How to Stop Being an Employee
Most employees think that when they work for a company, the reason they work there is because the company pays them a certain amount per month and they need that amount to pay their bills. This is only partly true.
In reality, the real reason employees continue to be employees is because of something I call the “Uncertainty Factor”. What does that mean? Well, basically what it means is that when you work for someone else, you make an agreement with them to exchange a certain amount of value for a certain wage. However, in most cases it is not the wage that you’re truly going after but rather the CERTAINTY that you will get that wage.
For example, lets say that you are a top notch computer graphics artist. You have the ability to create amazing computer graphics that you know are valuable in the industry. You hear about freelancers getting paid top dollar for such work. However, you find yourself working at a “stable job” making a stable but not so exciting salary. Why? In the majority of cases, it is because you are addicted to the CERTAINTY of knowing that you’re going to get a steady paycheck at the end of the month. It’s not the size of the paycheck, but rather it’s stability. You’re addicted to guarantees.
Here is the main difference between an employee, and an entrepreneur.
Employee:
- INPUT (Do what you’re asked to do.)
- OUTPUT (You get a paycheck.)
Entrepreneur:
- INPUT (You follow your dream.)
- UNCERTAINTY
- OUTPUT (You get paid.)
Essentially, as an employee you just have to make sure you show up to work, do what you’re asked to do, and then collect a paycheck. As an entrepreneur, however, you have to first figure out what you want to do, then figure out how that’s going to make money, then do that thing, and then there is a level of uncertainty in the middle of whether it will work and whether the value you create will be converted to cash, and then there’s the output which is you getting paid.
That middle part, the uncertainty is what kills most people’s ambitions of being an entrepreneur. Everyone wants the “Employee” benefits inside the “Entrepreneur” model and it just doesn’t work that way. There are no guarantees.
Do you guys realize that when I started Blogging two years ago, I had absolutely no guarantees that I would ever make money doing this? Nobody offered me any kind of pay to Blog. Nobody told me that if I do A, B, C, D etc. that I would be guaranteed to make money. Nobody said this would work. In fact, most people say that this doesn’t work. Interent Marketing, just like any other entrepreneurial venture is full of risk. There are no guarantees.
So how the heck did I stick to this and kept at it, researching, tweaking, learning, studying and adjusting my strategy for over two years before ever making more than a few dollars a month? The reason I was able to do it is because I have a much higher tolerence for UNCERTAINTY than most people. Why? Because this isn’t my first venture. I’ve been running businesses since I left highschool. I’ve failed many times and each time I put a lot of work and in most cases money into my projects, only to see them “fail”. However, each time I did this I learned something, so I didn’t classify them as “failures” in my mind, I classified them as learning experiences.
If you want to ever stop being an employee and move into being in business for yourself, you need to start embracing uncertainty instead of avoiding or running away from it. I know it’s not easy, and I still do it as well to a degree in some parts of my life, but you need to start getting comfortable with it. You can start small and work your way up. You don’t need to “stake the farm” on a single business idea, but you need to start taking more risks. If you don’t have money, just start risking your time.
I think the reason most “employee minded” people won’t even try entrepreneurship is because they have no idea how much higher the payouts can be. Here’s what they think the formulas is:
Either be an employee and get this:
- Do what you’re asked to do.
- Get paid $40,000/year guaranteed.
or be an Entrepreneur and get this:
- Figure out what you need to do and do it.
- Uncertainty whether it will work.
- If it does work, you may make $40,000/year or maybe $45,000/year for doing same work as employee.
In reality, the Entrepreneur model is more like this:
- Figure out what you need to do and do it.
- Uncertainty whether it will work.
- If it doesn’t work, you either make $0, or you lose money and perhaps even bankrupt the business. If it works out poorly, you may make $20,000/year. If it works out average, you may make $60,000/year. If it works out nicely you might make $240,000/year. If it really works out of you, you may make $750,000 per MONTH or more.
I know that to most people figures like that are beyond the realm of possibility. Meaning, most “normal” people laugh if you were to even propose that they could make $750,000 per month or more. They just don’t believe it. However, entrepreneurs out there are doing this right now and they’re probably not any smarter than you are…they’re just more able to handle risk and uncertainty. There are also a whole bunch of entrepreneurs right now filing for bankruptcy. That’s the UNCERTAINTY that keeps people employed as employees working for someone else. They don’t want to take that kind of risk themselves so they offload that responsibility onto their boss who takes that risk on their behalf and in exchange ends up making a profit for providing such “security” to the employee.
I’m not saying this is good or bad. That’s just the way it is. I’ve been in situations before where I worked for businesses where I didn’t want to participate in sharing the risk with the owner of the business so I demanded a salary to work there. I’ve also been in situations where I traded in my salary for a pure performance based compensation structure. I’ve also been in the situations where I was the owner of a business where I took all the risk personally and removed that uncertainty for my employees. I’ve been in situations where I’ve had to borrow large sums of money (basically the size of a second mortgage) against my house personally, just so that I could have enough money to cover payroll for my employees who had no idea I had to do that in order to provide them that “secure” place of having no uncertainty.
When I see people making six or even seven figure incomes, I look at them and think “There’s someone who’s probably taken some big risks in life and is comfortable with uncertainty”, while most employee minded people are probably thinking “Man that dude is grossly overpaid… he doesn’t even do anything more than I do at work… I work way harder than that guy, why does he get to make so much money?!”
So, how do you stop being an employee? You need to develop the courage necessary to deal with uncertainty. You need to be able to start taking calculated risks, start believing in yourself and your ability to not only survive but to also thrive on your own. You need to start embracing uncertainty and become comfortable with making mistakes and failing a little bit in order to learn from your mistakes.
The payoffs if you succeed are huge, and the journey is much more exciting, but it’s not for everyone.
I’ve met Bloggers who make four times the yearly income of a police officer or a fireman. I’ve seen affiliate marketers with monthly revenues about three times the yearly salary of what the President of the United States gets paid.
So many people want to make this type of money as entrepreneurs, but they don’t want to risk anything. They want no uncertainty and everything to be guaranteed and handed to them on a silver platter.
I read this in a forum once. (Paraphrased)
“Person1: I want to make money as a Blogger. Like those $25k/m Bloggers out there. What’s the first step?”
“Person2: Figure out your name, go to GoDaddy.com and register a domain name.”
“Person1: Thanks! …. ….. oh wait, it says here I have to pay $9 for the domain name.”
“Person2: Yeah…so?”
“Person1: Oh…this costs money? What if it doesn’t work out? Nevermind then…”
See what I mean? No risk tolerence. No willingness to tolerate any uncertainty. You can go and return pop bottles to go make $9 to afford a domain, but most people are too lazy to do it. If you want to stop being an employee, then learn to tolerate some uncertainty grow some balls. Learn to handle some uncertainty and take some calculated risks. Or, if you don’t want to then just accept that you’re choosing to be an employee and that’s ok too. Go find something you enjoy doing for a decent wage and stop complaining about it.
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| 24 Comments
Good stuff. Ya need ballz!
Balls indeed. Very in depth and informative post Paul.
Old Rich – You want to be the president of the train company.
New Rich – You want to own the trains and company, and have other people run it for you.
Good Posting!
Very long and informative post. Sure gives me a lot to think about.
Being an entrepreneur, I’m obviously biased, but for anyone wondering if the uncertainty you have to deal with being an entrepreneur compared to the “security” you have as an employee is really worth it, I can say that in my life it’s been totally worth it.
The “security” you feel as an employee of knowing your next paycheck is “guaranteed” to be there is all an illusion anyways. There are no guarantees and no certainty in life…the only constant you can count on is that things are always changing. By learning to become comfortable with uncertainty, you develop security from that.
But hey, I also know that there are a lot of people out there that have a really tough time handling any kind of uncertainty and get completely anxious and stressed out when having to deal with any of that, so perhaps it is better that they stay employees and be happy with that, or just become a part-time entrepreneur and only invest in businesses that require very little risk.
If you do want to be a successful entrepreneur, look for ways to train yourself to handle uncertainty and you’ll be amazed at how many doors open up for you.
Paul,
Excellent points. Let me add that the only resource that you can rely on is the person in the mirror. You can’t have a socialistic attitude in a capitalistic society. Trading hours for a finite amount of dollars is nothing but candy coated socialism.
To quote Esther in their new book, “to put your happiness (or income) in the hands of others takes the “Power to create” away from yourself”.
You owe it to your higher self to be the best person you can be.
Ace
i’d love to hear people’s ideas of ‘ball growing’ excercises, little or big things you could do to develop more courage. I know these can be highly individualized depending on the fear, but there are geneeral ones, like, i don’t know, talking to a stranger or something. Any ideas for how to develop that courage with little steps, you know.
Hello Paul! What a great post. I just found your site today and it looks great. I can’t wait to read *everything*. And I’m from Vancouver – looks like we’re neighbors!
@Dorota: Welcome to the site! Hope you enjoy the content neighbour.
@patrick: Here’s a good one. Start a Blog and start sharing your ideas with the world.
By putting yourself out there you open yourself up to rejection which takes some ballz. Blogging can be a good stepping stone in developing your courage. If it’s too big of a step for now, start a Blog under a pseudonym.
@Ace Andres: Yup…what a great book that is eh? I’m still working through it… lots of goodies in there.
Hey Paul . i am coming . i love this post so much . that makes me find a glimmer of hope to be . to be myself . no need to an errand boy . i promised that i will be a successful man one day coming .
i like your attitude with positive ..do what you love do !!!!
Hi Paul,
A couple of qualifications.
Not all the wealthy are entrerpreneurs (or entrepreneurial). At a certain level of income it is possible to get guaranteed returns – not stratospheric but enough to keep most of us happy.
There are different kinds of risks. Eg I heard a concert promoter say, “Well, you may think it is a risk to book Bruce Springsteen . . . ” There is an all-or-nothing, this is my one shot, kind of risk. But there is also the spread-of-risk – out of these five/ten things one is pretty likely to pay off. And there are situations where the risk is getting good enough – such as sports.
Personally I don’t like risk much, but I’ve finally figured out that no one is going to pay me to do what I want to do. So no choice really.
Another inspiring post. I’ve said before that I am still in this trap, but each day I am increasing my tolerance to risk, or growing balls as you put it.
One point to make though is that it isn’t just our own personal risk we play with, its the risk of the people we provide for such as spouses and children – for me – those are the people I have to consider the risk for. If it was just me, I would live out of a cardboard box for a while if it meant that I learned from each venture and followed my dream!
Awesome! I love to see posts about leaving the old 9 to 5.
I couldn’t have said it better myself!
This post is an invasion of my mind. Entrepreneurship vs. Employment is synonymous with Freedom vs Slavery. I’ll take that risk any day.
GREAT POST.
Talk to you soon,
T
@ T Edwards – Abraham Maslow said it best:”Life is an ongoing
process of choosing between safety (out of fear and need for defense)
and risk (for the sake of progress and growth). Make the growth choice a
dozen times a day.”
Excellent stuff as always, Paul.
I liked this post.
Good work.
Hi Paul – I’m new here and write about The Science of Getting Rich, Wallace Wattles.
I just met Yaro Starak last night at the Toronto Meetup. He mentioned your name, so I’ve dropped by to see what you’re up to.
What you call UNCERTAINTY, Bob Proctor calls the Terror Factor. I think we all have to move through it at some point to continue our growth, financially and in other areas as well.
Btw, I just quit my job which may be why I’m here. Like attracts like.
@Stephen Martile: Hi Stephen, and welcome to the site!
It puts a big smile on my face to know I’m now getting word of mouth advertising from Yaro, seeing as he’s been one of my mentors in Blogging! Thanks Yaro!
The Science of Getting Rich is on my Top 10 Books I own, (actually in the top 3), and that says a lot considering I have a library of almost 1,000 personal development books. THat book completely changed my life back in 2002 when I first read it.
I’m also a big believer in the Law of Attraction, and it’s good to see we attracted each other into our lives. I actually used to live in the Toronto area for a few years in Kitchener and Mississauga.
Once again, welcome to the site.
Paul,
What a small world. I saw your US address and didn’t think twice. I just assumed you had never been to Canada. It’s great to meet you.
@Stephen Martile: I’m a Canadian. I live in Canada right now too…not sure where you saw the US Address.
[...] Piotrowski had a great post on Inspired Money Maker about the one thing that keeps most people from quitting the day job – Uncertainty. He hit the nail [...]