Is Working Full Time a Terrible Investment?

Is Working Full Time a Terrible Investment?

A while back, Johnny and I read an interesting article, and it’s stuck with us since. The article sells the idea that working for someone else has a capped upside and an unlimited downside. And that the only way to be truly rich (both in money and life) is to work for yourself. Now that’s a bold claim, considering almost all of us make our money by working full time for a salary. So how does the author back it up?

Well, the capped upside comes from us putting all our money toward this one thing (our job) that gives us only a 3 to 4 percent gain each year, aside from the occasional raise. And the unlimited downside comes from us being able to lose it all at any moment if someone else decides to fire us or lay us off. Thus, a terrible investment.

On the flip side, the article states that the only way to get really rich is to work for yourself. The author then goes on to validate his statement by showing how all the top income earners in America and the folks on Forbes billionaires list make their money — by being their own bosses.

Finally, and this is the part that made our ears perk up, the author claims that entrepreneurs are more rich in life. Why? Because entrepreneurs are “free to chart their own courses, to make their own decisions, to make their own mistakes — to let the sky be the limit not just financially but also (and almost always more importantly) personally, too.” Or so the article says.

The author concludes by imploring all his readers to take a chance on themselves and start their own business since that’s the only way to be rich financially and personally.

So what we want to know is what you guys think of these statements. Maybe we can’t become billionaires unless we own our own company. But how many of us want to be that rich? Second, is it actually hard to live a rich life if we’re working for the man? Johnny and I are conflicted on this one. We’ve seen firsthand a lot of downsides to having a full-time salaried job — hours you can’t control at a job you don’t really like where you could be fired at any moment. So the idea of being our own boss appeals to us. But in that sense, I think it appeals to everyone. Would our life be richer if we took that chance? Who knows.

Now it’s your turn to chime in on a) becoming rich and b) living a rich life. Can they only be achieved through entrepreneurship? Is having a full-time job really a terrible investment? Tell us what you’re thinking.

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  • Reply Racheal May 19, 2015 at 7:29 am

    Many times when I sit down in my cubicle I hear that saying, “if you don’t work to build your dreams, someone will hire you to help build theirs, ” or something like that.

    But, at least right now in my life, I think working for someone else is better. I have a toddler and am pregnant. If I had started my own business, I doubt it would be successful enough now to fund my maternity leave, and I would likely be working many more hours than I am now per week.

    Also, starting your own business is a risk financially and a scary one when you have a family to support.

    So I would argue that I am pretty “rich in life” right now.

    But, I will say I have considered starting my own business once my kids are older, but doing what? I guess I have some time to figure that out. Ha! 🙂

    • Reply Joanna May 24, 2015 at 10:40 pm

      Totally. There’s an aspect of working for someone else that’s just so simple and uncomplicated. You don’t have to worry about anything but doing your job, and in return you get money, insurance, and other benefits given to you with no hassle.

      It sounds like you’ve found a job that gives you good balance for the current stage of life your in, which is a lot more than what most people can say!

  • Reply Megyn May 19, 2015 at 7:50 am

    My husband is a firefighter, and frankly, it’s a pretty sweet gig. He works 24 on 48 off. During that 24 hour shift, he’s allowed to sleep, watch TV, and generally hang out after chores/station/truck duties are done. He gets a ton of vacation and sick leave. He’s part of a union, so it’s actually pretty hard to get fired. He gets a good pension after 20 years or an amazing pension at 30. Sure, he often runs on a sleep deficit, has to be mentally and physically ready at any point, and has to be able to process and handle really difficult scenarios. Oh and there’s the missing parts of holidays and kids’ events. However the benefits far out weigh the downsides, and I would not give it up for him to take the risks as an entrepreneur.

    • Reply Joanna May 24, 2015 at 10:42 pm

      Very cool. That sounds like a pretty darn perfect gig. I wish more full-time jobs allowed for that kind of stability and hours! And he’s doing something that’s rewarding and meaningful, which is a rarity these days!

  • Reply Rob May 19, 2015 at 8:49 am

    I’ve known people who were both kinds of workers – those employed by others as well as self employed. Each has it’s rewards, risks, and different demands. Some in each group were very successful, others sadly not so. You pays your money, you takes yer chance. Basically one has to know one’s limitations in life and really investigate the nature of what you plan to take on in order to choose which is the way to go. Personally, I preferred to be working for the man – but on my own terms.

    • Reply Joanna May 24, 2015 at 10:46 pm

      Agreed. It’s impossible to make statements that fit across the board for entrepreneurship or working for someone else. If you find a job that allows you to lead a fulfilling life, it really shouldn’t matter how you’re making your money!

  • Reply TT May 19, 2015 at 9:06 am

    I think the article, while intriguing and thought provoking, is overly simplified in its conclusions. It looks at the top 400 richest people and extrapolates based on their experiences alone. Do entrepreneurs generally have a higher earning potential if things go well? Absolutely. Do they have to take far greater risks than the average salaried employee. Absolutely. “Is having a full-time job really a terrible investment?” If you are focused on making into Forbes top 400, then the answer is a resounding yes!

    I don’t mean to be a Debbie-downer on entrepreneurship–I hope to take it on myself soon. This article just makes it sound like a golden ticket, which it is not. It is fraught with risks and perils that most don’t consider. Bloomberg claims that 8 out of 10 business fail within 18 months. Ouch.

    Can you be rich in life without being an entrepreneur? Can? Yes. Will you? Depends on you. I think the comment about the Fireman is a wonderful example of this. Now is it going to be easy and handed to you? No.

    • Reply Joanna May 24, 2015 at 10:57 pm

      Yes… major oversimplification going on. And I agree 100%… the chances of failure in entrepreneurship is so high. Still, life is short, and I admire people who go for it. Finding that work/life balance whether you work for someone else or work for yourself is going to be something you have to work toward either way.

  • Reply Sarah Alves May 19, 2015 at 9:28 am

    I love my 8-5, but often dream about starting some kind of side business that might eventually turn into something that could sustain my life. The idea of working for myself (and only myself) is very alluring, but that being said, I have no plans to quit my dayjob, so to speak 🙂

    Interesting topic!

    • Reply Joanna May 24, 2015 at 11:01 pm

      I think that describes a lot of us! Johnny and I hope to jump off that ledge someday, but when that day will be?? Who knows!

  • Reply Raia May 19, 2015 at 10:47 am

    This article got me thinking! The piece that is missing for me from this article is an acknowledgement of the sacrifices in time, money and energy most start-ups take. Many entrepreneurs go bankrupt, mortgage their personal assets, and spend every waking hour working to get their company started. With great risk comes great reward, and everyone can or should take that kind of risk.

    Many of the entrepreneurs I know run day cares out of their homes, own small restaurants or coffee shops, make and sell goods online, are not really, really rich. They work many hours, and are passionate their choice, but it’s still demanding work that requires a lot of investment without a huge reward. They also tend to have partner that works a 9-5 (or a wealthy family) to support them when the business is not going so well.

    Most of those super rich entrepreneurs the article lists are men (who tend to be more comfortable with risk), who started their companies when they were young (no families to support and they could put off children until the were in their 40s), with support networks to catch them when they fail (every entrepreneur fails many times before they succeed). Starting a business is a great fit for some people, but not for everyone.

    • Reply Joanna May 24, 2015 at 11:20 pm

      Agreed… The article describes a very one-dimensional look at entrepreneurship. I think you describe perfectly what’s really going on behind the scenes for many entrepreneurs! Great thoughts!

  • Reply Katie Ball May 19, 2015 at 11:06 am

    I am pretty confident I would not only make a terrible entrepreneur, but also a terrible boss! While I am 100% a go-getter, I am also very much a procrastinator! Working for someone else gives me that added pressure to get up, get to work on time, get my tasks done by deadline, etc. I work for a state university and LOVE it. While I do have a degree and could get a salaried position, I have been working in full-time “hourly” positions for the past few years (after teaching elementary school). This means that when it’s 4:45, I leave for the day. Period. I am not expected (or allowed, actually) to stay beyond my normal hours. This is a HUGE benefit to me as a parent of a toddler (and baby on the way!). I like that I can leave my work behind and focus solely on my family every evening. I also like that I can take time off without things falling apart at the office or having to worry about working while I’m away. Eventually I will move into a salaried position, but for now, this is the perfect place for me.

    I don’t think everyone has the drive or the desire to be an entrepreneur – I certainly don’t. But it is important to find a position you enjoy with a company that values you, your talents, and your personal life. I had to take a pretty steep cut in pay to find the career that best suited my life – but I definitely think the trade-off was worth it.

    • Reply Joanna May 24, 2015 at 11:24 pm

      It sounds like you have a great setup! Hold on to that job! The important thing is to love what you do. Whether you’re your own boss or working for someone else is irrelevant. You’ve definitely found that balance!

  • Reply Ry May 19, 2015 at 11:17 am

    Ha! My dad has two businesses and yes this has been much better financially for him, and one of those companies gives him an outlet for his creativity BUT the man never takes a day off. Even when it was just one business, the business ran him. There’s also a good deal of uncertainty about retirement and it’s only recently he’s gotten health insurance for himself and my mother. Partly because, while brilliant and actually a pretty good business man with the big picture stuff, he’s kind of crap at managing. I think this article is a bit overly rosey and oversimplified. There are so many factors! What kind of business? How skilled are you at the necessary business skills? Who, if anyone, are you working with? Also, tons of businesses fail in their first year, so will you have enough resources to weather the initial phases?

  • Reply Kat May 19, 2015 at 11:53 am

    This is thought provoking because I’m certain my husband and I would have different answers to this. He is the primary breadwinner, and I stayed at home for 2 years and now teach full time. My hours are 7:30 to 3:30 and I have the perks of paid vacations during all holidays and summer. Sure, I don’t make much money, but I do have a good schedule and lots of time to be home with my family. Someone told me that there were three parts to every job, 1) money 2) time off and 3) loving what you do for a living, and that having 2 out of 3 of those would result in a “great job”. I’ve had every combination of the above, and I’ve come to value 2&3 the most. I enjoy my job enough and I have time off to do what I want. My husband currently has 1& sometimes 3. He would talk positively of entrepreneurship since it has 2&3 and the potential for all three. Interesting topic, I think it depends on personality and situation!

  • Reply The Roamer May 19, 2015 at 3:15 pm

    Yes I do think its easier to make bigger gains when you are more in control of a situation.

    But like other said. Most businesses fail. Which means it’s not an easy transition. And running ,growing , and marketing are skill set of their own right.

    I will venture into entrepreneurship . because to me the upside is less about the money and more about the flexibility. When you work for someone else they dictate more then just your paycheck.

    Still though the limited upside when you work for someone else is true, just as much is to blame are the people who don’t actively manage their careers and just wait for recognition to fall from the sky. Lately I’ve been a lot more aggressive in managing my career and low and behold I got an 8% increase in December and another 10% monthly bonus starting this month.

    So the limited upside has a lot to do with people believing it and therefore not going after a better deal.

    So you can work for someone else and still make strides up in pay faster then the average worker.

  • Reply suzanne May 19, 2015 at 3:49 pm

    I think, for me, being an employee is best. I can see the advantages of being your own boss but with that comes big financial stress in difficult times, responsibility for employees and the potential impact your choices will have on them, never being ‘off’, all sorts of worries too numerous to mention! I am quite happy to be an employee. Does it mean I’m not ambitious? Not at all I don’t think. Its just what fits for me in my life. I think to start a business these days requires ingenuity beyond anything and the willingness to fail because often businessses fail before they get going again. I say well done to those people. Me however, I’m a content chick as an employee!! 🙂

  • Reply Aldo @ Million Dollar Ninja May 19, 2015 at 4:14 pm

    I say, “to each his own”. I believe that if you want to be in the Forbes 400 then being your own boss is probably they way to go, but being rich emotionally and personally can be accomplish with whatever you feel is enough for you.

    Also, the article names the Forbes 400 because those were the people who made it, but I bet you the list of people who tried their own business and failed (and are now miserable) is greater than 400.

  • Reply Anna Kristina May 19, 2015 at 4:52 pm

    The article is an interesting conversation starter, but it takes the best of one world and compares it to the worst of another. Plus it simplifies the definition of financial and personal richness, as if it were the same for everyone. I work an hourly job at a company that values my contributions and has allowed me to grow and evolve in my role, and that role now includes a lot of my passions. I get to leave my work at work, which is great as I know I could very easily be a workaholic. I’m also a personality that appreciates stability and likes to minimize risk. I have a job I love, great health care, a dependable paycheck, and downtime that is my own. I won’t make the Forbes 400, but I don’t want to. I’m happy with my life, and my husband and I are on track with our financial goals. Entrepreneurship isn’t right for us right now, and I don’t see our current situation as a bad investment.

    Also, entrepreneurship takes preparation and capital, and attempting it before you’re ready would be a worse investment, like buying a house without a down payment. You could argue renting forever isn’t the best idea for most people, but buying too soon can be a big financial, personal, and emotional disaster!

  • Reply Melanie May 19, 2015 at 6:37 pm

    I would love to have my own business and work for myself. But I am lazy. It’s just easier being able to clock in and out every single day and not worry about anything work related out of work hours. The reason I would love to have my own business would be for the enjoyment I would get out of it, not the money. I don’t aspire to be rich. It would be great to find something I love so much that I could do every single day, I just haven’t found it yet.

  • Reply Hilary May 20, 2015 at 3:23 pm

    I agree with some of the other posters. That is a rather simplified look through rose-colored glasses at the lives of entrepreneurs. My mom owned her own business and on Christmas Eve when the pipes burst, SHE had to go there and pay a plumber out of her own pocket and miss Christmas morning gift opening. Granted, this was a one-time disaster but still… Also, when you are an entrepreneur – I think it’s BS to think you “only have to work for yourself” or that “you are the boss”. The reality is you report to EVERYONE. and if you have a question, sometimes there’s no one else to ask. I personally have no desire to open my own business. I think I can be happy working for someone else and make a ‘good enough’ living. : )

  • Reply Amanda S @ Passionately Simple Life May 20, 2015 at 6:57 pm

    Interesting article yet there are too many outside forces that always make any scenario more or less plausible. As a person, I would not be a good business person. I’m too nice and always trying to make other people happy and never wanting to step on other people’s toes. And in a way I find freedom in being an employee of a large company. There is no dealing with complex issues that you might not have any idea about, there is someone already there to help you out. Not that I’d shy away from responsibility, but until you build your own company up, you are the one that makes the final decision for everything.

  • Reply Connie Sue White May 21, 2015 at 8:36 am

    I think it can be relative to where you are in life and your personality. I spent my first 25 years working for companies, putting in the time and liking the idea of “being part of a team” and working toward a goal with others…but it’s not that simple, especially in the dog-eat-dog world of magazine publishing. As I matured, my idealistic side kept being disappointed. I’ve tried to change this part of my personality. But I can’t. Until it happened, the thought of working for myself never appealed to me. Then one day it did, just like that. Maybe it was b/c I had achieved experience, both in my work and age and it’s a natural progression. When the chance to go on my own two years ago popped up, I took it. I have more work than I can handle, enjoy the quality of the clients I work with and the fact that I don’t have to get caught up in any office politics—or bad decisions. I make a decent living but it seems more b/c I live simply and don’t go beyond my means (or try to keep up with the neighbors). As long as I’m happy in my work, productive, and can pay the bills with some left over, and have time to do things I love, I’m happy. So, yes, I love working for myself! That said, if an opportunity to work with the dream team I’ve been seeking my whole career came along, I’d probably take it.

  • Reply Gen Y Finance Gy May 21, 2015 at 9:25 am

    This is a really good question to ponder.

    So many people automatically assume that entreprenuership is the holy grail to all thier problems. Grass is always greener on the otherside. In reality I don’t think that most people are wired for entreprenuership.

    I think it is entirely possible to live a rich life while working for someone else. Shoot, I know plenty of people who absolutely love their jobs.

    Anyone who thinks they want to take a stab at entreprenuership should start a side hustle to get a taste of what it is like. Because it is a lot of work.


  • Reply Christina May 23, 2015 at 5:43 pm

    I think it all depends on the parents both own business and while successful at times it was not easy. They worked long hours 7 days a week. Now that they are in their 60’s they have very little for retirement. I would never own my own business if I were relying on it 100% for income. However, I would do something on the side part time to increase our immediate income. I see working for others more beneficial in the long term.

  • Reply Christina May 23, 2015 at 5:44 pm

    I think it all depends on what the job is. Both of my parents owned business and while successful at times it was not easy. They worked long hours 7 days a week. Now that they are in their 60’s they have very little for retirement. I would never own my own business if I were relying on it 100% for income now and in teh future. However, I would do something on the side part time to increase our immediate income. I see working for others more beneficial in the long term.

  • Reply Kevin June 16, 2015 at 7:52 am

    IMO, It depends on the job, and how much of a nest egg you’ve got going. If one is living hand-to-mouth in a job that one hates, yet you see your employment as an eternal right, then of course this is true. If you’re in a job you like, with a decent budget and a bit of saving/investing on the side, this is another way to do well.

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