Career, Personal Finance 

Jobs: Trading Risk & Freedom for Money & Stability

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If you work for someone else or for a company, you have invariably decided to trade away the risk of trying to scratch together a buck and the freedom to do whatever you want in return for a little less money than you’re worth (so someone else can profit) and stability. While you’ve probably never framed it in those terms before, that’s exactly what you’ve done.

When you take on a job, you agree that you’re going to work for someone, do what they tell you, and they compensate for you. If you strike it out on your own, you take on the full risk of performing poorly any particular day. If you don’t earn the rent check that month, there’s no one watching your back. When you work for someone, they accept that risk. Whether you generate revenue or not in a particular month, you still get paid for your salary. So while you do take on some risk, too many bad months and you’ll be out of a job, the risk is mitigated by the fact that you still get paid after a bad month, even if it’s your last. On the flip side, if you have an exceptional month, you still get the same salary. While that doesn’t “sound” risky, it truly is (and that’s why salespeople are on commission). If you secure a contract worth $10M, you will probably still see the same salary (maybe a nice bonus, but not a cut of the $10M )… that’s risky.

Another part of what you give up when you take a job is the freedom to do what you want. Some jobs give you more freedom than others through the use of comp time and such (where you just have to work your 40 hours a week) but in general, 40 of the possible 168 hours each week is earmarked for the man. That’s almost 25% of your week spent on working on someone else’s project.

Now, start framing this in your mind, you are a business. Consider your skills and see whether you’re better off working for the man and pulling in that stable steady paycheck or if you have some entrepreneurial blood in you, read to take on a little bit of risk for some freedom and potentially a whole piece of the pie. However, like everything else in this world, it’s not black and white, perhaps you have that thirst for some risk but you don’t have the skills… a relevant job may just teach you those skills and give you those contacts that will help you strike it out on your own.

There wasn’t much of a point to this article other than to put down some thoughts I’ve had lately onto “paper” and to see what you all thought of it. (No I’m not going to quit my job, I actually enjoy it) As always, I think that if you try to look at things from a different perspective it will give you insight into your daily life…

{ 12 comments, please add your thoughts now! }

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12 Responses to “Jobs: Trading Risk & Freedom for Money & Stability”

  1. david says:

    Great post Jim. I was preparing one about chasing your dream job instead of chasing money, and this fits right into that category. Freedom means more to me than working just for money; that’s why I took a chance, left my job, and started out on my own. So far, I could not be happier about the decision!

  2. plonkee says:

    As a confirmed wage slave, one of the main advantages to working for someone else is that I get to do what I enjoy. If I worked for myself, I wouldn’t be able to get the opportunities to work on interesting projects that I get in my current job (and in other similar companies).

    Its just not possible to do what I love by working for myself, so I’m trading the possibility of more money for enjoyment and security. Thats not a difficult decision to make.

    Of course, at some point in the future, I may want to do something else and so the balance might shift in the favour of working for myself.

  3. plonkee says:

    I tried to post a comment a second ago but it doesn’t seem to have worked. I’m going to look a bit dumb if its just delayed for a while.

    I think there can be things other than security on the side of being an employee. For example, I wouldn’t be able to do the job that I currently enjoy if I was working for myself. So the tradeoff between the possibility of more money on one side against the security and enjoyment on the other is not a difficult decision to make for me.

    But I think you’re right, its worth revisiting this decision regularly.

    • jim says:

      Sometimes the comments go into moderation, but if you consistently don’t see your comments appearing (after a day), then shoot me an email. This is for everyone else since Plonkee already emailed me and we sorted it out.

  4. Rick says:

    First, there are actually 168 hours in a week 🙂

    Second, I agree with you, although in this day and age, even having a job does not really guarantee you any stability. How many people are downsized/laid off, simply because the business as a whole had to cut expenses? They performed excellently in their job, and yet they still were laid off.

    But I agree that working for yourself, although considerably more risky, can provide greater returns. It’s the difference between your market wage and what you contribute to the company’s bottom line.

    • jim says:

      My math is bad and you lose 4 for commuting, let’s call it a wash. 🙂

      I would say that having a job is more stable than being an entrepreneur, on average, but yes there is no guarantee… which sucks.

  5. imelda says:

    What a great post. I’m glad you took the time to write this down. I do work for the Man, almost 9 years now, but am tired of it. I would love to go out on my own but just don’t have that “entrepreneurial blood” you speak of. Many of my coworkers and I talk daily about leaving and starting our own 6 person group but have no idea logistically how to do it. I would like to the great team of people but still have someone tell me what to do work wise but still work on great fun projects our great team chooses instead of the big Man telling us what to do.

    Thanks for your inspiration!

  6. Chris says:

    I worked for the Man until I was out of college and immediately struck out on my own. First it was a printing company and now it’s a bookstore. That was 6 years ago and I’ve always enjoyed the freedom to do as I please. The money definitely isn’t stable, but those really BIG $$ months sure are nice. =)

    My father always told me that the only way to make it in life was to work for someone else otherwise you’d be scraping by every day. He lived by it, and swore by it. Four years ago he was laid off for no reason and hasn’t been able to find a job since and has had to burn through his whole retirement just to make ends meet. That’s some real nice security!! Makes me yearn for that 9 to 5 job….NOT! hehe

  7. Phil says:


    I think you’re absolutely right-on. There’s always a risk/reward scenario — opportunity cost? — with going solo (i.e.: contractor, entrepreneur, etc.) versus going salaried.

    Most people — even those with the “entrepreneurial spirit,” of which I’m all for (it helps keep America going!) — aren’t willing to put in the “blood, sweat and tears” that it takes to successfully keep a business going after it has gotten started. My understanding is that the Small Business Administration has had stats for years saying that 9 out of 10 (don’t quote me, but I know the bias is against people) new start-ups fail, most within the first 5 – 7 years of getting off the ground.

    Why is it so difficult? I think it has everything to do with bad planning. I’m not talking about a non-existent business plan (all that this document is, anyway, is a “study” on what you expect out of your business; whether it’s fundamentally based on sound research is a different matter altogether), I’m talking about answering the question, “Are you really prepared to stick it out for, say, 5 years — or more — if you don’t turn a profit right away?”

    Most people — once they realize that they’re not going to be millionaires after a year or two — aren’t willing to follow through. That’s the issue. Working for yourself means you are your own boss. You have to answer for everything. If you can’t manage yourself where you are, how are you going to manage yourself when it’s all on you whether your venture survives or not?

    Bottom line: Stick with your day job and begin “moonlighting” — be a part-timer — in a side hobby or other interest that really gets you going until you’re able to produce enough resources that you can make a full go of it.

  8. Cents You Asked says:

    I think you also highlight one of the reasons to own some (but not too much) stock in your company. Those profit’s you are generating are going to the stockholders. If you’re not one of them then you feel cheated very quickly. I think this is almost more mental than anything else, but it does seem to have its place in the modern day business world.

  9. Brad says:

    I generally agree with your posting. I realize it’s not intended to cover all the finer points. However, I think it largely ignores the types and amounts of risk associated with starting your own business. It also doesn’t point out that many employees may eventually reach a top position where they get profit-sharing and other means of reaping a portion of the benefits of their effect on the bottom line.

    A friend and I went into business for ourselves (and incorporated) about 12 years ago. Now, I think I’m in a better financial position than I think I would have been had I stayed with my previous job. But it took a number of years to match, and several more to make up for the lower income during the early years. I still could probably match my current base wage (I wouldn’t be surprised if I could beat it in hte right situation) if I went to work for another company. Most of my improved financial status is relatively illiquid assets (the company stocks, etc.) that improve my net worth more than my cash flow.

    We had to work harder for less pay to get things going well. I often hear the statement that security is no better these days as an employee than as an employer. Even if that is true, the risk is much more for the employer than needing to go find another job. As a small corporation, you typically have to put your personal assets up for collateral if you need a loan. When you need a loan to make payroll during a lean year, and your house is on the line, it’s a bit more worrisome than the prospect of getting laid off and having to find another job.

    There are, as I’m sure you are aware, myriad other comparisons that could be discussed. I didn’t mean to get so long-winded. But I have heard people imply that someone is stupid, scared or lazy if they don’t take the leap into self-employment (not that I think you were saying that) and I think that is ludicrous. Everyone has their own attitudes, values and comfort levels. There is no reason to think that those who have their own business are somehow superior.

    All that being said, I would do the same thing again if I had the choice. I have enjoyed it (most of the time).

    • jim says:

      One important thing is that when you work hard, you’re working hard for yourself. When you’re sacrificing, whether it’s pay or time or whatever, it’s for yourself. If you were to sacrifice or burn the midnight oil for your employer, they reap the majority of the benefits and that’s a crucial difference. Sure you could one day ascend to the ranks where you get the payoffs but it’s unlikely unless you strike it out on your own.

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