Steadfast Finances
A Personal Finance & Investing 101 blog that delves into current events, consumer education, and techniques to improve your bottom line.
P2P Investors Beware: Not All Government Jobs are Safe
I ran across this eye opening headline last night on the 6 o’clock NBC News…
Maywood, California. – City government is laying off every single city employee. Even the emergency response employees.
That means police officers, fire fighters, emergency medical service (EMS) responders, or any other local government employee for that matter, will no longer be employed by the city of Maywood. Any necessary work will be outsourced to surrounding cities. In other words, it’s time to do more with less.
No doubt, it’s tough times for those adversely affected by the job cuts and budgetary shortfalls.
But this type of headline also calls into question a widely held belief that I and many other P2P investors probably have: that government jobs are usually a safer investment than private sector jobs.
One of the key metrics that I use in my Lending Club investment strategy is job security, as well as, how in-demand the loan applicants career/profession might be should he/she lose their job. Among my preferred choices were state and local government employees who had a fairly high level of seniority, but according to news releases like one from Maywood, CA, government jobs may no longer be the safe haven in the future.
In no way am I saying that you shouldn’t invest in P2P promissory notes when it comes to government employees. Far from it actually, considering the risk of job loss is still probably less than that of private sector jobs (depending upon their geographic location), but what I am suggesting that it’s probably a wise move to pay more attention to job security across the entire spectrum, and not give state and local government employees a free pass if this is a metric you use in your social lending strategy.
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3:04 pm
Like any investing, it’s proper asset allocation. Not too many people from a specific geographic area, or type of job (ie government).
That is something you should look at your existing notes.
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