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When I was old enough to have some experience and felt like I knew what I was doing but not quite as old as I am now I had an idealized notion of self-employmen

When I was old enough to have some experience and felt like I knew what I was doing but not quite as old as I am now I had an idealized notion of self-employment. Mostly because of the flexibility I imagined it would provide, partly because of ego. It took some dabbling and dealing with horrible clients before coming to the realization that self employment and employment are really two sides of the same coin. The goal if you want true flexibility and freedom should be to put yourself in a situation where you are no longer dependent on selling your time for money as your source of income. Now whenever someone asks if I want to do contract work for them I remind myself that I don't want to be in the business of selling my time for money.

darig 5y ago
You've got everything backwards... working for yourself is being in the business of selling the client something you promised them for money. Every decision was yours. Working for a corporation is being in the business of selling your time for money to the corporation who can do whatever they want with it.
ryandvm 5y ago
This is true. When you are a consultant or contractor, you still have assess to kiss and jerks to take orders from. You actually have to work a lot harder at keeping the folks in charge happy. And worse, they can fire you in two weeks instead of 6 months. The upsides are that A) you're hopefully making more money as a consultant and B) you at least get a change of asshole scenery every 18 months or so.
- deleted 5y ago
  [deleted]
- laurent92 5y ago
  C) Incentives are clearer. As an Asperger, dealing with corporate games and social games and the fakery of managing everyone’s mood is unbearable. Now founded a startup, the only job I have kept more than 2.5 years… and 8 in fact, and going strong. Either a customer is happy, or he isn’t because we don’t fulfill his need, and that’s easy to deal with for me.
- unishark 5y ago
  > And worse, they can fire you in two weeks instead of 6 months. In the US regular employees can be fired in two weeks most commonly, though big companies traditionally give a few months severance in good economic times. The upside of this is you can also walk away from a crappy job/boss/etc with two weeks notice. With contracting, you may be on the hook for the contract duration plus being pestered for support help forever.
  - JBlue42 5y ago
    Umm...not quite. Most US states have at-will employment, so an employee can be fired for any reason, at any time, effective immediately. For an employee, the implied social contract is to give two weeks notice.
    - unishark 5y ago
      By "can" do it I mean are able to without burning bridges or feeling like you've betrayed people. A big difference from walking away from a small business you run, by contrast.
- goatinaboat 5y ago
  When you are a consultant or contractor, you still have assess to kiss and jerks to take orders from. You actually have to work a lot harder at keeping the folks in charge happy. And worse, they can fire you in two weeks instead of 6 months You can choose between the illusion of security or the illusion of freedom, that’s the choice
suyash 5y ago
another way of putting it would be that your new boss is/are your clients so yes it is another form fo employment in the guise of self employment. True freedom would be when you can take yourself out of the picture and still earn income.
- pmorici 5y ago
  Yes, the most obvious way is to save enough to live off income from your investments but I would also include building a product business where you sell the product and there isn’t a direct correlation between your hours and your income.
- reasons 5y ago
  > True freedom would be when you can take yourself out of the picture and still earn income In this case the "boss" is the cash cow and keeping it alive; also maintaining marketable skills incase the thing dies. Having too much time and money on your hands can also pose certain social and mental health challenges. It seems everyone has a job whether they like it or not.
acwan93 5y ago
I kinda wonder if there’s a growing number of people who recognize this, hence the emergence of the FIRE (Financial Independence, Retire Early) movement. Anecdotally I’ve noticed more of my friends having this same mindset that you’re having whether they’re entrepreneurs or corporate employees. It seems like the system is rigged no matter which way you look at it. The only option really is to amass enough fuck you money.
- unishark 5y ago
  > It seems like the system is rigged no matter which way you look at it. The only option really is to amass enough fuck you money. It's not actually rigged though. People just sell themselves short due to information asymmetries and a just plain crappy business model (work for hire). Customers see it as a risk so are reluctant to pay much, but it's your skillset so from your perspective there's actually little risk. Better to license technology but maintain ownership so you can sell it again to others. And now that the risk is gone, the hotter the technology the more you can ask for working technology you can demonstrate. Of course this isn't possible in all technology niches but I'd say your goal when self-employed should be to maneuver into areas where it is possible. Business is a game of avoiding being the commodity that others profit from by building into wealth. Work for hire is a commodity.
  - PragmaticPulp 5y ago
    > Better to license technology but maintain ownership so you can sell it again to others. And now that the risk is gone, the hotter the technology the more you can ask for working technology you can demonstrate. Of course this isn't possible in all technology niches This is great in theory, but in practice it’s rare to develop something that can be passively licensed off. Usually it becomes a business that requires constant attention as it scales. I know a few people who have developed apps that sold well initially and looked like easy money, only to be buried under a flood of copycat apps as soon as the market realized the opportunity was there. The best success in cutting the cord seems to be building a company which is then sold off, but that’s hardly an easy path. This feels a bit like the “passive income” pipe dream that is frequently touted in FIRE forums but rarely comes with practical, real-world examples.
busterarm 5y ago
It's unfortunate that darig's reply to your comment is being so heavily downvoted that I can't reply to it because essentially they are correct. Most people only know how to sell their time, which is why most people are employees and many self-employed people have no free time. It's entirely possible to be self-employed and sell something that is not your time, or maximizes the investment of your time so that you can do something once and sell it more than once.
- mixmastamyk 5y ago
  You can click the time of the post, then vouch, another might help bring it back from the dead.
  - busterarm 5y ago
    Indeed, I did vouch.
- captainmuon 5y ago
  How do you sell something that is not your time? Money is just crystallized work time. If you don't sell your time, you got to... sell other's time (by having employees)? The idea of making something once and selling it multiple times (like software) is nice, but the way I understand the market works is that competition will push down the price so much that even with your one time work investment, you'll only get the "average" rate in the end. So that means, find a niche where there is no competition yet?
  - ido 5y ago
    Your notion of competition in the free market is sorta like the frictionless spherical horse in the physics joke. A successful product will produce more profit than your hourly rate.
    - captainmuon 5y ago
      Yeah, of course it is idealized. You know the joke: two economists are walking down the street. One sees a $50 bill on the sidewalk and says to the other: "Did you see that $50 bill on the ground?" - "Can't be, if it was there someone would have picked it up!" Long term I think it is true, though. If you don't have any unique advantage, competition will drive down your revenue to "market" rate. But that's kind of idealized equlibrium, of course there are successful products, innovations, and so on.
deleted 5y ago
[deleted]
snow_mac 5y ago
How are you no longer trading your time for money?
- throwawayffffas 5y ago
  There are two known ways to do that, a) Sell things instead of your time. b) Sell other peoples time.
jasonkester 5y ago
Odd that this article (and this comment on it) use a definition of “self employed” that still involves having an Employer. I’ve always considered the term to mean running your own product business. I certainly never used it to describe my consulting work. The author’s points all hold up, but it would make more sense to change the title so that it was cleat that it was comparing W-2 salaried positions to 1099 contracts.
- fouc 5y ago
  Self-employed is usually synonymous with a contractor, someone that's working for clients and typically trading time for money. A business owner on the other hand would be a more apt description for someone that is running their own product business or running a services business where they have employees or outsource the service work.
- biztos 5y ago
  In the US it's a common term for what the IRS calls you, regardless of what you actually do. Own an S-Corp selling toothpaste? You are self-employed. Have a sole proprietorship mowing lawns? You are self-employed. Have a C-Corp mowing lawns? You are an employee! But then your corporation has to pay taxes too.
buildingmateri 5y ago
Solution is kind of straightforward: Work said 100k job for 5 or 7 years, perhaps with safe investments e.g. the S&P, get 200k+ to your name. Use that to then support years of establishing your own business, own terms, own freedom.
- donkeyd 5y ago
  Have the business fail after putting all of your money in it, lose house, lose self-respect, burn out, go back to working for 100k a year (or less because you have nothing to show for the last couple of years). Everyone always assumes that if you work hard, you will succeed... It's the American dream. But it's far from the truth for many people who try this type of stuff. Most small business owners end up working 70+ hour weeks for maybe a bit more than the 100k some people might get working for an employer, with the added weight of having to run a business and losing everything if it fails.
  - filipo 5y ago
    How to limit the danger of losing everything if it fails? Isn‘t that just the issue if you invest everything you have or stop too late (kill the business early enough if it does not work)? Am I missing something?
    - donkeyd 5y ago
      I was doing the opposite of the previous commenter. There's of course a lot of options in the middle. The previous commenter just presented it like it's easy to just become your own boss. My point was that it isn't and yours does the same, just in a less depressing fashion.
tarsinge 5y ago
Selling your time for money being self employed is the first step, and dealing with horrible clients is a prerequisite to acquire the experience to learn to choose clients and manage their expectations. Like you I had an idealized notion of self-employment, but I pushed through it and don't regret it. It's two sides of the same coin because in the end you work for customers, but at least being self-employed you have to deal with 0 office politics and organization accidental complexity, you carry directly the value to the client with the tools you want, being fully responsible. You have freedom and flexibility because in the end you make the proposition that suits you. But it's definitely not easy at first.
MisterBastahrd 5y ago
I decided long ago that for me to be fully self employed, I would either need to make 3x my current salary or have no other immediate options. Currently the only consulting I do is via retainers to mid-sized businesses, where I average 5 hours of work a month, get paid for 10, and occasionally go over when necessary. I am not immediately on call for anything and my clients are aware that I have a day job that takes precedent. My rate for any additional clients is also much higher than my rate for existing clients. It's what my extra free time is worth to me.
moltar 5y ago
I would generally agree with you, except: - as a self employed person you can pick your clients, if you are good - self employment often can be a path to something where you stop trading time for money. But it takes time to figure this out. As always there are trade offs to everything.

darig 5y ago

You've got everything backwards... working for yourself is being in the business of selling the client something you promised them for money. Every decision was yours. Working for a corporation is being in the business of selling your time for money to the corporation who can do whatever they want with it.

ryandvm 5y ago

This is true. When you are a consultant or contractor, you still have assess to kiss and jerks to take orders from. You actually have to work a lot harder at keeping the folks in charge happy. And worse, they can fire you in two weeks instead of 6 months. The upsides are that A) you're hopefully making more money as a consultant and B) you at least get a change of asshole scenery every 18 months or so.

deleted 5y ago
[deleted]
laurent92 5y ago
C) Incentives are clearer. As an Asperger, dealing with corporate games and social games and the fakery of managing everyone’s mood is unbearable. Now founded a startup, the only job I have kept more than 2.5 years… and 8 in fact, and going strong. Either a customer is happy, or he isn’t because we don’t fulfill his need, and that’s easy to deal with for me.
unishark 5y ago
> And worse, they can fire you in two weeks instead of 6 months. In the US regular employees can be fired in two weeks most commonly, though big companies traditionally give a few months severance in good economic times. The upside of this is you can also walk away from a crappy job/boss/etc with two weeks notice. With contracting, you may be on the hook for the contract duration plus being pestered for support help forever.
- JBlue42 5y ago
  Umm...not quite. Most US states have at-will employment, so an employee can be fired for any reason, at any time, effective immediately. For an employee, the implied social contract is to give two weeks notice.
  - unishark 5y ago
    By "can" do it I mean are able to without burning bridges or feeling like you've betrayed people. A big difference from walking away from a small business you run, by contrast.
goatinaboat 5y ago
When you are a consultant or contractor, you still have assess to kiss and jerks to take orders from. You actually have to work a lot harder at keeping the folks in charge happy. And worse, they can fire you in two weeks instead of 6 months You can choose between the illusion of security or the illusion of freedom, that’s the choice

suyash 5y ago

another way of putting it would be that your new boss is/are your clients so yes it is another form fo employment in the guise of self employment. True freedom would be when you can take yourself out of the picture and still earn income.

pmorici 5y ago
Yes, the most obvious way is to save enough to live off income from your investments but I would also include building a product business where you sell the product and there isn’t a direct correlation between your hours and your income.
reasons 5y ago
> True freedom would be when you can take yourself out of the picture and still earn income In this case the "boss" is the cash cow and keeping it alive; also maintaining marketable skills incase the thing dies. Having too much time and money on your hands can also pose certain social and mental health challenges. It seems everyone has a job whether they like it or not.

acwan93 5y ago

I kinda wonder if there’s a growing number of people who recognize this, hence the emergence of the FIRE (Financial Independence, Retire Early) movement. Anecdotally I’ve noticed more of my friends having this same mindset that you’re having whether they’re entrepreneurs or corporate employees. It seems like the system is rigged no matter which way you look at it. The only option really is to amass enough fuck you money.

unishark 5y ago
> It seems like the system is rigged no matter which way you look at it. The only option really is to amass enough fuck you money. It's not actually rigged though. People just sell themselves short due to information asymmetries and a just plain crappy business model (work for hire). Customers see it as a risk so are reluctant to pay much, but it's your skillset so from your perspective there's actually little risk. Better to license technology but maintain ownership so you can sell it again to others. And now that the risk is gone, the hotter the technology the more you can ask for working technology you can demonstrate. Of course this isn't possible in all technology niches but I'd say your goal when self-employed should be to maneuver into areas where it is possible. Business is a game of avoiding being the commodity that others profit from by building into wealth. Work for hire is a commodity.
- PragmaticPulp 5y ago
  > Better to license technology but maintain ownership so you can sell it again to others. And now that the risk is gone, the hotter the technology the more you can ask for working technology you can demonstrate. Of course this isn't possible in all technology niches This is great in theory, but in practice it’s rare to develop something that can be passively licensed off. Usually it becomes a business that requires constant attention as it scales. I know a few people who have developed apps that sold well initially and looked like easy money, only to be buried under a flood of copycat apps as soon as the market realized the opportunity was there. The best success in cutting the cord seems to be building a company which is then sold off, but that’s hardly an easy path. This feels a bit like the “passive income” pipe dream that is frequently touted in FIRE forums but rarely comes with practical, real-world examples.

busterarm 5y ago

It's unfortunate that darig's reply to your comment is being so heavily downvoted that I can't reply to it because essentially they are correct. Most people only know how to sell their time, which is why most people are employees and many self-employed people have no free time. It's entirely possible to be self-employed and sell something that is not your time, or maximizes the investment of your time so that you can do something once and sell it more than once.

mixmastamyk 5y ago
You can click the time of the post, then vouch, another might help bring it back from the dead.
- busterarm 5y ago
  Indeed, I did vouch.
captainmuon 5y ago
How do you sell something that is not your time? Money is just crystallized work time. If you don't sell your time, you got to... sell other's time (by having employees)? The idea of making something once and selling it multiple times (like software) is nice, but the way I understand the market works is that competition will push down the price so much that even with your one time work investment, you'll only get the "average" rate in the end. So that means, find a niche where there is no competition yet?
- ido 5y ago
  Your notion of competition in the free market is sorta like the frictionless spherical horse in the physics joke. A successful product will produce more profit than your hourly rate.
  - captainmuon 5y ago
    Yeah, of course it is idealized. You know the joke: two economists are walking down the street. One sees a $50 bill on the sidewalk and says to the other: "Did you see that $50 bill on the ground?" - "Can't be, if it was there someone would have picked it up!" Long term I think it is true, though. If you don't have any unique advantage, competition will drive down your revenue to "market" rate. But that's kind of idealized equlibrium, of course there are successful products, innovations, and so on.

deleted 5y ago

[deleted]

snow_mac 5y ago

How are you no longer trading your time for money?

throwawayffffas 5y ago
There are two known ways to do that, a) Sell things instead of your time. b) Sell other peoples time.

jasonkester 5y ago

Odd that this article (and this comment on it) use a definition of “self employed” that still involves having an Employer. I’ve always considered the term to mean running your own product business. I certainly never used it to describe my consulting work. The author’s points all hold up, but it would make more sense to change the title so that it was cleat that it was comparing W-2 salaried positions to 1099 contracts.

fouc 5y ago
Self-employed is usually synonymous with a contractor, someone that's working for clients and typically trading time for money. A business owner on the other hand would be a more apt description for someone that is running their own product business or running a services business where they have employees or outsource the service work.
biztos 5y ago
In the US it's a common term for what the IRS calls you, regardless of what you actually do. Own an S-Corp selling toothpaste? You are self-employed. Have a sole proprietorship mowing lawns? You are self-employed. Have a C-Corp mowing lawns? You are an employee! But then your corporation has to pay taxes too.

buildingmateri 5y ago

Solution is kind of straightforward: Work said 100k job for 5 or 7 years, perhaps with safe investments e.g. the S&P, get 200k+ to your name. Use that to then support years of establishing your own business, own terms, own freedom.

donkeyd 5y ago
Have the business fail after putting all of your money in it, lose house, lose self-respect, burn out, go back to working for 100k a year (or less because you have nothing to show for the last couple of years). Everyone always assumes that if you work hard, you will succeed... It's the American dream. But it's far from the truth for many people who try this type of stuff. Most small business owners end up working 70+ hour weeks for maybe a bit more than the 100k some people might get working for an employer, with the added weight of having to run a business and losing everything if it fails.
- filipo 5y ago
  How to limit the danger of losing everything if it fails? Isn‘t that just the issue if you invest everything you have or stop too late (kill the business early enough if it does not work)? Am I missing something?
  - donkeyd 5y ago
    I was doing the opposite of the previous commenter. There's of course a lot of options in the middle. The previous commenter just presented it like it's easy to just become your own boss. My point was that it isn't and yours does the same, just in a less depressing fashion.

tarsinge 5y ago

Selling your time for money being self employed is the first step, and dealing with horrible clients is a prerequisite to acquire the experience to learn to choose clients and manage their expectations. Like you I had an idealized notion of self-employment, but I pushed through it and don't regret it. It's two sides of the same coin because in the end you work for customers, but at least being self-employed you have to deal with 0 office politics and organization accidental complexity, you carry directly the value to the client with the tools you want, being fully responsible. You have freedom and flexibility because in the end you make the proposition that suits you. But it's definitely not easy at first.

MisterBastahrd 5y ago

I decided long ago that for me to be fully self employed, I would either need to make 3x my current salary or have no other immediate options. Currently the only consulting I do is via retainers to mid-sized businesses, where I average 5 hours of work a month, get paid for 10, and occasionally go over when necessary. I am not immediately on call for anything and my clients are aware that I have a day job that takes precedent. My rate for any additional clients is also much higher than my rate for existing clients. It's what my extra free time is worth to me.

moltar 5y ago

I would generally agree with you, except: - as a self employed person you can pick your clients, if you are good - self employment often can be a path to something where you stop trading time for money. But it takes time to figure this out. As always there are trade offs to everything.