Having a source of income that is yours and independent is a common goal that many people share, but few achieve. We are all familiar with the concept of showing up to work, clocking in and out, and getting paid a wage for that. However, there are other ways to earn money, that do not involve you selling your time and skills to an employer or client, instead you invest those in yourself. Being self employed means different things to different peope: real estate, digital marketing, e-commerce, owning a restuarant or being a writer are all viable otions, and apply to this article. Keep on reading for my take on why you should be self employed:
You get to build equity for yourself
When you are employed in a conventional job in an office, retail, or hospitality you are usually not working at creating your own equity and instead are building that for someone else. If you decide to work extra hard and improve a process or technique used at your place of employment, the best reward you can hope for is a raise in the future, which is usually a single digit percentual increase, and in many cases, all you get is a slap on the back. Employers generally expect you to do your work and also keep an eye out for potential improvements and enhancements to your daily tasks. Coming up with a way to do things in a quicker, better, and easier way is often seen as a reward in and of itself as your job will theoretically become easier. If you arrange for a smarter way to allocate resources and cut the company costs by a few hundred dollars a month, that is great! However, it would be ludicrous to expect your manager to pay you personally the money you saved. If you manage to automate a part of your workflow and accomplish a task that was previously done in 2 hours, in 20 minutes, that’s amazing! However, you should not expect to go home an hour and 40 minutes earlier, instead, you might just get more work to do.
In contrast, when you have your own business or side hustle, all the extra work that you put towards improving it will directly benefit you to the fullest amount. If you spend a few weekends painting and improving a rental property that you own, the increase in rent will go towards your pocket. If you manage to automate a cumbersome part of your daily tasks necessary to run your e-commerce website, you just won more free time to do with as you please. Because you own all of the “means of production”, as Marx would say, you reap the fruits of your labor to the fullest extent. This is what makes owning a blog, shop, rental property, or anything that generates you money much more worthwhile and fulfilling. I know that if I write an article on this website that hits it out of the park and starts making me 50$ a day, I keep all of that money, there is nothing arbitrary about it and I don’t need to wait for the annual performance review, or depend on my manager’s mood, in order to see that increase.
There is no bureaucracy
For me, one of the most dreaded things in office life is the process of asking for a holiday. Often times an offer or opportunity for a vacation arises while talking to a friend and my neurons immediately start firing with ideas of great things to do and see. However, when working at an office, you need to bring yourself back to earth and consider the bureaucratic hoops you need to jump through in order to get the days off. First, there is the question of having enough vacation days, which depending on your jurisdiction can be very limited in number. If you do, you need to inform your manager, HR, or both, check with your colleagues and then wait for the approval. I’ve always found the process of asking for permission to go on a vacation demeaning and the occasions when the permission was not granted generally caused a mini existential crisis. Luckily, when you work for yourself this is never a concern and neither are millions of other pointless tasks that riddle office life.
Granted, thanks to the boom in remote work during the pandemic, even Excel clerks have the opportunity to work from a beautiful Spanish surrounding, without taking a single day off. However, if you want to explore a location properly, a few consecutive days off of work are needed and when you are self-employed that is much easier to arrange. There is no HR, there is no manager, and generally, no team to compete for good days off with. You make your own schedule and decide when to work and when it is time for pleasure. On top of allowing you to be more spontaneous with your travel, working for yourself also allows you more flexibility with the hours you work, meaning that you can potentially catch up on work at your own convenience.
You can scale your work
One of the issues with a 9 to 5 job is the lack of growth opportunities that exceeded a few percent. While it is natural and expected for you to receive a pay bump every year or two, those generally surpass inflation by a tiny amount and do not lead to a noticeable difference in living standards. If you want a real improvement in the amount of money you bring home, a rise in the hierarchy or a switch in employers is required. And that is only the case if you already have a decent career with opportunities for growth, if you are stuck in a minimum wage environment with a high turnover, you might be stuck at your present level of income for years. While this is the way most people earn and think about money, there are many more opportunities out there that can help you compound wealth and change the scale of your work and income. It can be hard to pick up a second job if you already work full time and a third one is near impossible, especially if you also want to enjoy life a little bit. However, when it comes to investments, businesses, and humbler side hustles, scaling up to 2x, 3x, or even higher is possible and even advised.
If you manage to create a website, a blog, for example, that is profitable and earns you money, creating a second one is even easier. Unlike a job that sucks out a lot of your time and energy, when creating something like a website, the more you have, the easier it is to make more. The hosting can be shared, you know how domains work by now, and all of the knowledge that you have accumulated in creating the first one can help you out in the second. Similarly, if you already have an apartment that you are renting out, it will generate you some income from the rent and can be used as equity when getting another mortgage. The knowledge that you have gathered from the first apartment will also be extremely useful when purchasing a second. The rich do get richer, but not because they let their money idly sit around, they invest and work for themselves, which leads to them getting richer…