Everybody fantasizes about being their own boss. Yet very few people take the leap of faith because they either don't have an idea, don't have the financial means, or don't have the confidence to execute. But I tell yah, early retirement is exactly like being an entrepreneur: so awesome!
It took me almost three years of moonlighting on Financial Samurai as a personal finance journal before realizing I might be able to make enough money to survive off this site.
And here's the thing. You don't have to go all-in with your business! It's not like in the past where you had to set up a brick and mortar shop, borrow money from the bank, buy lots of inventory and equipment, sign a one year rental lease agreement, and hire people in hopes of just making it. Now you can simply start your own business for under a hundred bucks a year on the side.
I left my multiple-six-figure day job in banking at the age of 34 due to three main reasons:
- Saved and invested aggressively for 13 years
- Negotiated a severance package that paid for 5-6 years of normal living expenses after 11 years at my job
- Started Financial Samurai when I was 31
My savings and investments gave me the confidence to dream of a different life. The severance was the catalyst to take the leap of faith and become an entrepreneur. Finally, running Financial Samurai was something I loved to do. Make sure you retire to something, not from something.
Early Retirement And Being Your Own Boss
Despite making much less than my day job my first two years of going solo, I was much happier. How is it possible to make 80% less, but feel at least 50% happier? The simple reason is because I controlled my destiny.
All I've ever wanted was a correlation with effort and reward. I'm sure many of you wish the same thing as well. Very few day jobs provide an absolute meritocracy.
Can you imagine working harder than your peers only to get a 3% raise? How demoralizing! No wonder it's so easy to lose your motivation after several years on the job. How about seeing loyal soldiers work for years only to get laid off? Not good.
But imagine a scenario where the sky is the limit. I'm sure many of you would work much harder and be much happier if you knew there was a stronger correlation between good work and reward. 100% of the spoils go to you, instead of only 3% to you and 97% to your company and its overpaid management team.
Being your own boss is like a short cut to early retirement. As someone who went through an identity crisis an an early retiree and then as a online entrepreneur for the first two years, I can say with absolute certainty the feelings of retiring early and being your own boss are EXACTLY THE SAME.
So for those of you who aren't able to retire before 65, or those who still have a ways to go before retiring early, starting your own business may give you a whiff of what a free life smells like.
And for those who retired early, but don't have the energy to be an entrepreneur, you're living a similar reality!
Killing Two Birds With One Stone With Entrepreneurship
I now believe starting a website while in retirement is the perfect combination for all retirees.
The biggest problem with retiring early isn't the lack of money, because you wouldn't be able to retire early in the first place if you didn't have money. The biggest problem with retiring early is BOREDOM. With so many more hours of free time a day, you will easily get bored if you don't have something meaningful to do.
For the first year and a half after leaving my day job, I constantly found myself bored by 10am. My writing was done by then and everybody I knew was at work.
There were many days when I'd just chill in Golden Gate Park twiddling my thumbs waiting for somebody to show up to play a pickup game of tennis. It didn't matter if they were terrible, I just needed something to do.
My wife was a night owl, which mean should would often sleep in until 9am or 10am. I woke up regularly by 5:30am while it was still dark. I was conditioned for 11 years to get into the office by 6:30am PST before the stock market opened.
Having a family would instantly cure my boredom, but a family takes time to create. The next best thing is having Financial Samurai, where I can instantly connect with readers every day.
Boredom is not the worst feeling in the world. But if you've been used to constant stimulation for years thanks to work, boredom can really change your attitude for the worse. It's important to keep your mind stimulated during retirement. Everybody needs a purpose, no matter how small.
You Don't Have To Register As An LLC Or S-Corp
Another stumbling block people have is feeling like they need to register as an LLC or S-Corp to start a legitimate business. This isn't true. You can simply be a sole proprietor without a business ID number, just your social security number.
All you do as a sole proprietor is earn income as a freelancer. You report the income on your Schedule C tax document, where you can deduct all your business expenses. You can contribute some of your profits to a retirement plan, like a Solo-401k. Then you pay taxes on your operating income, which is your profit before tax.
The main reasons for starting an LLC or S-Corp are liability protection purposes, dividing ownership, and having an asset to sell sometime down the line. You can't sell yourself. Well you could, but that would mean you'd be an employee again.
I didn't create my S-Corp until after I left my job because before then, I was just writing purely as a hobby. My severance negotiation book wasn't published yet and I wasn't selling anything.
If you plan to moonlight on the side, it actually might be best to not incorporate your company. Many companies have outside interest limitations because they want their employees to focus on their jobs. There're also business taxes you must pay.
But if your business starts gaining traction, you might as well incorporate and take it more seriously. Besides, there's no limitation to free speech if you were to start a blog.
Finally, if you remain a sole proprietor, make sure you have some type of protection in terms of an umbrella policy so that in the unfortunate case when someone wants to go after you, your assets are protected.
Comparing Work, Early Retirement, And Entrepreneurship
Now onto some more concrete numbers to prove my point that early retirement and entrepreneurship are eerily similar!
Based on my experience as a day job worker, early retiree, and entrepreneur, I've created this chart comparing the three in the most objective way possible.
I rate each of the five variables on a scale of 1 – 10, 10 being the best/easiest and total the scores. The numbers have been crossed checked by a number of other people who've experienced all three stages like me.
Go through each and give your own rating. Let me know where you strongly disagree. It's pretty amazing Early Retirement and Being Your Own Boss both scored the same.
Autonomy:
Autonomy can be defined as freedom. Thus, early retirement wins hands down. Entrepreneurship, however, isn't far behind. When you're your own boss, you still have obligations to clients. You don't have to look at your calendar in early retirement to see what's on deck. Work is pretty horrible for autonomy unless you are the boss in a satellite office.
Fulfillment / Purpose:
Being your own boss is the clear winner because you're actively doing what you love. Hopefully, people who are in their early retirement phase can also gravitate towards doing what they love due to having more spare time.
Volunteer work is extremely fulfilling. So is connecting with people online and sharing your experiences. Fulfillment is why those who are able to retiree early should start their own business. It's an incredible joy to do something you love when there's no pressure to make any money.
I can see my score of 5 for the Day Job category as being debatable. But even if you raised the score to a 8-10, the total score for Day Job still wouldn't match Entrepreneurship and Early Retirement's scores.
Money:
In the initial stages, it's much easier to make money from a day job than it is as an entrepreneur. A paycheck is steady, and hopefully you'll get raises and promotions.
It's harder to make money in early retirement because you're not motivated by money. Freedom and fulfillment are your priorities. However, when nobody is pushing you, it's easy to get lazy.
Initially, it's difficult to make money as an entrepreneur. You need to survive long enough to build a brand and create a loyal following. But once you get over the initial hump, the money is far, far greater than any day job. The richest people in the world are all entrepreneurs, not folks with day jobs.
Here's a detailed post about how much bloggers make for a living. I think you'll be surprised by the income potential compared to the median household income of ~$65,000 in America in 2020.
Below is a real example of how much one of my blogger friends makes with 300,000 pageviews a month. $151,200 a year from his website alone ain't too shabby!
Difficulty:
A day job is a walk in the park compared to being your own boss (9 = easy). Go to work, do some work, do as you're told, and leave it all behind once you go home.
As an entrepreneur, you're always on call. You've got to be the CEO, CFO, COO, and CMO of your business. But that's the fun part of it! When you're thinking and working 100% for yourself, it doesn't feel so much like work. It feels like fulfillment!
To make things less difficult, you can hire freelancers to help you with areas you don't like e.g. taxes.
Thankfully, it's never been easier to start your own website than it is today. Back in 2009, I paid a guy from Craigslist $300 to come over to my house to launch a website. It was called RichBy30RetireBy40. The site stunk, so I scrapped it and hired another guy for $1,000 to launch Financial Samurai. Then I had to pay another $500 for some graphics and customization work.
Today, anybody can start a website for less than $3/month in 30-60 minutes with Bluehost. It's so cheap and easy to start from the comfort of your own home.
Happiness:
The initial euphoria of getting a job wears off after a year or two. Sooner or later, a job becomes mundane due to: office politics, a poor correlation between reward and performance, repetitive work, envy for those who make much more, and exogenous variables outside of your control.
Early retirement life is filled with more happiness due to having 100% autonomy. You're spending time doing whatever makes you most happy because you can. As an entrepreneur, you're happy because you have a lot more autonomy to do what you want. If you start feeling your business is losing purpose, you can always pivot.
The best combination really is to moonlight while having a day job. Second best is to do something entrepreneurial once you are able to retire. And if you can have a spouse earning a steady income while you go after your idea, well, all the more power to you!
I will say that after 13+-years of running Financial Samurai, I'm very happy because I have a purpose. In 2022, I'm publishing my first traditionally published book called, Buy This, Not That: How To Spend Your Way To Wealth And Freedom, which I think will be a big hit. And if it's not, I'm thrilled to have created something of value to society and made my children proud.
Freedom Is Much Greater Than Money
I'm glad I spent 13 years in Corporate America. If I didn't, I wouldn't be able to truly appreciate how awesome it is to be my own boss. The difference is night and day. And that's coming from someone who enjoyed his job ~70% of the time and made a very handsome salary.
Progress is my one word definition of happiness. When you own your own business, there's an endless amount of progress to be made!
I really can't believe it's been over 11 years since I started Financial Samurai. This site has enabled my wife and I do be stay-at-home parents to our two young children. Every day there's something interesting to read from a user comment.
Finally, given we're in a global pandemic, it's a blessing to be able to operate an online business that cannot be shut down. Everybody should be figuring out a way to make money from home, even if you don't retire early.
Starting an online business, no matter how small, could be the best thing you ever do.
Interested in starting your own website?
Check out my step-by-step tutorial guide on how you can launch a site like mine in under 30 minutes for just $2.95/month. A website legitimizes your business and becomes your online portal.
Not a day goes by where I'm not thankful for starting Financial Samurai in 2009. In just 2.7 years, I was able to quit my job and be free. Everyone should leverage the internet to build a brand, build a business, and become untethered from an office to live a life of purpose!
Invest In Entrepreneurs As Well
Finally, taking a leap of faith to become an entrepreneur is hard. Instead, you may want to keep your day job and invest in private growth businesses. This way, you get to have brilliant entrepreneurs work for you. Or you can do both! I certainly am.
Companies are staying private for longer, as a result, more gains are accruing to private company investors. Finding the next Google or Apple before going public can be a life-changing investment.
Check out the Innovation Fund, which invests in the following five sectors:
- Artificial Intelligence & Machine Learning
- Modern Data Infrastructure
- Development Operations (DevOps)
- Financial Technology (FinTech)
- Real Estate & Property Technology (PropTech)
Roughly 35% of the Innovation Fund is invested in artificial intelligence, which I'm extremely bullish about. In 20 years, I don't want my kids wondering why I didn't invest in AI or work in AI!
The investment minimum is also only $10 while most venture capital funds have a $250,000+ minimum. You can see what the Innovation Fund is holding before deciding to invest and how much.
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Hi Sam – love the consistent thought-provoking content you provide. I’m going to comment from the perspective of someone who knows a lot of people (ex-tech) who are financially independent, and for whom it doesn’t work out so well.
I think there’s a lot of people now working towards financial independence/early retirement that write prolifically about it, and earn money on their writings. Not slamming you, Sam – I love your writing and your positivity. And I don’t think that NOT being financially independent is so great. But anyway – the best way to promote these writings is to consistently project a positive image of fi/re. So a lot of the more negative aspects are ignored.
Another reason why the downsides of fi/re are ignored is that you’ll consistently get one of 2 responses to people who comment on them (on forums, blog comments, etc):
1. “I’d like to have those first-world problems”/”I’m playing the world’s tiniest violin for you”
2. “If you’re bored in fi/re, you must be boring. I have a list of projects as long as my arm that I’d love to work on if I ever had the opportunity.”
One negative thing is that what people are not compelled to do, they frequently don’t do, even if over the long term it would be better for them. For instance, most people are better off getting out of the house every morning (work, school, gym, whatever) and interacting with people, rather than staying at home. But a LOT of people who aren’t forced to get out because of a job or school will actually tend towards staying home, and being hermits. Sure, there’s plenty of counter-examples, but from what I’ve seen of life, this is the tendency.
Related to the above – it’s tough finding the structure that’s not a job or school, and that gets you regularly out of the house, and seeing people every day. Most people would say – do some volunteering. That might work for some people. Don’t just assume that it will, though, without having spent significant time at some non-profits. In my experience, they’re not necessarily better than regular jobs. Lots less efficiency, lots of little fiefdoms. I do know two fi/re people who work one day a week at a hospital gift store, they enjoy it. I also know one lady who started out volunteering at a very well-run senior center, and is now a part-time bookkeeper there, and absolutely loves it. So, it can work. It’s just lots harder than you might think.
Also, once you’re financially independent and don’t *need* to work, every potential new job is evaluated against the impossible standard of complete freedom. This makes it much harder to accept the inevitable negatives that any job will have. It’s much easier to quit the job, or not even start, because it doesn’t give you time to do (insert here something you probably wouldn’t do anyway – working at the homeless shelter, become an artist, etc.)
People that are fi/re are kind of like trust fund babies. Trust fund babies also don’t need to work, and many proceed to mess up their lives. And the main thing that messes up their lives is that they are not compelled to do something – i.e. work. You can say – and I think it’s partially true – that trust fund babies and people who retired early after working hard in a career or business are completely different. I’d say – yes, they’re different, and the early-retirees that I know aren’t ruining their lives with drugs. It’s more that they have empty lives, without interacting with many people, without contributing to the world.
Sam, if you’re interested in article ideas, I’d love to hear more about people who no longer need to work, but still do. Or even if they don’t work, they manage to stay engaged, and productive, and specifically how they do that. How they find an in-person social network, etc.
Hi S,
You will enjoy these posts:
The Dark Side To Early Retirement
It’s Impossible To Stay Retired Once You’ve Retired Early
Life After Financial Independence
I’ve got so much content reflecting on my FIRE journey that’s real and real-time. I’m a little different in that I aggressively built my passive income portfolio and then negotiated a severance that is still paying out until 2017. A lot of folks write about FIRE and make a lot of their income writing about FIRE. That’s fine with me as that income often makes up the “gap” of existing income and needed retirement income.
But now that I’m almost 5 years into FIRE, I’ve somehow created a lot of online income writing about my journey. Very surprising, but just goes to show you never know if you stick with things long enough and build a brand online! So much fun writing and connecting. I think blogging is the perfect activity in retirement!
Sam
I am a big supporter of starting a side business while still working full time. Sure in a perfect world we could quit our jobs right away, start our business and see instant success. But the reality is that it often takes a few years for a business to become profitable… let alone enough to completely support you.
A website is a great idea. Another one is a Youtube or Instagram account. My brother has an Instagram page that just recently broke 1 million followers. He started the page about 3 years ago, and so far this year he has made over $70,000 from selling tee shirts (through a drop ship style company) and selling advertising on his page… All of this he does from his iPhone. All in all he probably spends about 2 hours per day working on his business. There is no reason someone could not do this while still working a full time job… at least until the business reaches your income goal.
Wow, 1M followers on Instagram? Amazing. What does your brother do?
You remind me I need to put a cool widget button on the site for people to buy a newly redesigned Financial Samurai shirt. It is so cool, you’ll have to see it!
You hear over and over again that it’s retirement is really what kills the elderly generation. I definitely think that as a society we need to revamp what really is considered “retirement.” I’ve never seen the point in working your ass off for 40-ish years to finally earn some free time when your body and your mind starts to go. I’d rather fewer hours a week and more years so I can spend some of the best years of my life running around Europe (personal dream).
In other words, if/when I grow up, I’d love to have what you’ve got going on here: multiple income streams that allow for early retirement. Frees up time for sailing (not as good for the heart as tennis, but fun all the same). Great post!
Wonderful goals! When you have a goal, you build a path to get there.
I sail about 2X a year on the SF Bay. Lovely.
If I spend $50,000 on bills etc. for the year, how much would I need to retire on by 40 years old?
25x your yearly living expenses is the general rule. at that point the amount of money you earn in interest every year is greater than you’d be taking out for living expenses. so in your case, 1,250,000 (approximately)
Hi Sam,
This post and your entire site is freaking gold. You probably hear it all the time but THANK YOU! Not only are you telling people to build a blog, how to do it but YOUR BLOG is a supreme example of good writing.
I am an English teacher and while the writing is sound in that regard it is more importantly relatable and full of what we lack a lot of today…common sense.
THANK YOU!
Howdy Mark,
Thanks for reaching out. Not bad for a guy who learned English second after Mandarin huh? I can thank my father, my editor, for helping make the articles not read like gobbly gook.
Best,
Sam
How in the hell could a man enjoy being awakened at 6:30 a.m. by an alarm clock, leap out of bed, dress, force-feed, shit, piss, brush teeth and hair, and fight traffic to get to a place where essentially you made lots of money for somebody else and were asked to be grateful for the opportunity to do so?”
― Charles Bukowski,
I hope I will be sometime in the same situation as you.
kind regards
valuetradeblog
Self employed for 7 years. Never took it really serious until the last three years. Have been building my business slowly and steadily. Working on establishing a great reputation and “brand.” The business provides a living but money is still – at times – very, very tight. However I do see a breakthrough in the near future. All the pieces are in place. A year ago I started another company for buying and selling land. It segues great with my branded business and has the greatest potential to be a major wealth building mechanism. I didn’t get serious until I was in my late 30’s. Wish it had been earlier. However, to anyone who is middle aged – its not too late. You just have to be disciplined and have vision.
YES! Build your brand. I will be working on a post on brand building this weekend. So, so important.
Nothing is too late. Technological as made doing things so much faster than before.
When I first started my blog I too found it to be such an incredible learning experience because you learn so many new things about business, taxes, your ability to manage time and self-motivate all while knowing the potential really is unlimited. My blog did well for awhile but became too dependent on facebook once facebook went public it really hurt my traffic and its just now starting to come back some.
Good post, Sam. One other big related benefit of being your own boss…. PEOPLE! Specifically, being able to be more selective about the people you work with. Don’t like a certain customer / client / vendor? Poof! You can choose not to do business with them. Don’t like working with that certain attorney in the Legal department because he’s annoying and just tries to make himself look smart? Well, as your own boss, that guy would have never been hired in the first place. :)
The freedom of being able to surround myself with people I like is one of the biggest benefits I’ve noticed of being an entrepreneur / being my own boss. It all became quite apparent after starting my own company, then selling said company and operating it as a subsidiary of a larger company (losing freedom in the process).
Now I am an exec at a startup (not founded by me). I have fairly good autonomy in my day to day activity, I feel reasonably fulfilled, and I have reasonable financial upside potential… but I still don’t have as much autonomy as I’d like when it comes to people. Yes, I can pick and choose the people I personally hire, but there are still plenty of customers and other colleagues I can’t.
I’m looking forward to my next thing, where I’ll be starting my own thing again, and where I can surround myself with people who I honestly enjoy spending time with. That will make me happy. (although I’m sure I’ll still run into the occasional customer that I don’t like… that’s part of business!)
When I was 38 I made a choice to quit my strategy consulting job, however I was not going to retire – I like to do things, I just did not want to have a boss any more.
I was trying to figure out what business to start, but could not come up with an idea that I thought would be both interesting and would make good money.
I ended up buying an existing business, where the owner was retiring.
In retrospect, this was the best decision I could ever make.
1) I make more money then I ever did, and it’s tax-efficient
2) I have more control
3) I have more freedom
There is only one downside – taxes and regulations that I have to deal with.. but i guess it’s a price to pay.
I’ve thought of doing the same. How did you find the business?
It took me a while ..
I started out with Bizbuysell.com.. that site has a bunch of trash, but also a bunch of real/good listings. I also asked a few local accountants.. Ended up looking at around 30-40 businesses, evaluated 4 businesses seriously, wrote 2 LOEs, 1 was accepted.
Overall the whole process from figuring out I wanted to buy, to closing took about a year.
I have looked on bizbuysell for about 2 years and haven’t been able to find anything interesting. Although, I don’t exactly know what I’m looking for. I’m also particular as I want something close to home. I also put an ad in a local paper and got no response.
That’s great to hear Mike! Can you reveal what exactly the business is? Or at least whether it is an online or offline business? I love hearing different business ideas and stories.
I want to retire early BECAUSE of a small business. Does that count for anything? I’m in talks right now to join a bakery business a friend started because she has no idea how the “business” stuff works. You want to talk about a start-up? 5k in revenue and no investment capital.
Having the time and money to do what I want, when I want, just sounds so alluring. I already volunteer with juveniles in the court system and I would love to help fund that with more than just time. The freedom to be *ME* and not some corporate politic sounds amazing.
Wait… you want to retire early b/c a small business is driving you nuts? Or because you want to join the bakery business?
The bakery business is HARD! Make sure every product tastes great, has a unique name, and a great social media strategy!
Same,
Great analogy…
How will Social Security be effected if so many people retire in their 30 and 40’s?
Not by much, b/c SS benefits will be less for those who pay less SS taxes. And if people can retire early, then that means they don’t need SS to live their lifestyle.
Hi Sam, your title practically jumped out of the screen at me :)
You see I lived the life of an entrepreneur, running my own business for 18 years, and it felt nothing like early retirement :) I agree that it is great to build something based on your passion and that nothing beats working for yourself because you are not funding someone else and you get to keep the results of your hard work. So I understand where you are coming from, but I think that the parallels between being an entrepreneur and being an early retiree depend very much on the type of business you are building (and at what stage in the entrepreneurial life cycle you are). In my case the business totally took over my life for many years and there was a point when I felt totally drained.
I sold my business just over 6 weeks ago and I recently started a blog to chronicle my experience post-sale. Two of the posts deal with the harder side of being an entrepreneur – the loneliness that you feel at times (www.smellingfreedom.com/2016/04/the-lonely-life-of-an-entrepreneur/) and entrepreneurial burnout(www.smellingfreedom.com/2016/04/entrepreneurial-burnout/)
I absolutely do not want to imply that setting up a business is not a great thing. I have been there and done that and for a long, long time, I loved it. However there does come a point when it does not remain fun any more, and that is when it becomes time to move on.
So seen from my perspective being an early retiree beats being an entrepreneur hands down ;) Well done for finding a way to combine the best of both worlds!
Good point! Being an entrepreneur is HARD, and amazing you did it for 18 years!
Check it out: https://www.financialsamurai.com/a-day-job-is-so-much-easier-than-entrepreneurship/
Most folks get a job, work for a while, and then become an entrepreneur relative to people jumping straight into entrepreneurship. I’m just hear to provide the prospective that early retirement is pretty amazing, and as amazing as being your own boss.
Of course, if your business is sucking wind, then being your own boss may be super stressful. But the freedom to choose is all one has ever wanted!
Well, a few years back I would have felt this is a mystical article which would never realise. Reading all the experiences from different freedom fighters has given me the confidence to take the plunge.
I happened to meet a friend last week who started off as an entrepreneur after college, but had to shift to a corporate job later. After 15 years of corporate work, he dumped his job last year to relaunch his venture again. This time his corporate experience helped him make a successful restart and is doing good. Moreover as you have mentioned he loves being his own boss doing what he likes.
hi Samurai — I am semi-retired. I left a similar finance job to yours in NYC and moved with my wife to a lower cost location (Colorado). We now have a 5 month old. I took a significantly lower paying job primarily for health insurance and 401k with matching but the income is only a modest part of our retirement income. My wife has her own business which she works part time and makes a good income. One thing i’m grappling with is health insurance. It’d be great if you could write a post about what early retirees are doing for health insurance (families and individuals). thanks
Hi Sam,
the frustrating part of my tech job is trying to navigate others’ agendas. Seems like 25% of my work is working 24-7 to finish my designs, and 75% is a combination of meetings and emails protecting, positioning and selling in order to make my team’s deliverables happen smoothly. Also, it’s super cut-throat to get awarded more from the fixed pool of stock options. Maybe other techies think its swimmingly wunderbar…. I don’t.
I’ve been working in the Valley for about 16 years now, different roles and some startups, and find that the tone is always there. I love “what I do” and met some great colleagues, but I do not love the intensely selfish competitive atmosphere – its not positive or healthy imo. And, maybe silly, but lately the commute here has become Re-Diculous!
Oh man, I hear you about the ridic commute and the 75% of time doing meetings and busy work for meetings sake! Painful. Once you are your own boss, you become much more efficient.
With your experience at startups, what did you think versus non startup tech? Any big hits? How did the financials payout? I’ve read lots of angst about employees getting screwed out of their options for whatever reason.
I did my own startup (spectacular bust) and was first-in to one (ipo’d flat). Funny thing the money I have made in tech has been mainly:
1. Owning a simple san jose house and trading up (nearly paid off)
2. Managing and saving in my 401k and IRA – getting there slo but sure.
I got some options lift from big tech corporate gigs but i used it to pay for kids university.
Interest two points! I just wrote this post on inflation interest rate paradox and why one must continuously invest. A reader is asking why I think the median net worth of a homeowner is 40X greater than the median net worth of a renter. Your two points are reasons.
https://www.financialsamurai.com/the-inflation-interest-rate-paradox/
I love posts like this. They encourage me to keep hustling, keep moving even when things don’t work out. I don’t think I have anything to offer the blogging world but I do know I have a very old dream which I’m ashamed to tell you at my age, I haven’t really tried to make happen.
I’ve always wanted to be a novelist and thanks to the motivation on this site, I’ve dusted off one of my old manuscripts and I’m reworking/editing it for self-publishing this year. The fear of “not good enough” is gone. I’m going to be published come hell or high water.
That is a wonderful dream. Let’s turn it into a reality! I didn’t ask permission to publish my book on severance negotiations. I just went out and self-published. The internet and all the tools around the internet serve as a GREAT EQUALIZER to allow anybody with enough desire to get things done.
Hi Sam,
I really like this article a lot. Thanks! In 2 years I plan that my finances will allow me to do my own thing. I can hardly wait.
But, I have been thinking, one thing about my frustrating high tech job is that I do get some pretty cool design work to do – sometimes – using expensive tools. The company provides s/w and h/w + tools and a team which (in my case) are necessary to build a network or cloud driven product.
Do you think it would make sense to add “Funding Creative Design Effort” into your table? I mean, that would maybe swing the score towards employment for many.
Howdy,
I don’t think that category would be broad enough. But it should fall under the DIFFICULTY category as I do say it is harder to be an entrepreneur than a day jobber.
That said, I absolutely think you should moonlight before or after work, and on the weekends while you have a stable job. It makes the side-hustle that much more enjoyable!
Tell me why your tech job is frustrating?
Sam
Isn’t another reason to register as an LLC or S-corp to protect yourself if someone sues you? As a sole proprietor, if you get sued by someone (say for libel) I believe you (and your assets) are personally liable.
Yes sir. Check out what I wrote under the LLC / S-Corp section:
The main reasons for starting an LLC or S-Corp are liability protection purposes, dividing ownership, and having an asset to sell sometime down the line. You can’t sell yourself. Well you could, but that would mean you’d be an employee again. I didn’t create my S-Corp until after I left my job because before then, I was just writing purely as a hobby. My book wasn’t published yet and I wasn’t selling anything.
If you plan to moonlight on the side, it actually might be best to not incorporate your company. Many companies have outside interest limitations because they want their employees to focus on their jobs. There’re also business taxes you must pay. But if your business starts gaining traction, you might as well incorporate and take it more seriously. Besides, there’s no limitation to free speech if you were to start a blog.
Finally, if you remain a sole proprietor, make sure you have some type of protection in terms of an umbrella policy so that in the unfortunate case when someone wants to go after you, your assets are protected.
I like this post. “The opposite of happiness is boredom.” I run my own business and love it most of the time, but I have a business partner who is not on the same page. It takes away from the love of being an entrepreneur. For that reason, I may sell the business in the next year and run a medical marijuana dispensary startup. I would have stock in the company but it would feel like more of a job than the business I own currently. I think I would enjoy this transition but the truth is… You never know. The other option would be to sit on the couch and collect rent checks. I would much rather have perceived progress.
Sam, what an inspiring post. I have been working in Corporate America/Silicon Valley for the past 9 years and while it has been exciting, my interest is starting to taper off, mostly because the rewards (salary/benefits) do not equal the amount of work I’ve been putting in. I like to think I’m good at what I do and my organization did give me a 5% annual raise but the work just doesn’t provide me with a sense of fulfillment. I have been contemplating over the past year now about starting an online business but seem to be experiencing a mental road block. I have ideas and products scouted out but just need to start establishing an online presence. Thanks for being a continuous inspiration – I’m trying to make 2016 THE year I start diversifying my income and hopefully a few years from now, I can retreat from Corporate America and spend more time on a cheap tropical island somewhere in the world.
I was becoming bored at work and then found FI blogs. Now I am obsessed and engaged with FIRE planning! Pretty soon I won’t have time for my full-time job (and hopefully I won’t need it).
FI blogs can get addicting can’t they? And the thing is, it helps motivate people to get their finances together and save and invest more.
Hey Sam, nice motivating topic.
I am aiming to achieve what you have done; become your own boss, work from home, be happy!
One day I will be able to come back here and say “I did it” thanks to you and every other FIRE website out there as encouragement.
Tristan
Family will definitely keep you from being bored, but worse, in my case, severely constrain my writing time. Looking forward to my sons being a few more months along and being able to reclaim my 5am 90 minutes as my time rather than feeding / sleep recovery time.
I fondly recall the 3 month hiatus I took between my first job out of college and my first Valley job. While I’ve not been bored in decades, having the freedom to be bored if you so choose is a vastly underrated luxury.
For most people in corporate America and majority of your readers, your article makes sense. However, there are certain percentage of super ambitious people who crave power and influence. No amount of money would be enough for them. I would guess they crave power more than anything. For those types of people, I would probably argue that majority would be better off to stay in corporate america or politics and climb the ladder rather than try their hand at entrepreneurship. As you say, being an entrepreneur is hard, but building a lasting multibillion dollar business from scratch is much more difficult. If you’re good and you know how to build relationships with other people in power, it’s an easier path to reach the upper echelons of society.
What’s more powerful than being the CEO of your own company? Entrepreneurship wins again!
As I said, most people including myself would agree with you and value independence and freedom the most. However, people live in a society with other people, and certain segment of a given population will always crave power and influence that matters within that entire society rather than just within a small group of people in their own circle. Just look at the two front runners in our election, people who aspire to be A list world wide celebrities, media tycoons, etc. Some people don’t like to live a stealth wealth life, but rather to be king of in a society.
For the overachievers, it’s about your impact level on the world. If your dream is to be a rocket scientist and send humans to Mars, you kind of have to join a big aerospace company, take on more and more responsibility, unless you are Elon Musk. If you want to be a high impact Oncologist, you have to be part of a reputable organization, hospital to have patients, lab support, graduate students to help you deploy your brilliant ideas.
There are some people in the “rat race” because they want to make large impact o the society. I do envy them a bit. When I was young I had big dreams of changing the world. Now I realize I do not have the assertiveness, persuasiveness, charisma to reach the top of such large organizations. And unless you are at the top, it is better off to be independent.
So Sam, I don’t agree that being your own boss is more powerful. It is a better alternative for most people. But for those who have all their ducks in a row, they can achieve more by leading a large organization.