Ever since Greg quit his job in March, we’ve been getting a lot of strange questions and looks. It seems that people thought it was perfectly normal for me to “not really have a job,” but it’s super weird for Greg to fall into that camp too. Now that we both work at home, people are racking their brains trying to figure out how we survive. A few questions I’ve gotten recently:
“How are you ever going to retire?” (This one was courtesy of a neighbor I’ve only met once.)
“Do you guys go without health insurance?” (I’ve been asked this one by almost everyone at some point.)
“What are you going to do if you lose all of your jobs?” (Huh?)
The rest of the conversations around our work situation are statements, not necessarily questions. I constantly hear things like, “Ugh, I couldn’t survive without my two weeks of paid vacation,” or “I would never give up my company 401(k) match.” And here’s my favorite, “I can’t live without a regular paycheck!” For reals?
How We Make Entrepreneurship Work
First of all, I used to feel exactly like every other person who doubts the benefits of entrepreneurship. But now that I’ve seen the light, I can’t imagine going back. For starters, the idea of having ten days of PTO literally makes me want to die. Been there, don’t want to go back. And my 401(k) match? It was great while it lasted, but I don’t miss it at all.
And that regular paycheck? Do people even know what that means? While I used to appreciate my regular, steady paycheck, I now realize that it only held me back. When I worked for someone else, they decided how much I could earn. Only now am I beginning to realize how much I was really giving up.
So yes, I totally believe that entrepreneurship is better than the 9-5. Here’s why:
Unlimited Income Potential
Three years ago, I was the Director of Family Services at a mortuary. I earned less than $40,000 per year and had almost no benefits aside from a 401(k) match. Fast forward to today – I earned $16,000 last month. This month, I am on track to earn more like $17,000. No matter how well I performed at my old job (or any other employer, for that matter), there is simply no way I could achieve the income I enjoy now in such a short length of time.
I’m not the only one. In fact, a lot of people are finding that online entrepreneurship is the only way they can pull in the big bucks. My friend Michelle from Making Sense of Cents, for example, earns more than $15,000 per month all the time. Another freelancer I know, Cat from Budget Blonde, is absolutely killing it while also staying home with her one-year-old twins.
The opportunity is out there for anyone with the balls to put their worries aside and strive for success. A 9-5 job can only take you so far in terms of income. If a higher income is something you really want, it’s up to you to find a way.
Bad-ass Retirement Options
It really annoys me when people assume that self-employed individuals aren’t saving for retirement. If anything, many of us are absolutely destroying it when it comes to our retirement savings! That’s partly because we have to, but also because we have so many excellent options.
With my tax-deferred retirement plan of choice, a SEP IRA, I can stash away up to 25 percent of my income up to $53,000 per year. Compare that to the average 401(k) or 403(b), which you can only use to invest $18,000 per year as of 2015. As a self-employed person, you can also use a traditional or Roth IRA. So can everyone else, but do they? Hardly.
The bottom line: There are plenty of retirement savings vehicles aimed at making retirement affordable for entrepreneurs and self-employed individuals. And that 401K match that everyone covets is nothing compared to the power of being able to save such a large percentage of your income in a tax-advantaged account.
After five years at my old job, I was up to 20 days of paid-time-off, or PTO. That wasn’t bad at all, but I still had to be stingy with it. Not only do we have out-of state family that we like to see a few times a year, but our PTO days also have to serve as sick days – and our kid’s sick days. So out of four weeks paid vacation, we usually got to take two, week-long trips and a few weekend trips to see family. The rest were sick days and personal days.
That’s one thing I really like about self-employment and entrepreneurship. I don’t have to take a day off when someone is sick or if I want to enjoy a long weekend. I worked with a sick kid on the floor several days this winter, and it worked out fine. And when we take a nice vacation, I can usually “work ahead” and just answer emails while we’re gone.
Still, the best part isn’t having unlimited vacation – it’s the fact that you don’t have to ask. Working a 9-5 often means planning your vacations and entire lives around other people’s schedules, and it’s a huge relief when you are finally able to live your life on your own terms.
More Job Security, Not Less
I think it’s really weird when people assume that self-employment isn’t stable. Think about it. Having a 9-5 job usually means having one steady stream of income you can count on, while self-employment and entrepreneurship usually means having 5 or 6 income streams – and often more.
In our field, our income is earned from a handful of clients and part-time jobs. It’s pretty common for me to shuffle through a few new clients each year, but it would be very difficult for me to lose all of my clients at once!
That’s why I think self-employment is one of the most stable ways to earn a living. Sure, your income might fluctuate, but you can enjoy plenty of job security if you have a handful of diverse income streams. On the other hand, a 9-5 job is easy to lose at any time. What will you do then?
I’m not going to lie: health care in the post-Obamacare era is hit or miss. Our healthcare options in Indiana are crazy expensive, which is why we opted to join a healthcare sharing ministry instead. However, I’ve heard people from other states say that their options are great.
Either way, if you earn less than $95,000 per year for a family of four, you could qualify for subsidies that could make health insurance affordable. Mo’ Money, Mo Problems, though. If you make more than that, prepare to bend over and grab your ankles.
The good news is, if you really need health insurance or health care, you can now get it. Thanks to the passage of the Patient Protection and Affordable Care Act, you can no longer be denied for pre-existing conditions.
Is Self-Employment Better than the 9-5 Grind?
Is entrepreneurship better than the 9-5? Now that I’ve lived through a few years of the ups and downs, I certainly think so. For me, the benefits outweigh the drawbacks – and it’s not even close. I like being able to earn as much as possible, take random Mondays off when I feel like it, and eat lunch with my daughter at school whenever I want.
I suppose it really boils down to one idea – freedom. When I worked for someone else, I had little of it. But now that I work for myself, I can live my life exactly how I want.
That comes with a lot of responsibility, of course, but I wouldn’t have it any other way. Because once you’re free, there’s no going back.
Which do you prefer? Entrepreneurship or the stability of a 9-5 job? What benefits do you appreciate from each work arrangement?