Speaking from experience, the reason you should start your own business on the side if you are currently working for someone else can be compared to diversifying an investment portfolio. If your portfolio is strictly made up of fixed income investments (bonds), you get a predictable, relatively small rate of return, with minimal risk, assuming they’re not junk bonds. The interest rate for holding that bond is known a head of time. It’s predictable.
Stocks on the other hand are more volatile. There’s much more risk, but at the same time, much greater potential to earn a significantly larger return. There’s a chance you’ll lose, but also a chance to be rewarded for your exposure to risk.
For most of us, our day job can be likened to the bond in the above example. For me personally, although my salary has increased rapidly over the past few months as a result of jumping around to a few new jobs, increases at that rate are unsustainable.
If I continue to bounce around like that I’ll come off as a huge flight risk, and I’ll eventually run out of new banks to work for. As a result, I can anticipate my 9-5 income to be fairly predictable over the next few years. My salary will most likely increase by ~2% each year which is fairly standard for the industry in my geographic location. Every few years I may get some sort of promotion that earns me more, but unless I leave the company those increase aren’t likely to be anything drastic.
Whether I break my back every day, or simply show up and go through the motions the outcome is fairly set. Promotions seem to be heavily influenced by timing, positioning, and politics more than rewarding talent and effort from what I’ve witnessed. Not much risk for me to maintain this stream of income, but also not much of a reward.
At the same time I’ve been developing a few side businesses as a way to generate multiple streams of income. As of now, these sources of income aren’t large enough to replace my day job, however they are growing at a much faster rate.
My typical raise will only add a few thousand dollars to my income per year at best. Nothing exciting, or even noticeable for the most part. My new businesses have added more in one year than the typical raises will in 5 years. They continue to grow and evolve, they’re exciting, the possibilities are limitless, and most importantly I’m working for myself. No one is profiting from my efforts aside from me. There aren’t a bunch of old men spending their days on a golf course and getting rich off the work of myself and others who are compensated significantly less for our contributions.
I see how much my income has grown from my side businesses and those income streams are new, evolving, growing, and contributing more to me on a personal level on a daily basis. Meanwhile my “bond investment” is the same today as it was yesterday, and will be tomorrow. In this scenario it becomes quite obvious where my focus should be. On mitigating risks and trying to get the largest possible return on my “stock” while keeping the “bond” in place until it’s no longer necessary to hold as an investment.
If the growth rate of my own businesses continues at the level it has been, you can forecast it out on a graph with my salary and over time it will surpass the salary by a significant margin. With this realization my business has become much more important to me than my career advancement. Not to mention all the none monetary advantages that come along with running my own business. Making money on my own is exciting and provides more fulfillment than my paycheck ever could.
What I value most in life is freedom. Freedom to enjoy life, create new experiences, travel, help others, give back, spend quality time with friends and family, learn a new skill set, studying things that are actually of interest to me, and be able to do what I want, when I want. That’s very hard to do when 9-10 hours a day, 5 days a week are locked down to a rigid obligation in order to receive a paycheck.
To me, this is the worst possible structure for anyone who values their freedom. I would much rather work for myself, on my own terms, with the flexibility to work any time, but also to use that time for other things if I so choose. And does anyone who’s locked away in a cubical for 8 hours a day actually work for 8 hours? Not even close. Why not make a deal with these people? Why not give them the opportunity to earn some of their time back by working vigorously for a shorter period of time?
I would happily push myself to put in 5 solid hours every day with no down time if it would earn me 3 hours of my life back 5 days a week. Over the coarse of your working life, you’d add years of time to do as you please, as opposed to aimlessly browsing the internet, socializing in the office, playing on your phone, or whatever else it is you do to kill time when you’re obligated to be in the office.
With an extra 15 hours a week, you could use that alone to create a small business on the side and make significantly more money over time. I value my freedom above all else and for that reason I have no choice but to work on businesses that could potentially replace my salary and break the chains of corporate slavery once and for all. If you’re interested in what those businesses are specifically you can find out here. The other side of the coin is making what you have go further by reducing and eliminating unnecessary expenses which can be found here.
In a lot of ways, mastering your finances and putting yourself in a strong position financially is key to your freedom. Money is what has us showing up to work every day and building your own businesses that generate a much more passive form of income, or have segments which can be automated, or outsourced will ultimately allow you to have the financial resources to sustain what you currently have, while freeing your time to enjoy life.
As someone who places much value on freedom, my idea of success isn’t measured in total dollars made or net worth. It’s measured in the currency of time. In my eyes, time is more valuable than money. Money comes and goes. The days of your life are limited and can never be gotten back.
Just think about how much your life would be different if you didn’t have to work 40+ hours a week for someone else. What would you be able to do with that time that you’ve been putting off? Is there something you’ve always wanted to learn to do? Is there a passion from years ago you wish you had time to reinvigorate and make a part of your life again? Someone you wish you had more time to be with, or help out? A topic of interest that you always wanted to research and read about in depth?
If you had the time to pursue these core passions over the coarse of decades, as opposed to spending those decades locked away in a cubical, how would your life be different? How would the person you become vary in each of those scenarios?
I’ve thought hard about this and have drawn the conclusion that I need to find a way to generate income outside of trading my time for money no matter how difficult that may be. It’s a fight I choose to partake in and I don’t intend to stop fighting until I reach the desired outcome. I’d rather reach that destination crawling my way to the top and sacrifice 10 years of my life making that happen than trade another 40 years in the conventional work environment which will severely limit my quality of life by constantly sucking up my time and energy.
My hope is that you’ll come to this conclusion as well, free yourself from bondage, and use your time to follow your passions, making the world a better place. If I can escape, I’d do anything to help others find freedom as well. You only live once, and your time here is precious. Protect it and spend it wisely. You may need every second you can get to fulfill your life’s purpose.by