[Fin Talk] The Future of Work & Financial Planning
By Arlyn Tan
When we talk of a secured future, do you envisage a lifestyle that would allow you to pursue passion, earn from it and still enjoy rest time? Are you on track in achieving the expected milestones despite the humps caused by the pandemic? Have you listed the sustainable sources of income or have you become worried because of the possible cash disruptions secondary to changes in the workforce landscape?
After a year and a half from the start of the pandemic, people are talking about reopening which is equated to economic recovery. The question to ask ourselves is how the reopening theme will impact our personal and family finances. Understanding the future of work will allow everyone in the family to start simulating income flows from new opportunities and pruning non-relevant activities or investments.
The McKinsey report on the future of work assessed the impact of the pandemic on labor demand , mix of occupations and workforce skills in China, France, Germany, India , Japan, Spain, UK, and USA. All these countries account for half of the global population and 62% of the GDP. These are the 3 major trends which contribute to the Future of Work:
1. Remote work and virtual meetings will likely persist
2. Faster adoption of automation and AI in work areas with high physical proximity
3. The mix of occupations may shift with little job growth in low-wage occupations.
Source: The future of work after COVID-19 Feb 18, 2021
Knowing the future of work can help us create a resilient personal finance. Being mindful of the roles of emergency or transition, milestone, and retirement funds in coping with the changes will help one to go through transitions with less mental stress. For breadwinners whose sources of income depend on industries which are projected to have decreased hiring need to consider investing in education for retooling purposes.
Since retirement in the Philippines is a responsibility of the individuals more than the government, everyone should continue investing despite the uncertainty. Some industries suddenly become irrelevant which means that expected company retirement funds may not contribute to one's future retirement. Learning to invest in mutual funds, UITF, stocks, properties, and businesses allows you to beat inflation, at the very least and consequently contribute to the capital appreciation.
For students who are incoming college freshmen, they need to have the future of work as a decision factor in the selection of a college degree. Although employers are keen on skills and capabilities more than degree, the supportive environment can provide a jumpstart for better opportunities after graduation.
The pandemic is not a stumbling block to a bright future when one is able to scan the present and make trends his ally. Having enough liquidity to support the family budget, the necessary milestones and unexpected circumstances are controllable factors to have successful work transitions.
Planning way ahead is the secret. When you planted the seeds 10 or 20 years before the due date, you can weather temporary or permanent turbulences. Noah and the animals survived the 150 days of rain and saw the rainbow at the end of the journey. Let us take the lesson that Noah taught us by heart: build an ark over decades. It was not raining when Noah built the ark.
Arlyn Tan is a Strategic Wealth Consultant. She helps individuals and organizations on how to maximize the value of their money through risk, health & wealth management. Her mission lies in making sure that clients achieve 3 things. First, they reach their milestones on time with sufficient resources. Second, they protect them from the impact of economic losses secondary to unexpected events. The third and most important is that they enjoy meaningful and balanced lives.
LinkedIn/Twitter: Arlyn Tan