Congratulations if you are an entrepreneur. Congratulations if you have already amassed great wealth. Congratulations if you have an early exit strategy all planned out for one day retiring from your job.
As I read through many other personal finance blogs, there seems to be a great deal of people on the path to success. Some of our fellow bloggers are bringing in hundreds, if not thousands of extra dollars every month. That’s pretty impressive for simply finding new ways to share opinions and information, and through selling virtual real-estate to advertisers. Way to go!
But whether its blogging, E-Products, real estate, investing, or anything else you’ve found some small success with, I think it’s very important to put things into perspective. And that perspective is this: Unless you’re got a solid plan, it’s not time to quit your day job just yet.
Why It Might Be a Bad Idea to Quit Your Job:
Let’s look at all the reasons why you may not want to be so quick to leave your job in the rear view mirror:
• You have a career to build. That’s right, it’s about more than just money. All that going to work everyday and doing a good job should lead to something more self-fulfilling: a career. How cool is it to get your name out there and become a distinguished figure in your industry? Maybe you’re not going to be that rock star or athlete you always wanted to be, but you can still be famous.
• You get a steady paycheck. There’s a great comfort in knowing you’re going to get a paycheck every two weeks. Most people don’t value the stability of such income until it is taken away. Remember that.
• Benefits. Have you ever added up how much health insurance, dental insurance, vision insurance, life insurance, disability insurance, educational reimbursement, 401k matching, social security / FICA benefits, and anything else I missed would cost you out of pocket? Depending on how many of these benefits your employer has, they spend A LOT of money on you!
• Practice. Your job gives you the opperutnity to try a lot of different strategies – some good some bad. If you do something wrong, is it the end of the world? Probably not! Your employer will either barely notice or bounce back. But if you’re alone, you’ll notice!
• Taxes. When you get your paycheck, the taxes have already been taken out and you learn to live off of what you take home. But if you’re making money on your own, you’ll likely have to pay taxes into the IRS at some point. Unless you’re already planning for this, this will put a serious crimp in your finances.
• School. Why did you bother to go to college if you’re not going to work? Remember when you were young and you wanted to build the next cool thing or solve cancer? If you’ve given up on those dreams, maybe you just need to switch jobs.
• Discipline. Would you really know who you are or what you’re capable of if you weren’t constantly challenged with hard work? If you answer yes, then maybe you have more to learn about yourself than you know.
It is often said that truly successful entrepreneurs are not great risk takers; they are great risk reducers. If you’ve got an idea you know will be fool-proof, don’t let me or anyone else stand in your way.
But unless your plan for success has already yielded you a comfortable income for life, can be sustained indefinitely, and covers all the above-mentioned benefits above, I wouldn’t be so quick to give up on employment just yet.
If you’re unhappy with your job, get a new one. A plant needs the right amount of sunlight to grow, and your career is no different. Remember what it is you liked about wanting to become whatever it is you do. You worked hard to become whatever you are today. Don’t take your accomplishments lightly.
Have you ever thought about becoming an entrepreneur? Did you decide to go for it or did you decide it would be smarter to stay with your job? Please feel free to share!
Photo Credit: =”I Quit: 1” by rocketace, on Flickr
Evan @Smartwealth says
I like my day job, that’s probably why I would never quit. To be honest even if I make a lot more than I do right now blogging, I do it mostly for fun and because it is so different than my career. however if I hated my day job, then I would probably look to quit and make blogging a full time thing
100% agreed! I know a few people in our blogging community have made it work financially, and I think that is really great for them. But for my situation now (and until I start making some money), this is going to be more of a hobby. Either way, writing these posts is forcing me to learn a lot more about personal finance than I ever use to know (or thought I did).
Everyday Tips says
I did quit my day job, but it was to be home with the kids. I did end up going back part time eventually, but on my own terms. 20 hours a week and solely from home. The flexibility I have is what prevents me from leaving completely again. The money is decent, and I do like a reliable paycheck. I can make some blogging on the side and work 4 hours a day on a job that is not my dream job, but allows me to do a lot of other things in life. If I were to quit and start my own business, I would have to work full time (I am guessing) to make what I make part time.
Your situation is a little different. I consider anyone who has ever quit their job to stay at home with kids to really be leaving one job for another! Ask anyone to stay at home with a house full of kids and they will see it is a FULL TIME JOB! But with that said, this article was about weighing the benefits of your two options. So let’s do that for your situation. Some people would argue that staying at home with the kids pays nothing; or at best, saves them money in daycare. But is life always JUST about money? Not to get too deep, but I would argue back that staying at home with your kids has a completely intangible value. My wife and I thought long and hard about this when our children were born. Ultimately, we choose to put them in daycare so my wife could continue to work. But that doesn’t mean that one or the other is wrong – it’s a personal choice. Your children are only young once and once it’s over, it’s over. Spending as much time with them as possible and being a positive influence in their lives will always be a priority as a good parent. Therefore, if quitting your job is what you felt to be the right choice at the time, it probably was!
Alik Levin says
100% agree on all points. I love my day job in so many ways, including the paycheck, of course. But beyond that I work on tough challenges with smart people with great impact, it inspires me and it’s rewarding too. My dad loved to tell me this little story about poor tailor. Once they asked poor tailor what would he do if he became a king? He said, I’d do the king thing but also I’d do some sewing at nights… 😉
I love that analogy at the end! It just goes to show you that in some circumstances, what a person does or is passionate for will truly define who they are. If that means being an entrepreneur, then go for it and good luck! But if not, then we need to find (or remember) what will make us happy in our careers.
Barbara Friedberg says
Entrepreneurship is for a certain type of person. It’s not easier than working for a boss. I like your cautions.
Absolutely! Sometimes it’s nice to go to work and know that there is a hierarchy dealing with much more major issues than you have to. And either way, you’re still getting paid tomorrow. When it comes to being on your own, that’s fine if you can stomach it. But I think a lot of people will find out its much harder than anything they’ve ever done before. Just be ready for the ride!
Buck Inspire says
Excellent post! Too often we rather chase being a rock star, pro athlete, and now pro blogger instead of an enjoyable, reliable career. Guess it sounds better at cocktail parties?
Ha! Yeah, you’re right. There is definitely more bragging rights to being an Internet entrepreneur than telling people you sit at a cubicle and manage files all day long.
Thanks for reading. In all seriousness, I think people don’t realize how hard it will be to chase these types of dreams. I’m certainly not suggesting that we all give up or don’t chase our dreams, but that we acknowledge the seriousness of the challenges that lie ahead.
i say there is risk in not doing things. the risk of lost income is a real loss itself.
most will be surprised at how little risk i take to earn the returns i make.
That’s an interesting way to look at it. Risk is relative for everyone and is in the eye of the beholder. Sharpening our tolerance for it will definitely have its benefits.
I recently just quit. Just couldn’t take it anymore. I made it list of pros and cons, and it all pointed at me to stay at my job until I was at least 55 years old–by then my nest egg would be pretty sizeable, but it got to the point where I just had to go. But that’s okay–nothing says that I can’t go back to work in a couple of years if I have to. If my plan to build up my passive income doesn’t work out, I can move on from there. I’m lucky in that it won’t take much income for me to coast by (I enjoy living a very simple, minimalist life) until I’m 59 and 1/2 when I can start withdrawing from my 401k, and then at 62 I can take Social Security.
I know that’s a hard decision. But sometimes you just have to do what you know is right rather than what makes sense on paper. Good luck and I hope you are able to coast for as along as you need to.