Many folks who work for others love to complain about the professionally unsatisfying nine-to-five grind of their daily job, yet refuse to change the status quo. That’s because the perceived relative safety of their steady job — and the guaranteed weekly paycheck that ultimately comes with it — is usually enough to keep them on the hamster wheel, even when the job is stifling and unfulfilling. True, that strategy may ensure long-term employment, but it won’t make you rich — even with an annual salary of $100,000.
The bottom line: Playing it safe never maximized anybody’s financial potential — that requires taking a risk via entrepreneurship.
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There’s been many stories about people who are rich and have made far less than $100k. It’s not about the job you have or even the income, it’s about your lifestyle, your savings, and your committment. I’ve seen a lot of people that I know are rich work for companies big and small for their entire career.
If you are equating “financially free” with “rich” then I will agree with you. There are lots of folks who are financially free making far less than $100k.
If not, all I can say is there will always be outliers, but rich people (as in wealthy) earning an average salary — or even a very good one — working for an employer are going to be the exception, rather than the rule. Unless you are an entrepreneur, your income will always be limited to some degree — not so for the risk takers in life. The sky is the limit!
(That’s my story and I’m sticking to it!) 😉
So true. I am on the hamster wheel for now but wouldn’t be opposed to jumping off it in the future. Timing is key.
If they’re able to start saving just a small portion of their earnings early enough in their working lives, and leverage the power of time through compounding they may have a chance. But it requires incredible foresight that not many have when they’re young and foolish. I certainly didn’t, so having to make amends to myself in other ways; working harder, smarter and through entrepreneurship like you say.
to me that is the defintion of a free enterprise system yet schools are teaching kids to be members of the labor force as employees.
the funny thing is that there are 27 million businesses out there but only 6 million of them have employees. what does that tell ya?
Great point, Griper.
If I only knew then what I know now, I would have taken a risk and started my own business.
Some of us love our 9 to 5 daily grind job and it pays pretty well! I also had to work up to a 9 to 5 job from nights and shift work so I appreciate a fixed daytime schedule. I also could not own my own business (feasibly, it can be done but most I have know could not be sustained due to the legal issues) in my profession in my state without rewriting state law. Now I do support and contribute to my professional organization that tries every year to change the state law but realistically it’s not going to happen anytime soon. So don’t knock “employees”, some of us have found a passion and a pretty good income working for someone else.
I don’t think Len is knocking 9-5 workers. He’s saying that the only way to get super rich is to work for yourself!
I hear ya, CandiO. I enjoy my 9-to-5 job too. But even though it pays me very well, it won’t make me a wealthy man. 🙂
Len is correct – the key here is leverage.
Employing capital to create your own business allows one the ability to scale. You can sell $10k or $1M each year in your own business, depending on how you run it.
Comparatively, your salary is fixed.
Whilst I was a carpenter for 13 years I was earning good money but of a evening worked online learning programming and online marketing
I started making a little money online but because of work I could not put as much time into as I would like used to get in at 6pm, shower, dinner fall asleep and repeat
The decision do I quit carpentry or not, I had it easy with carpentry but as most trades will tell you “you will never get rich on the tools”
I had already wasted 13 years and was not much better off
Then a friend who is successful told me this which I always think about
“fear is what stops you”
We all love safety nets but nearly all rich people have had to take risks that’s why they are where they are some you win some you don’t
I not saying take stupid risks, but people need to get over the fear and stop thinking it never work
Anyway I quit carpentry 3 years ago and whilst there been times I thought It was all going wrong waiting for payments or earnings down for a month and wondering if i better start resharping my chisels
it was the best decision of my life
And whilst I earn more now then I ever did with carpentry it’s not the money it’s the freedom to do and try different things when you want to that I love
Nobody became a billionaire working for someone else, but I know a few multimillionaires who aren’t entrepreneurs.
On the flip side, my dad owns a very profitable (multi-millions per year) business, but there were plenty of years (even as little as 15 years ago) where he didn’t take a salary to keep things afloat. Its very difficult for me to say I would take the same risks (especially since there were 5 kids in my family and my mom didn’t work outside the home much).
Really rich is a good goal, but I think many will be satisfied with just sort of rich.
I think that is a fair point, Hannah.
I had a pretty good salary for the time I was supposed to work (2-3 hours/day – I was a radio DJ). So I had enooooough time to start a side business as well.
Even if my wage was pretty good (and the hourly rate was actually great, provided I probably worked 1/4 of the time others did for the same money), I never earned as much as I did since getting my web design business up.
I work from home, so it’s not a big business), but even in my worst months I made more than my ex-salary. And the good months? I cannot tell anyone here about the income, since they’ll probably stop talking to me, there are people here who work for more than an year to get this money.
Hello Len,
What is your definition of “rich?” While I would tend to agree that most billionaires started their own company, I know plenty of “employees” who are millionaires and multi-millionaires- which I think most would consider “rich.”
Love your column and read it frequently. Thanks, John
Thank you, John.
I confess: the title is a bit hyperbolic. There are millionaire “employees” out there, to be sure — but the odds clearly favor those who are their own boss.
Some of us don’t work for “the other man”, but of primary importance to us is our independence. Getting rich is not of interest to us.
Ok Len I will bite on this one.
Tom Sawyer had the right idea. Get people to pay you to paint the fence.
As far as business goes. Amazon took 20 years. We want shiney and new now and the hamster wheel and debt is what we are taught by culture, television, neighbors, and some classrooms. and the boomers are just figuring it out. Look up how to create a flea circus. There is such a thing. I rather be the ring master.
I compare starting a business with a cruise. Big difference sailing across the ocean on a ship than doing it yourself. Get to the same darn place. One you gain 15lbs and acute inflammation,credit card debt or the other you wind up an Olympian , check from a sponsor, and an adrenaline junky wanting more!
Bottom line. There is more than enough potential out there looking for a kinesthetic mind. So should I start a company called the Covid 20 diet, portfolio, lifestyle, or a Costco for pecking prepping prepers potential pandemics,
As far as my classroom. Kids are taught two life styles. The FIRE lifestyle or the COVID lifestyle! Will let MMM handle that piece.
Been a nice morning here in Penzonia!
Entrepreneurship has it’s own risks. There is a lot of survival bias out there, of course you hear about the rich entrepreneurs. But few boast about the failures, many succeed only to replace “the man” with a business that is basically the same as a job. I get your point – go for it. But let’s not fool ourselves – research the failure rates. And yes, one often has to fail multiple times before making it. But there is still no guarantee of ultimately making it. But not to be all doom and gloom. There has never been an easier time to be an entrepreneur – the costs to start a business have never been lower, the cost of failure is much less than in the past. Back in the day, one had to put up huge capital amounts up front and risk losing it all – failure had serious consequences. Now, there are so many ways to get into business will minimal investment.
All great points, Frank!