freelancing
By starting a side business or taking on freelance projects, you can diversify your income streams.
Many companies are now permitting side hustles, allowing employees to gain diverse skills and increase their earnings.
Having a side hustles increases the possibility of living a life that doesn't rely too heavily on the income from your company.
Freelancing offers flexibility in terms of schedule and location, and it often has a higher income potential than a fixed salary.
You can choose work according to your own schedule and freely decide when and where to work, allowing for a flexible way of working and the potential to earn a higher income than a fixed-salary job.
On the other hand, depending on the amount of work and the client situation, income can be unstable, so quitting your salaried job and starting right away might be a high hurdle.
It may be worth considering if you have expertise or skills in a specific field.
However, since income can be unstable, I recommend starting while you are still employed rather than quitting your job immediately.
2. Career Transitions
Changing jobs to leverage your current career or moving to a different industry can break your dependence on a single employer.
"Reskilling"—the process of learning new skills, especially for the digital transformation (DX) era—is key.
Acquiring new knowledge allows you to build a career path that is not tied to your current company.
3. Investing and Asset Management
Through investing, you can earn income other than your salary.
Since "money works for you," it is possible to sustain your lifestyle without physical labor.
Whether it is stocks, real estate, or investment trusts, the key is to find the method that suits you best.
(Reference: How to increase disposable income in the era of inflation)
Crucial Warnings Before You Start
I have personally experienced all three of the methods mentioned above.
Based on my experience, here are the pitfalls you should be aware of:
1.Side Hustles:
It is vital to build a "system" where money flows in even when you are not physically working.
To put it simply, it's about starting a ramen shop and creating a system where the business can run without you having to cook the ramen yourself.
For example, in my case, I treated real estate as a rental business and outsourced the operations from the beginning.
Real estate investment essentially means becoming the owner of a rental property business.
(Reference Article: Investment for Achieving FIRE - Real Estate Edition)
2. Career Transitions
Changing companies does not necessarily eliminate employment risk.
You are still dependent on another organization's management and culture.
The stress of building relationships in a new company may be the same as before or even greater.
I once experienced a situation where the company I moved to was sold, forcing me to change my plans again.
3. Investing and Asset Management
There are various ways to invest and manage assets, but it is important to understand beforehand that there is a real possibility that the value of your assets could decrease.
Also, depending on your age and current situation, certain investment and asset management methods may be more or less suitable, so be careful not to start just because it’s a trending topic or because the government is promoting it without doing proper research.
For instance, while the "NISA" (tax-exempt savings) program is popular in Japan, I view it as a form of "savings with risk."
It recommends long-term accumulated investments, an investment method based on the idea that 'if you start accumulating now, by the time you retire in 20 to 30 years, your money will likely have grown.'
It is an approach that aims to earn returns over time by diversifying risks while expecting market growth.
The government is trying to actively promote it, but we should understand that there is no such thing as an investment without risks.
However, I don't think it's a bad investment method. It's not 100%, but I believe it has a certain degree of effectiveness and reproducibility.
In other words, in the case of regular investment, there is a real possibility that the asset value could be negative for a certain period of time.
As long as you understand that and invest through regular savings, there’s no problem.
It is suitable for young people who trust that they can continue working for a certain period at their current company.
I think it’s not suitable for middle-aged and older people who feel anxious about their future while living their current company life.
There is not enough preparation for the risk of quitting the company or the company going bankrupt in the near future.
Since this is an investment method that doesn’t primarily aim to maximize monthly cash flow, you won't be able to maintain your lifestyle if your salary stops.
Summary
In this article, I have outlined three ways to stop being 100% dependent on your company.
You don't have to choose just one; you can combine them—such as investing to grow assets while seeking a better career.
This is exactly how I eventually achieved FIRE (Financial Independence, Retire Early).
If you feel that relying 100% on a salary is risky, I encourage you to start where you can.
The only way to achieve true independence is to start small and learn through trial and error.
About the Author Kenji Kamioka
CEO, Julius Inc. / FIRE Practitioner
Kenji Kamioka is a former IT executive who spent 30 years in the corporate world, with over 10 years working across Asia. His life changed when he read Rich Dad Poor Dad.
Realizing the trap of the "rat race," he started building assets in real estate and stocks while still working. It took him 10 years, but he successfully achieved Financial Freedom and graduated from the salaryman life.
He established his own asset management company to optimize tax efficiency and now dedicates his time to teaching others how to escape the corporate cage.
His advice is not theoretical but based on the gritty reality of achieving FIRE.Credentials: AFP (Affiliated Financial Planner), Certified Real Estate Transaction Agent.
Book
❶『令和のサラリーマンの為のFIREのススメ』(Amazon電子書籍）
❷『FIRE Recommendation for Office Employee』(Amazon Kindle）
