On Risk

I listen to a lot of audio about finance, one of the books got me thinking about risk. It specifically questioned a few definitions of risk, being an entrepreneur vs having one source of income. Risk is really the probability of an event multiplied by the severity of the consequences. Whether you're employed, self employed or unemployed, diversity helps. Working three jobs in the name of security is probably a stupid thing to do no matter how you cut it, but we can buy diversity through investments. Why we should has been demonstrated a number of times by people such as the former employees of Enron, Lehman brothers, and other collapsed companies. As a Canadian, I don't know much about the 401K system in the USA, but I'm told that employers exert some influence over the investment choices that people can make within the plan. I think that's largely to blame for that.
Anyway, back on topic, what are the risks for me? Well, I could get struck by a meteorite, lightening or more realistically, a car. That would be very bad for me. The first one, I really can't do anything about but the probability is so remote there really isn't a point in thinking about it. Avoiding large metal objects in lightening storms and looking both ways before crossing the street, sure that's simple enough. Then there's food poisoning, store foods properly and not for too long. All of this while very important is not really exciting discussion. As was discussed in the book I was listening to though, job loss, that's something that is somewhat exciting to talk about.
What causes job loss? Some of the causes are entirely up to you and entirely preventable, like the people who get fired for not showing up, showing up intoxicated, or act like a jerk. Other causes are hard to defend against, like if you were an Enron or Lehman Brother's employee and got swept away when the company collapsed. From what I've observed at my current job, job security happens in three stages.
The first stage is to be a learner. If you're going around learning about your job, your company and your co-workers and their job responsibilities, you're going to stick around. While learning is ongoing, the amount of time you spend learning drops significantly quickly.
The second stage is to be a doer. Show off your new skills and stay active. When the ax falls, it's going to be the less productive employees that go first.
The third stage is seems to be the one that people fail to transition to most often, becoming a teacher. Being the only one who can do your job isn't necessarily the key to job security. If you can get everyone capable of doing your job, you've clearly demonstrated a skill that others don't have, you can train employees. This typically also gets you a raise.
As for the other side of the coin, minimizing the severity of the consequences of loosing your job. You should probably keep a resume up to date, beyond that I wouldn't regularly browse job sites. Maybe keep a list of resources that you can use to look for work, but 20 minutes of looking will probably find enough to keep you busy for a while. Oh yeah, and having enough money to keep you afloat helps.