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That is a matter of opinion and not always dependent on desires to be rich. IMO, regardless of wealth, a day job is by FAR the worst option.
I think it depends a lot on what you do.
If you're a carpenter, obviously it doesn't make sense to be working for somebody else at age 47.
If you're a doctor, you can get paid a lot of $, and have a pretty flexible job working only 40 hours, sometimes less. What would be the reason to open your own practice and take on liability and have to comb in clients yourself when you're already making $125,000 a year?
$ is the answer. Which, there's nothing wrong with it. I'm just saying.
It's a case by case basis, but in general, if opening your own business was such a good idea, everybody would be doing it, because the vast majority don't love their jobs.
A rehearsal studio where I play around here is closing up shop. They had to beg for $ to try and stay alive. The owners put all of their saving and heart and soul into it. That's the reality of opening your own business.
Of course, I realize farming yourself out as a consultant/skilled contractor is a little different...
If you're a carpenter, obviously it doesn't make sense to be working for somebody else at age 47.
If you're a doctor, you can get paid a lot of $, and have a pretty flexible job working only 40 hours, sometimes less. What would be the reason to open your own practice and take on liability and have to comb in clients yourself when you're already making $125,000 a year?
$ is the answer. Which, there's nothing wrong with it. I'm just saying.
It's a case by case basis, but in general, if opening your own business was such a good idea, everybody would be doing it, because the vast majority don't love their jobs.
A rehearsal studio where I play around here is closing up shop. They had to beg for $ to try and stay alive. The owners put all of their saving and heart and soul into it. That's the reality of opening your own business.
Of course, I realize farming yourself out as a consultant/skilled contractor is a little different...
Maybe the doctor wants the freedom to work in another location (e.g. a caribbean island or a ski resort town). Maybe they are not interested at all in money and start a free clinic in a low income area, or work in Africa with AIDS patients... So many different motivations for careers - money is not always so important.
Hopefully the shop owner learned from this experience. Maybe he was in the wrong market and made some mistakes. Plenty of owners fail and later find success. And there are some who are not cut out for it, regardless of money. Maybe they have a fear of failing and the unknown. Maybe they favor security over risk or are not educated on the process. So many other reasons than money.
It's a case by case basis, but in general, if opening your own business was such a good idea, everybody would be doing it, because the vast majority don't love their jobs.
There are a lot of reasons people don't start their own business. I know several people who desperately want to start something. The problem is they don't know what to start or they are risk adverse. They continue to search for the perfect business model or they think they need to start something new and innovative. No, you just need to do a little better job than the competition.
When people who want to start a business learn of the down sides, they start a new search and the circle continues. Hint: there will ALWAYS be downsides of every business. And like anything in life, there will be trade-offs when you work for someone or work for yourself. For me at least, it is a no-brainer. I simply buy at wholesale and sell expensive items for more money than I paid for it. I just help people pick a technical solution and sell it for more money than I pay for it. I also manufacture a product and sell it. I don't have a factory, employees, etc. But I can sell and I am technical and I know what the market wants.
So nothing says you have to write out a $8K in monthly rent to be in a retail facility. There are a lot of small businesses that work out of their home. So my rewards are high and my risks are extremely low. Now when the economy tanked my income plummeted. I subsidized what I did for 4 years (I rented out two of my vacation homes by the week and pulled in $$'s to fill the gap). Now that the economy is better, we no longer rent those out and I am back focused on selling my widgets.
So why on earth would I want to be a doctor making $125K a year when I can work part time over looking the lake for more money and working 20 hours a week? If I was a doctor, I would want to make >$500K. If I was a doctor I'd work my butt off for 20 years and coast the rest of the way so that I can enjoy life.
Smart motivated people really think it is difficult to make a lot of $$'s and start their own business. It isn't. Look around you and see how other people are making it. Copy an idea you like in another part of town and do it better. Heck, go to work for them and be a sponge. I have not used my engineering degree since 1995. I didn't put that constraint on myself.
jobaba. You are obviously a smart person. Don't be stuck in your paradigm.
Last edited by MN-Born-n-Raised; 08-26-2013 at 06:58 AM..
So why on earth would I want to be a doctor making $125K a year when I can work part time over looking the lake for more money and working 20 hours a week? If I was a doctor, I would want to make >$500K. If I was a doctor I'd work my butt off for 20 years and coast the rest of the way so that I can enjoy life.
Those 20 years also happen to coincide with those years when you're raising your kids, and often the declining years of your parents. You're probably also already in your early 30's and just wrapping up ~10 grueling post-undergrad years of med school, residency and fellowship. For many of the doctors I know, the line of thinking once you become an attending is that now is the time to enjoy your life and your family.
I tried repping you but "I have to spread it around". Agreed.
I'm am NOT in the top 1% of total brainpower. In the engineering field I was definitely in the bottom quartile. I would not have a chance to get into an Ivy, become a doctor, or have a shot to work on Wall Street. But I certainly can use my savvy skill set, common sense, and drive to make more $$'s than anyone would hire me for. So as I use to joke (and in my prime motivation years), I made more than my bosses-bosses-bosses boss at Honeywell. And I barely used a nickels worth of college. I didn't have to look over my shoulder with the next re-org either, plug away at a Master's, kiss my bosses butts etc.
As you say Momma_bear, it's a different mindset and a rewarding one.
I tried repping you but "I have to spread it around". Agreed.
I'm am NOT in the top 1% of total brainpower. In the engineering field I was definitely in the bottom quartile. I would not have a chance to get into an Ivy, become a doctor, or have a shot to work on Wall Street. But I certainly can use my savvy skill set, common sense, and drive to make more $$'s than anyone would hire me for. So as I use to joke (and in my prime motivation years), I made more than my bosses-bosses-bosses boss at Honeywell. And I barely used a nickels worth of college. I didn't have to look over my shoulder with the next re-org either, plug away at a Master's, kiss my bosses butts etc.
As you say Momma_bear, it's a different mindset and a rewarding one.
I never disagreed with that. Nor do I have any desire whatsoever to be in the 1%. That is just way too much $. If I made that much on my own, I'd have to spend half my time figuring out how much to donate. I was just responding to somebody's post, maybe yours.
The truth is that the salary of most careers which require a college degree, even higher level degrees, are grouped around a certain pay range, around 40K to 70K. Whether it be social worker, teacher, engineer, etc, the median of most careers fall within this range. Some people make more, depending on living area, if they make it into management, or a specific career.
I have some friends that have their own business. Everything from running websites, to law practice, to accounting, to selling furniture. Many of them do in fact have degrees from Ivy schools (the one in NYC specifically). I've observed them.
Every hour not worked when you own your own business comes out of your own pocket. When you're working for somebody else, you're not really working 40 hours. You are there 40 hours. When you screw up, you don't take all of the heat. One of my friends works 7 days a week, almost 10 hours a day six days.
Now ... if you can go into business with family. That is a good business model. Your partners are people you can trust and you don't have to take it all on your shoulders.
I think it's great that you've made a great living selling widgets for 20 years. But I don't think it's the best option for everybody.
I never disagreed with that. Nor do I have any desire whatsoever to be in the 1%. That is just way too much $. If I made that much on my own, I'd have to spend half my time figuring out how much to donate. I was just responding to somebody's post, maybe yours.
The truth is that the salary of most careers which require a college degree, even higher level degrees, are grouped around a certain pay range, around 40K to 70K. Whether it be social worker, teacher, engineer, etc, the median of most careers fall within this range. Some people make more, depending on living area, if they make it into management, or a specific career.
I have some friends that have their own business. Everything from running websites, to law practice, to accounting, to selling furniture. Many of them do in fact have degrees from Ivy schools (the one in NYC specifically). I've observed them.
Every hour not worked when you own your own business comes out of your own pocket. When you're working for somebody else, you're not really working 40 hours. You are there 40 hours. When you screw up, you don't take all of the heat. One of my friends works 7 days a week, almost 10 hours a day six days.
Now ... if you can go into business with family. That is a good business model. Your partners are people you can trust and you don't have to take it all on your shoulders.
I think it's great that you've made a great living selling widgets for 20 years. But I don't think it's the best option for everybody.
A smart senior engineer at Honeywell gave me a lecture at age 25. He explained that age discrimination is alive and well in corporate America. As a young buck, I watched him and others 20+ year experienced employees drink their morning coffee in meetings. They sipped slowly as they tried to get enough energy to pretend that they had passion. I could see it in their eyes that they viewed their morning coffee as spurs. I knew they wanted a new set of problems but they felt trapped. As that senior engineer predicted, he got the ax the next round of layoffs. He was unable to control his destiny. Logic doesn't always work in corporate America; managers with budgets prevail. I didn't want to be that guy so I took his warnings to heart. So when I stumbled on a business that looked promising, I decided to give it a try.
I too worked 100 hours a week but I loved what I did. I literally was lectured by my wife to slow down but it never sank in because I was too money motivated and more importantly, I was having a blast. One day, my then 9 year son came to my desk while I was on the phone and wrote me a note asking if he can play with the neighbor friend. It was 8 PM and he was waiting for me to finish work but I didn't give him a minute. So he gave up trying. That event opened my eyes and I rearranged my priorities and stopped working when I made more than enough. I agreed to cut back to 40 hours which meant I would cut my income by $250K. All I gave up was some security (more of a buffer) and realistically a worse garage sale of "stuff". I made the right decision.
That said, successful people who work for someone else usually don't only put in 40-50 hours. They too rise to the top because they give it their all. In fact I worked 60 hours a week at Honeywell and 75 hours a week as a sales engineer (lots of windshield traveling). Successful people who work for someone take evening calls, they occasionally go into work on the weekends, miss dinner when emergencies happen, check emails on vacation etc. The difference is that they invest their resources to build someone else's business. I refused to do that again. Because every job where I did that, the company never found the need to share enough and I knew one day they would show me the door because I was too expensive as compared with the next generation that came along.
As I mentioned before, they are always trade-offs. So of course there are down sides to working for yourself. You pointed out a few and left out many more. But having the freedom to run things the way you want and harnessing all of the profits is worth it. As Momma_bear suggested, it is a different mindset. While I never have looked at the statistics of who is in the top 1% of income, I'll bet it is heavily skewed towards business owners. That's because companies generally don't like to share no matter HOW much money you make them. In fact, when I brought in $9.6M in sales (and they shared 1%), that was at 28 points of margin or nearly $2.7M in profit (they did have a lot of overhead). I think I was worth a lot more than $96K. To finish the story, they actually cut my pay to $90K. I believe that happened because I was making more than my boss and he didn't appreciate it. So they reduced my multiplier and said "go sell some more"! So I quit to start a new position where they too screwed me and that was yet a different story. I don't play those games any longer.
Last edited by MN-Born-n-Raised; 08-27-2013 at 05:31 AM..
There are a lot of reasons people don't start their own business. I know several people who desperately want to start something. The problem is they don't know what to start or they are risk adverse. They continue to search for the perfect business model or they think they need to start something new and innovative. No, you just need to do a little better job than the competition.
When people who want to start a business learn of the down sides, they start a new search and the circle continues. Hint: there will ALWAYS be downsides of every business. And like anything in life, there will be trade-offs when you work for someone or work for yourself. For me at least, it is a no-brainer. I simply buy at wholesale and sell expensive items for more money than I paid for it. I just help people pick a technical solution and sell it for more money than I pay for it. I also manufacture a product and sell it. I don't have a factory, employees, etc. But I can sell and I am technical and I know what the market wants.
So nothing says you have to write out a $8K in monthly rent to be in a retail facility. There are a lot of small businesses that work out of their home. So my rewards are high and my risks are extremely low. Now when the economy tanked my income plummeted. I subsidized what I did for 4 years (I rented out two of my vacation homes by the week and pulled in $$'s to fill the gap). Now that the economy is better, we no longer rent those out and I am back focused on selling my widgets.
So why on earth would I want to be a doctor making $125K a year when I can work part time over looking the lake for more money and working 20 hours a week? If I was a doctor, I would want to make >$500K. If I was a doctor I'd work my butt off for 20 years and coast the rest of the way so that I can enjoy life.
Smart motivated people really think it is difficult to make a lot of $$'s and start their own business. It isn't. Look around you and see how other people are making it. Copy an idea you like in another part of town and do it better. Heck, go to work for them and be a sponge. I have not used my engineering degree since 1995. I didn't put that constraint on myself.
jobaba. You are obviously a smart person. Don't be stuck in your paradigm.
Because that doctor isn't working 100 hours a week and seeing their family more? Any doctor could be making much more than 125k if they chose to also. Your posts are a tad confusing with working like crazy but them talking about your son making you cut back.
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The owners put all of their saving and heart and soul into it. That's the reality of opening your own business.
