Working For a Paycheck vs Working For Yourself

What are the advantages and disadvantages of working for yourself vs working for a paycheck. Money, lifestyle, freedom.

There are basically only two types of jobs in the world. You either work for someone else or you work for yourself.

Let’s talk about some of the advantages and disadvantages of each.

Working for a paycheck

Working for someone can be a great job or not so great job. The problem is which one it is, is mostly out of your hands.

But overall, there is absolutely nothing wrong with working for a paycheck.

I think that everyone needs to do this once in their life. If for no other reason to have built up some character and work ethic. By having to get up commute, be at the office nine to six, get a set amount of work done, deal with a boss. It’s something we should all experience.

But maybe just for a few years and not a lifetime.

I did this myself. I probably did it too long, but I have no regrets. I can now grind out eighty-hour weeks like it’s nobody’s business. I credit my audit busy seasons working to midnight six days a week for that.

I remember complaining to my Dad during my first busy season. He insisted, it couldn’t be that bad. I countered with I’m working 80 hour weeks and haven’t seen the sun in a month. His response, “good, now you know what you’re capable of, that will be useful in the future.”

Working for yourself

Working for yourself can also be great or not so great. You probably expected me to say unlike working for a paycheck you can decide this yourself.

But nope.

Sure, you have a strong influence on the outcomes in this job. After all, you are the only one impacting the work product. But there is also a lot of luck. Luck being in the right place at the right time, or we should probably change that saying these days to on the right platform at the right time. As well as luck in connections, algorithms and whatever weird, wonderful (or terrible) magical forces are behind going viral.

But yep, mostly, you are the one deciding factor. If you work hard enough and persevere for long enough you will succeed. And once you do you will be able to set all the rules. What you work on, how much or little you work and even what type of coffee is in the break room.

Money

Working for a paycheck

The benefits of working for someone else are pretty sweet. The biggest one inarguably being, you never need to worry about getting paid.

You get paid regularly; you have a steady stream of income coming in. Your salary is divided up nicely. You get the same amount every month. Which is nice, because your rent, car payment, utilities are also due every month in pretty much the same amount.

This makes figuring out what you can afford easier.

A drawback to this is this can very easily lead to living paycheck to paycheck. When you have the security of your paycheck and that a next one is coming it makes it easier to spend it all.

Another drawback. The biggest of all drawbacks to the work for a paycheck route, is that you cannot influence what you make. Sure, you can be an outstanding performer and get a ten percent raise vs a cost-of-living adjustment. But you cannot double, triple, 10x or more your income like you can if you work for yourself.

Working for yourself

Money can be much harder to come by early on, yet much less of something you have to worry about after you’ve been grinding for a while.

Here, you don’t have the security of knowing a paycheck is coming. You have to figure out how to make that happen for yourself.

That can be scary if you must pay the rent.

But once you do figure it out then it is all in your control. If you can figure out how to make $1. You can figure out how to multiply that by 10x. Then multiply that by 10x. Then… well you get the point.

It’s all up to you. Your talent, your work ethic, your ingenuity, your grind. You get to decide what you get paid.

Don’t get me wrong, in the beginning it’s going to be rough. Mostly, it’s the not knowing when. When will I start succeeding? Will I be homeless by then?

But if you can get past that it’s worth it. And this is where building that side hustle, while still working, to the point where you can see it succeeding makes sense.

Lifestyle

Working for a paycheck

One major advantage of working for a paycheck, is the community that comes with it. Your coworkers you spend a ton of time with (at least in the pre-2020 world, and hopefully we get back there). These can be some of your best friends and if you are a social person. You may prefer working for a paycheck solely for this reason.

A major disadvantage can be that very same thing. Sometimes your coworkers are less than desirable and that social interaction comes with the disadvantages of gossiping, office politics, games that need to be played to get anything done.

Then of course, there’s the commuting, having to be at a set place every day, having a boss etc.

The boss. That’s a big one obviously. At various times in my career, I had great bosses and horrible bosses. It’s the luck of the draw. But it can definitely be the deal maker or deal breaker.

Working for yourself

Working at home in your pajamas of course is number one. Or working from anywhere really. And not only that working the hours you set.

Of course, the motivation to get the work done is a hundred percent internal. If you cannot make yourself do the work, then nobody else will. This is exactly why I think most everyone should work for someone else first. It helps you build up that work routine and work ethic.

It’s also, a little harder making friends without having the built-in relationships that come with the workplace. You may need to work a little harder to find those groups of people to hang out with.

So, which one should you go with. Well really only you know yourself well enough to figure that out. But for my own two cents. I think you should start with one and then move to the other when you’re ready. I talked about why in this article.

Finance professional with a passion for reading, writing, history, economics and the world.

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