5 Unfortunate Facts About Self-Employment

5 Unfortunate Facts About Self-Employment - picture of man laying on cough with laptop on his stomach and hand to his forehead

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As most people know, I left my stable, full-time job to pursue self-employment in April of 2013.

The fact that I was able to quit was a dream-come-true at the time.  I truly liked my old job at the mortuary, but working for someone else got old- and fast.  I had always dreamed of being the boss lady – creating my own schedule and succeeding or failing on my own terms.  And now, here I am, doing exactly that.

And on most days, it rocks.

Unfortunate Facts about Self-Employment

Still, self-employment isn’t perfect.  Even though I no longer have to deal with the public, a boss, or co-workers, I still experience plenty of heartache and cringe-worthy moments.  With that being said, here are five unfortunate facts about self-employment and how I cope:

No Paid Vacation

I started my old job with 15 days of PTO and slowly worked my way up until I had 20 paid days.  Once I had 20 days to burn each year, I could typically take three weeks of vacation and save the other days for sickness or errands.  Now that I’m self-employed, I get zero paid vacation days.  Yes, zero.  This often means that I end up working on vacation in some capacity, whether it’s just checking emails or keeping up with social media.

I recently had a few people question why I would complain about slow wifi while on vacation.  “You shouldn’t even be on the internet while on vacation,” they said.  “Maybe that’s your problem.” Unfortunately, staying connected is part of the deal when you’re self-employed.  When you work for yourself, ignoring emails for days often means missing out on opportunities, disappointing clients, and taking away from your bottom line.

No Benefits

My old job offered crappy health insurance and a 401K match, but that’s about it.  However, I know other people whose jobs offer excellent health care plans, pensions, and even life insurance to their employees.  One frustrating thing about self-employment is that you are generally not afforded any of that- unless you pay for it yourself.

I don’t mind paying for my own life insurance and I am rock solid on saving for my own retirement, but we are pretty screwed in the health insurance department for a few reasons.  We currently have a $393 per month plan with Anthem that we like, but it will soon go the way of the dinosaur due to changes brought on by the passage of the Patient Protection and Affordable Care Act, also known as Obamacare.  The cheapest plan available to us in 2014 was almost $800 per month and came with a $12,000 family deductible!  Even worse, premiums in my state are supposed to increase 9-20% for 2015, which means that they will only ask for more.

Because of this, we have decided to abandon the idea of health insurance altogether and join a health care sharing ministry for around $400 per month.  I’ll write more about that in a future post, but it is extremely frustrating to find out that, as a self-employed person, I am being asked to carry far more of my share of the burden when it comes to health care.  And because of this law, I will soon be without traditional health insurance for the first time in my adult life.

Constant Hustle

A lot of people ask where I get all of my writing and consulting jobs.  It’s as if they think there is some magic job board that posts only the best opportunities, with the highest pay and the best opportunity for growth.  Trust me, it doesn’t exist.

The truth is, being self-employed usually means that you have to hustle for everything you have.  And when you don’t see a job opportunity out there, you sometimes have to create one yourself- either by pitching your services or convincing someone that they need what you have to offer.  I personally don’t mind the hustle, but I also know that it is not for everyone.

High Tax Rate

Because of the way the U.S. tax system is set up, self-employed individuals often pay some of the highest tax rates in the United States.  Having plenty of deductions helps, but working as a web-based writer means that I have very few.  I could structure my business differently, but with each change comes new challenges.  There is just no way around it- I pay a lot of taxes, and writing that check hurts.

Most self-employed people I know have similar complaints, although those in different industries often have far more deductions than I do.  Regardless, it is nice to make enough money that your tax bill is frightening.  First world problems, right?  Still, you know the saying, “Mo Money, Mo Problems!”

People Assuming You Don’t Really Have a Job

I’m pretty sure that most people we know think I live a life of leisure.  However, that couldn’t be farther than the truth.  Even though I work at home and don’t necessarily get dressed every day, I still have a real job with real responsibilities.  In fact, I often work far more than 40 hours per week, including evenings and weekends.  And I have never once even turned the TV on during the day in my entire 18 months of self-employment history.

I hear similar complaints from other home-based workers.  If you don’t leave your house, people don’t think you are really working.  I recently had a neighbor suggest I start volunteering to fill my time since I am “obviously home all day.”  She meant well, but I knew she had no idea that I not only work full-time, but bring in a salary that is usually more than my husband’s!

I Still Love Self-Employment

All of these complaints aside, I wouldn’t trade my situation for any other.  No, self-employment isn’t perfect, but no job is.  Anyone who works has to deal with something they don’t like at least part of the time.  Otherwise, it wouldn’t be called “work,” am I right?

The best part about self-employment is that I have the opportunity to make more money than I did in the past.  If I continue to hustle and look for additional streams of revenue, my income should theoretically continue to grow.  Working at home isn’t perfect, but I do feel as if it has been the opportunity of a lifetime.  Now I just need to make it last until I reach financial independence.  Then, and only then, I can throw in the towel for good.

Are there any unfortunate facts about your job?  What do you think you would like/dislike about self-employment?

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  1. I think the only unfortunate thing about my current job is it’s less flexible than my last. However, every thing else (people, pay, potential for travel, etc) more than make up for it.

    Hustle/lack of stability would be the biggest turnoff for me. Happy to freelance but rather not rely on it. I can’t imagine what a burden it must be to also have to worry about health insurance on top of tha.

    1. My old job had super crappy insurance anyway, so I wasn’t really giving up anything! It was seriously terrible- expensive and terrible.

  2. I think that last point about People Assuming You Don’t Really Have a Job would get the oldest the most quickly. Listen to everything you’re doing; hustling for new projects, working during your vacations, and making a little extra to cover your taxes and insurance. Yet when people don’t see the mini-van leave for work at 7am, they assume you’re just some kind of bum. People really need to change their mindsets.

    1. I agree! I think it’s funny that anyone would assume I have time to volunteer! Maybe one day I will, but I certainly don’t these days.

  3. I don’t work for myself (yet) but I can see the nosiness being a problem – people wondering why I don’t volunteer to be soccer coach or class mom since I’m obviously at home all day!

    1. Yep, exactly! Someone even told me about an assistant job at my daughter’s school the other day. AS IF!

  4. The most unfortunate fact about my job is the lack of flexibility – physical presence matters much more than the quality or even quantity of work being performed. And the meetings are terrible – I have had meetings to prepare for meetings. Completely unnecessary.

    1. That is how my old job way- I felt like more of a warm body than an asset most of the time!

  5. I am self-employed and I experience all those things like having no benefits and no paid vacation. Despite those, I still enjoy it because I have control over my time and how much I earn. The more I work, the more money I get. More satisfied to be self-employed. Haha!

  6. Working for myself is really appealing… I totally get the down sides and I am thankful for all the benefits my job provides. But I’d love to be the master of my own time! Like you said though, nothing is perfect. But I could be in jammies all day!!

    1. Yep, that is definitely one of the perks! I rarely get dressed before 3:00 p.m.!

  7. Hustle and lack of benefits would kill self-employment for me. Also, having an office separate from my home is important to help force me to have mental down time from my job. That would be decimated by self-employment and I don’t think I could take that too well.

  8. I don’t work for myself, but I’m in the process of looking into other avenues for work. I’m even concerned about taking a step into a start-up because they generally don’t have group benefits. And I have cushy benefits right now. So I am not sure how I’d deal with that down-grade.

    1. Yeah, I can understand that. I didn’t have great benefits at my old job so that made my decision easy.

  9. Great post, Holly. I really connect with your point about constantly hustling. Even with a blog that isn’t my full time job, I never knew how much work it would be. I can say that I never feel like there isn’t something I could be doing. And I have to plan to take a day or two off (on the weekend of course). It’s just a lot more work than I ever expected, and I’m sure that’s exponentially increased when it’s your full time job.

  10. Overall, I think it’s worth it to be self-employed. I think the benefits outweigh the negatives…for the most part. It is tough to find good, affordable insurance. As far as vacations days, I think I would just work twice as hard for a week, to be able to take time off the following week, but that’s easier said than done!

    1. That’s basically what I do. I work like crazy when I’m home so I can (mostly) relax when I travel.

  11. I can relate to all of these Holly! I still get the “you must have plenty of free time” comments from family members. It can be maddening at times, but they just don’t understand. They must think that all I have to do is open my laptop and money starts flying out, lol. I think we may be following you on the health care sharing ministry option. It looks like it’ll save us about $200-300/month, but it looks like it’ll mean we’ll lose the tax deductibility – though haven’t heard for sure from our CPA yet. We have good friends who had the same exact insurance we currently do and they had 20%+ increases two years in a row and they left last year. That’s just crazy in my opinion.

    1. Let me know when you hear from your CPA about whether you can deduct it as a business expense. I would hate to lose that expense, but it obviously doesn’t make sense to pay $800-$900 per year for a plan with a 12K deductible instead!

      Which sharing ministry are you considering?

      1. I will. I’d hate to lose it as well, but it just doesn’t make sense to stay with something that’s proving to increase at ridiculous rates with a crazy deductible.

        I’ve looked quite a bit at Medi-share and our friends are with Samaritan, but I’ve not looked into them yet. I hear there’s one other main option. I’m hoping to decide after FinCon as it just makes me sick to my stomach paying as much as we are for nothing.

        1. In my opinion, they all have good options. I think we’re going to go with Liberty Health Share- http://www.libertyhealthshare.org. It will be $449 per month for the highest level of coverage and they aren’t strict about the religious component. We aren’t all that religious and I don’t want to lie.

          1. Thanks for sharing the link Holly. I think Dh and I will also switch to a health share plan. We’re paying $800+ a month for no good reason and I just cannot accept that.

          2. Thanks for sharing Holly! I’ll take a look at them as well. No “good” option is off the table for me right now, we just need to find the best fit.

  12. I’ve been at the self-employment gig for over two years and I still wouldn’t trade it. All that you listed is what I face and I get tired of explaining to people, including my Mom, that I just don’t get to enjoy a vacation quite the same way as a salaried person.
    Also the tax sticker shock was something. When you’re salaried, you don’t really feel the tax bite, but when you have to cut a payment to the Feds every quarter for thousands each time, it makes you want to cry lol.
    I don’t even want to talk about healthcare since both DH and I are self-employed and in NYC, the monthly premiums make me want to vomit!

    1. Yep! Same here. I don’t mind paying for insurance, but I think it’s sad that it is now set up so that I basically get nothing in return. And with a 12K deductible, I would just be shredding $800 plus dollars each month.

  13. Love this. Your list is exactly how I feel about self-employment as well.

    One thing that still bothers me is the fact that many people think I do nothing all day and that I’m actually extremely irresponsible. UGH! AHHHHHH!!

  14. The taxes and health care are the worst. I have three contract jobs and it takes the entire salary from one of those just to pay taxes. I try not to think about it, but essentially, I am working one entire day per week just for taxes. I also hate the question of “What are you doing with your time now that you don’t work much?” Just because I am not in the office 50 hours per week doesn’t mean I don’t work, but the answer to what I do makes people look at me like I grew two heads. I usually just say I’m spending more time with my daughter.

  15. I’m seriously worried about taxes. I have no idea what to expect, but I’m saving up. As for slow wifi on vacation, it’s the worst! I was pissed I couldn’t get wifi on the beach in mexico, just from the pool, haha.

  16. I still pay the same per month out of pocket on my employer-based health insurance. The difference being that my employer also kicks in an additional $800/month. So, total cost ~1200/mo to cover the family. And it’s not Cadillac insurance either– lots of cost-sharing.

    1. Do you have a $12,000 deductible? I don’t necessarily mind paying $800 per month- my problem is what I’m getting in return. With the 12K deductible, we would pay 100% up to 12K in any given year, the exception being “free” well visits. We also don’t have dental either, so we have to pay 100% out-of-pocket for that. It makes no financial sense to pay so much and get nothing in return.

  17. LOVED THIS: “I recently had a neighbor suggest I start volunteering to fill my time since I am “obviously home all day.” ”

    I think that constantly being on because you have to is the difficult part. And the health insurance. I work from home for my job and never make it out of my jammies until later in the day too!

  18. I can imagine that the constant hustle would wear out a number of people (it feels like it does for me some days) however, I have always been a hustler and I love that the more I hustle, the more results I see, and it’s true that the sky is the limit. When I was in corporate America my total compensation was always capped by the internal limits. Now it’s only capped by my energy.

  19. The only negatives I can think of my job, is the commute, and not having the freedom to do what I want with my time. This is why pursuing financial independence is the real way to go.

  20. I think the only one I haven’t come across is the self-employment stigma that people don’t think you have a job. I think this area is saturated with freelancers so it feels pretty common. The steady paycheck…not having that is so hard!

  21. I think I have considered the majority of these drawbacks which is why I am not currently prepared to try out self-employment. Maybe my mindset will change in the future, but like Taylor I need a separation from work and home. Otherwise I would probably just be working ALL the time. I guess I could do a make shift separation and goto a coffee shop or something, but I don’t want to be tuckered down on a computer all day there either :), plus I don’t want to spend the money, so there’s that too.

  22. Many people think it’s a dream to be their own boss, to fall out of bed, do a couple of hours work and then take the rest of the day off… in reality, you put a lot more hours in than anyone who works a 9-to-5, you take a lot more risk, and you have to be constantly motivated. The sense of achievment makes it all worth it though.

  23. People Assuming You Don’t Really Have a Job. I love the neighbors response, she will have you working 100 hours a week in no time!

  24. Lately, I’ve had a few different people make comments like “Why do you say you have no time? You only work 8-5 M-F…” I usually don’t respond angerly or even correct them because I don’t care, but after coming from several people in a 2-3 day period, it was getting to me. I don’t just work 8-5 and do nothing the rest of the time. I work PT on weekends, I have a direct-selling business, and I freelance online. But they don’t know that. It’s just frustrating that they assume I have all this time because I “only” work 8-5 M-F and have no kids…

  25. I dislike driving to work in the snow, it would be nice not to have to worry about that!

  26. I think the health insurance costs would be my biggest concern/complaint. Chris has always worked for Corporate America and has really good benefits. And from the numbers you’ve shared and from what I’ve seen with some clients, I won’t deny that I am grateful that Chris really likes his job. Those numbers are scary. I’m glad that self-employment continues to go so well for you and I’m not surprised that people are offering all sorts of suggestions for you to fill your time with. 🙂

  27. I would love to be self-employed, but I’m just not ready to let go of my fabulous job benefits. Pensions are hard to come by these days!

    1. Very true. Do you ever worry that your pension won’t be around by the time you retire? I know a lot of people who have lost their entire pension or part of it over the last decade. Obviously, I hope this does not happen to you!

  28. I have owned 2 businesses in the past and it is an effort to deal with the taxes and insurance. I wouldn’t have traded those experiences for anything and any PITA is totally worth the freedom and flexibility. I currently will do contract/consulting work where sometimes its paid as self employed 1099 situation and I have to treat income like you are. I just make sure I get paid more hourly than if I was doing it as an employee to make it worth it. The one I love is when people think I can write-off all my lunches and dinners out.

    1. Oh yes! Or the people who think “writing something off” makes it free. I’ve had so many people ask me why I even care about my health insurance costs since I can write it off. It’s as if they don’t realize that it comes directly out of my pay.

  29. I am a single income earner with two kids and the thought of working for myself seems far fetched for now. I am hoping to head to what you are doing in a few years to come. I had done some freelances but having to pay liability insurance on months I am not doing anything deters me.

  30. Prudence Debtfree says:

    My husband has a home-based business, and I although I can relate to what you say, I think he would like me to have more understanding. He gets frustrated trying to assert that invisible boundary that says, “I’m working now. Don’t act as if I’m home from work like you are.” I’m sure that with two small children, you must have your own challenging moments with that whole work vs. home boundary.

  31. Ben @ The Wealth Gospel says:

    The biggest thing that I really don’t want to deal with when I take the plunge is health insurance. I’ve read up enough about the state of things right now that it makes me sick just thinking about it. That being said, doing a little work here and there on vacation is something I’m totally fine with doing–especially if it gives me the flexibility to do a little work on a beach whenever I feel like it instead being confined to a cube.

  32. As somebody who is fighting poor Wifi on vacation right now while trying to get some work done I feel your pain! I think being location independent outweighs lack if paid time off any day though.

  33. So many forget about the tax ramifications. Since today was the day estimated taxes were due, I know what you mean about writing that check. There is a reason I don’t max out my Roth until I know my tax ramifications for the year. I also know there may be times when I need to acquire a new website to lower my tax bill. As you said, online media doesn’t have too many deductions.

  34. My current insurance (through my employer is pretty crappy, but it’s better than nothing). One of my biggest fears about being self-employed has always been health insurance. I’ll be interested to read more about the health sharing. At this point I feel like either Eric or I will always have to have a “normal” job so that one of us can keep both of us on the health insurance.

  35. I think there are unfortunate things about every job. I’ve written about the perks of being employed, and the downsides. I wrote about the same thing as far as self-employment is concerned. I hate my work space at work. The cubicle that I have is in a terrible location, it’s always loud, and you have zero privacy. When I work from home it’s like an oasis haha. And yes, I’m introverted.

    Oh and I agree with you about the tax rate. It’s depressing to see how little of my side hustle money I really get in my pocket. I’m paying a lot more than I need to on quarterly taxes to take some of the sting away.

  36. I have a full time job and am doing some freelancing on the side recently and I agree wholeheartedly it is definitely work! Probably more work than my full time job. I’ve never really been self employed, but I can understand the constant hustling that needs to be done if you’re fully self employed. Writing and producing great content consistently is one of the toughest things to do.

  37. The hubs and I were considering both trying to make the leap to self-employment for a while, but for several of the reasons you mentioned (namely, taxes and insurance) we decided that he will keep working at his job for the foreseeable future. Luckily he really likes his work, although we are trying to transfer to a different location. And the benefits are hard to beat.

  38. “People Assuming You Don’t Really Have a Job”, this is totally itches me! When somebody asked me about my career and when I answered them that I work online, I can obviously see their raised eyebrow!

  39. SO glad you are going with the health care sharing ministry – my good friend has been on it for years, and loves it. My fave listed here is the fact that people think that the self-employed don’t really “work”. Tell that to my sanity. 🙂

  40. The Phroogal Jason says:

    I bumped into an old friend I hadn’t seen in years. She follows me on FB and was like it’s so great how you don’t work. I just nodded my head cause I didn’t want to explain for the most part I work 20 hour days and don’t have the luxury to clock out at 5p.

  41. I hear you Holly.

    Health cost and self-employment tax are the biggest benefit lost for sure. People employed by big employers definitely take these for granted.

    I’m in the same boat, high premiums for weak coverage for health insurance. Obamacare has not been great for the young and healthy who don’t qualify for a subsidy.

  42. You know what, all these facts actually make more interested in pursuing self-employment! My aunt is also self-employed, and she’s had her fair share of busy and stressful moments — but I feel like I would like the challenges of self employment better than working for other people.


    Living off of blog money was cool but really I couldn’t wait to get back inside an office. Seriously. I couldn’t hack self-employment, it was way too stressful (and I really missed benefits…)

  44. I had to mail off my quarterly taxes today-Ugh, that was awful! I only do this part time but I have to say having to keep up with your own taxes is a nightmare for me. I just don’t like the paperwork.

  45. catherine says:

    I admire self employed people. Could I do it?, yes. Do I ever want to? nope. I have no desire to deal with paperwork, taxes etc. I’m glad to go to work, do my job (that I love) and collect my pay!

  46. Interesting write up! I always hear people talk about the benefits of being self employed but I suppose it’s good to look at the other side of the coin. People who are self employed tend to be very driven and able to work longer hours than anyone else. That can be great when work needs to be done but bad when you’re trying to relax on vacation. As you mentioned having wifi on vacation can be a big deal while self employed…..the money isn’t going to magically appear and needs to be earned when self employed. Not that all employees have paycheques that magically appear out of nowhere but self employed people tend to be willing to go to longer lengths to get what they want

  47. I’ve found I like self-employment as a side gig. It’s nice to have the income and get to do a bit of work I love but without all the stress of relying on that as my only income. It was too stressful for me. I like the combination where a typical day job gives me a steady paycheck that lowers my stress levels.

  48. I feel you! This is what’s happening in my life right now. I am a full time work from home man for a year and 2 months now. I definitely love this job because I am able to spend quality time with my family.

  49. Very good points. No benefits is not ideal but having yourself as a boss is always good. Making more money is good too. 🙂

  50. Holly, it is quite impressive what you’ve accomplished in this super competitive environment. Like you wrote once in your post, there are SO many writers, dime a dozen. It’s amazing you were able to stand out and make a job out of it. Of course, you are a good writer, so that helps. Good for you! I wouldn’t even know where to begin looking for all these opportunities. 🙂

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