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Employee or Entrepreneur : Is one better than the other?

Last week Get Rich Slowly had a post from a reader Tina about what she did with her lottery winnings. She made very responsible choices, unlike usual lottery winners. What sparked my interest most were the comments. As with any windfall discussion, there were some people who thought investing the windfall into a business would have given a better ROI as opposed to investing in index funds. Entrepreneurship is a dream for a lot of people and a lot of people think “working for the man” is something terribly wrong. Why? Now I am not talking down on entrepreneurial folks, we need them, they create the jobs, but at the same time, just entrepreneurship without good employees won’t work. And if we are talking about monetary benefits, yes, working for yourself has a lot more potential than working for an employer. But honestly, can everyone make it at that level?

Most people dream of self-employment, but not until they take the plunge do they discover the true benefits and the problems with working for themselves. May be I have been with too many people who don’t care much about money or owning their business. I am NOT one of the people who think starting a business is the way to go. Some people should absolutely work for others, some people should most certainly work for themselves, others should do a bit of both.

You should be an employee

There are certain benefits that come with being an employee. The first one being – stability. Stable pay, stable benefits, vacation, health care… If getting paid $5000 one month and nothing the next makes a person freak out, they should be an employee. I was discussing this with a die-hard entrepreneur friend, his comeback was – “well, if that is all you want and you have no drive to go far and beyond… it is your choice”. Are you kidding me? Employees don’t have the drive? Anyone who has passion and love for their job works very hard to excel. Sometimes a job by its nature cannot be spun off into a business. For example take any scientist. A lot of them just want to be at peace doing more science. It is challenging and fulfilling for them. Does that mean they are not hard working? Absolutely not. Their passion is to unravel the mystery of science. If someone gives them a McDonalds franchise to manage, even for free, they would be miserable.

I hate when someone use phrases like “not cut out to” be an entrepreneur. Does that mean entrepreneurs are better than employees? If someone is the best in their field and are happy with what they do without wanting to learn all the other business side of things, why is that wrong? It just doesn’t interest them.

Not everyone hates their job. They have the same passion as entrepreneurs, they just chose a safe and structured environment to work on their passion.

Wrong type of employee : On the other hand if you are staying as an employee and don’t feel like getting up in the morning because you dread the day, you should try to be an entrepreneur and should go after what really makes you happy. If you feel frustrated with life, then what is stopping you from starting your own business based on your passion?

Trivia : Self employed men made $12,000 more per year on average  (that amount was $2,500 for self employed women). But the variance in annual earnings was greater among the self employed than the salaried workers [Translation : Not everyone will be better off self employed]. Also Self-employed men and women experienced slower annual earnings growth relative to their wage/salary counterparts for the first few years, their earnings grew faster after a critical number of years. Source : Earnings Growth among Disadvantaged Business Owner

The employee debate:

Employee or entrepreneur 1

You should be an entrepreneur

I know some people who are great entrepreneurs. They like wearing multiple hats & taking risks for more rewards. Freedom drives them, they feel suffocated working for others. Entrepreneurship is not easy, a lot of people want to own their company because they think it is easy money. No. Far from it. It is flexible, but it is not easy or less time consuming than working for someone else. You need more self discipline to be an entrepreneur than an employee.

Another caveat in making the leap from employee to entrepreneur is figuring out what your true passion is and what you would like to do for money. Just because you are good at a hobby doesn’t mean you should start a business and try to make money off it. The stress to make money might make you hate the hobby. If you like something and have the passion to go after it, you should be an entrepreneur.

Wrong type of entrepreneur : If you want to be an entrepreneur to only make a quick buck, you won’t be able to withstand the pressure and excitement a business brings.

Trivia : Only 36+% of business owners had an IRA, only 1/3rd of them contributed to their IRA for the 2005 tax year (when this survey was taken).  Less than 2 percent of business owners own a Keogh plan. Only about 18 percent of business owners participated in a 401(k)/Thrift plan. Source : Saving for Retirement: A Look at Small Business Owners

The entrepreneur debate:

Employee or entrepreneur 2

You should be a bit of both

I think personally I would fall in this category. I really like my career, I like my stable salary, but I don’t like the politics in it. I didn’t grow up in an entrepreneurial environment. I am still learning the ropes. At this stage, I want to do both. Yes, my hours are brutal, but until I start earning a stable income from my other ventures. I won’t give up my career. Even if I start earning more I won’t give up my career, but I would like the freedom of taking a much lower paying job in the same field. I won’t be able to earn as much as a full time entrepreneur while I have day job and that is ok with me. I would prefer to exactly time how much I want to make at what point in my life. I know my strengths and any weaknesses. I want to have a stable income while I work on my weaknesses. Some people might say there will never be a right moment. But I think that depends on the individual too. I know I have enough drive to make it work and I will. The safety of my job makes me take more risks than I would have done if I was solely dependent on my business income. So for me this is the ideal situation for now.

Trivia : About 73 percent of total U.S. firms operated as sole proprietorships in 1997. More than half of the total proprietors were “moonlighters” (part time entrepreneurs) in 1999. Source : U.S. Sole Proprietorships: A Gender Comparison

Each of us have different passions and different things that drive us. There are mediocre, average and excellent individuals in all three categories. There are pros and cons to all 3 situations, but how they are weighted is unique to the individual. One is NOT better than the other as long as the individual is happy with their choice and it is working well for them. It is more important to figure out what is important to you and what works for you. If you are not happy with any aspect of you life, change it!

Now I would like to hear from you. Are you an entrepreneur? Or do you prefer to be an employee? What made you choose one over the other? Have you regretted your choice? What is it that keeps you doing what you’re doing?

{ 17 comments… read them below or add one }

20's Finances

There are two things I appreciated from this (among many). One, the comment that you are sick of people using the “not cut out to be…” phrase. I absolutely agree. I know a lot of successful people who are employees. I also like the idea that being an Entrepreneur is not for everyone and that is okay! Gold luck earning a stable income in your entrepreneurial ventures.


Brad Cummings

I would say just like some people are not cut out to be entrepreneurs, others are not cut out to be employees. I fall into the latter category. I didn’t understand that this was even an option for a while but once I started my own business, even when the waters were bumpy to begin with, I knew I had found myself. I was continually frustrated with working in an office and thought there was something wrong with me.

I don’t look down on employees in any way. In fact, I have several who work for me who do a phenomenal job! It’s just a different mindset and as they say, it takes all kinds to make the world go round.


Tim @ Faith and Finance

I would say I’m a bit of both right now. I don’t think I’ll ever stop being entrepreneurial, but I also don’t know if I can say with certainty that I’ll never work as an employee again.



I am a full time employee and a bit of an entrepreneur. I have some side projects, like blogging and planning flash mobs, to keep my income diverse. But at the end of the day my bread and butter is my full time job and that gets first priority.


Ashley @ Money Talks

Being self employed is certainly not for everyone. And it’s a good thing too because like you said, we need employees too.

I personally don’t have a problem with the phrase, “not cut out to be..” I don’t think it indicates “not as good as..” I take it to mean that your skills don’t match the job requirements. I’m not cut out to be a nurse. Doesn’t mean nurses are better than me, other than better than me at nursing… :)



I agree with Ashley I think you are taking the term “not cut out to” a little too close to heart….has someone said that to you?

The Wife is “not cut out to” be an employee for the most part. Could she be one? maybe but she wouldn’t be good at it for the most part. I don’t think it is a derogatory statement.



@Evan and @Ashley, yes I have heard people use that in a “not good for” meaning. With English not being my first language I assumed that is what it means :)


Financial Samurai

When I graduated college, I had two options: 1) work at what I thought was the most prestigious firm at the time in a sector I wanted to join, or 2) go to a foreign country and work on a new product. I chose option #1.

I’ve always wondered what it would be like to be an entrepreneur, but the dot come bust sure put a damper on things. I like the combo of doing both. Both serve as a balance and a hedge.



Andrea Pokorny

Personally, I’m success driven… be it working for the man or building my own business. I loved climbing up the corporate ladder but when I began a family, my priorities shifted so I quit. Now, I have the flexibility to put my family first. Of course, now being an entrepreneur I don’t have the “steady income” you refer to, but we’ve made sacrifices in certain areas (for now). It’s not about the money necessarily but I do intend to become way richer being my own boss (side bar) =) …the bigger picture is I’m happier doing what I’m doing now, I’m home with my kids where I want to be, I still have goals and aspirations that I work on daily and I’ve got my health!



In my thirties, I was an entrepreneur and continued it well into my forties and fifties. I made enough money to go do what I think is my new love, teaching. I love the idea of influencing people in school and on my blog. It is great to love what you do!


Everyday Tips

I know plenty of people that would be terrible business owners. They don’t have the motivation to do the bare minimum, let alone be an entrepeneur. (You could argue ‘maybe they don’t like what they are doing’. That is possible, but I do think a certain percentage of people are just plain lazy.)

My husband hates having a boss. He truly needs to work on his own. However, our financial constraints do not allow for that at this time. Someday, but not now.

Me? I am so busy that I cannot imagine being responsible for a business. Working part time is working out quite well for me. Who knows what my future holds though.


Jana @ Daily Money Shot

I think I would fall into the category of both, although as I described on my blog, I’m terrified of full-blown self employment. I grew up as the child of an entrepreneur so that’s what I know to be the norm. However, it scares me to no end although the idea of working for myself on my own schedule does please me.


Jen @ Master the Art of Saving

I think it’s really important to find the right fit (for them) as to which truly reflects them and what’s important to them.
Thankfully I fit into the entrepreneur category—I guess it’s a good thing I don’t have a job. ;-) I’m not actually making ANY money but I love what I do every day and couldn’t imagine doing anything else. I’ve always had the entrepreneur bug, ever since I was like 5.



I fall into the bit of both category. I love the stability of working for someone else (although in these markets nothing feels that stable) and the challenge and creativity in running my own business on the side. Even though my hours are crazy and weekends are work days too it’s fun and I feel more alive than ever! -Sydney



I think that today, you have to be a bit of both. If you’re an employee the greatest benefit to you is to have an entrepreneurial mindset. This doesn’t necessarily mean going out and starting a businesss. But the mindset of taking risks, exploring other activities, creating systems. Entrepreneurs have a knack for knowing how to approach and deal with certain situations. In todays economy this mindset is crucial to every employee.

Like I said I think that if you’re an employee you should be going to work and doing the best you can at your job but also working on other projects that you love and can generate income for you incase you need it.


Brandon Pearce

I never thought of myself as an entrepreneur, and only ever wanted to work at a stable company as a computer programmer. But I decided to start selling some software I had made for myself, and over time, it grew enough that I could quit my job. I’ve streamlined the business so now I only work five hours per week, and have time to travel the world with my family and pursue other goals. I LOVE my life! Sure, it took a lot of work to get to this point, but I would never go back to full-time employment. I’d find another way to make a living. I think entrepreneurship is a skill that anyone can learn, if they’re willing to give it a try. Maybe not everyone will enjoy the business building process, but if you have a strong end goal in mind it can make all the effort worth it.



I’ve been on both sides of the coin, and I’ve switched between one or the other. Whenever I’m an employee, I feel suffocated and my stress level is through the roof. I feel like a square peg in a round hole. The two times I’ve been self-employed I’ve really enjoyed it at times and loved the freedom, but the occasional lack of income was frustrating. I recently accepted supposedly a great job little over a month ago and am right back to where I was from a stress and anxiety point. I have no issue saying I’m not cut out to be an employee, because it’s when I feel the worst. I can look back to when I was self-employed now and recognize some errors that I could correct and be more successful next time around. People say you work longer hours being self-employed, I’m not sure that’s the case either. I haven’t had a day off in a month being on salary, so I’m not sure I buy that argument. Haven’t made a decision whether I’m going to stay or go, wish me luck!


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