When you hang out in the personal finance blogosphere, you never run out of articles to read about self-employment, passive income, and making money online. It seems that everyone is either earning a full-time living from home, quitting a job, contemplating quitting a job, or starting a new enterprise in hopes of striking it rich. After 4 years of economic turmoil, more and more people (not just bloggers) are desperate for a way to quit the rat race. And ever since I quit my job last December, I’ve become the sounding board for all the people in my life who long for a self-employed lifestyle.
I wish I could do what you do. Can you teach me?
I’d love to work from home, so I’m thinking about quitting my job like you did.
What do you think of this business idea? I could replace my salary easily with this, right?
Few people understand the awkward position I was in (and the total insane leap I took) when I left my career. I was NOT financially prepared. I wasn’t even dying to become self-employed. If I could have found another job in my field, there’s no way I would be self-employed right now. But a lot of things happened and I made the best decision I could at the time. Through some miracle – knock on wood – it has worked out so far and I’m very happy. That doesn’t mean everyone can (or should) work from home.
Working? Or Hanging Out?
A lot of the friends who are so eager to follow my lead don’t seem to realize that I actually do work. A LOT. Like 15+ hours a day, 7 days a week. People have this vision of me sitting down at the computer for an hour or two, cranking out a few blog posts and website logos, then spending the rest of the day lounging around. I’ve invited a few people to come sit at my house and watch what I really do all day, but for some reason none of them have taken me up on it.
Sure, there are a ton of advantages in working from home. I can wear my pajamas all day. I can work from my backyard or my sister’s house or any other location I choose. If I’m sick and need to lie down, I can do that without asking permission. But all of those advantages come with caveats.
- Working in pajamas: Some people have to get up and get dressed every morning, even at home, to be productive. Not me. But the disadvantage there is that I look like a bum all the time. Even when I bother getting dressed, I stick to jeans and t-shirts because decent clothes feel uncomfortable now.
- Working from anywhere: I could get in my car tomorrow and drive to the lake for a week. But would I actually get any work done while I was there? I doubt it. If I’m going somewhere fun, of course I want to enjoy it like anyone else! So I’m usually tethered to my desk if I’m actually working.
- Unlimited sick days: It’s great to take a nap when I’m sick or exhausted. But that also comes with the knowledge that I’m not getting paid while I’m sick or exhausted. Every hour I spend doing something else means I get to spend more than an hour making it up later.
People seem shocked that I work so many hours and take so little time off. But that’s because their idea of self-employment is an extended vacation. If I want to pay my bills, I have to work. And if I want to save money for the inevitable dry spells that come up, I have to keep working even after the bills are paid.
At some point, I’m sure my emergency fund will recover enough for me to feel comfortable taking breaks. Right now, though, I live in a state of complete paranoia where money is concerned. My income is more than adequate (knock on wood again), but I can never decide what to do when I get paid. Do I pay my bills ahead of time in case I don’t make any more money this month? Do I stock up on groceries now? Should I put this money in savings, or am I going to need it next week?
The Truth About Working From Home
Self-employment is great for a lot of reasons. I don’t blame anyone for wanting to escape a 9-5 and find opportunities to work from home – a lot of workplaces are toxic, or maybe your chosen career (like mine) is just a poor fit. But it’s important to realize that working from home is still working.
When you’re self-employed, you can’t always set certain hours (well you can, but you may not be able to stick to them). You can’t depend on a paycheck every two weeks. You may find yourself constantly revising your business strategy – or sometimes starting over nearly from scratch – as you learn what’s successful and what isn’t. You will work longer and harder than you’ve ever worked at a “real” job.
Working from home can give you lots more time to spend with your family. But it can also be difficult to actually find time to get work done. Someone is forever inviting you to lunch or asking you to drive Grandma to the doctor or dropping off their kids “just for an hour since you’re home during the day now.” You have to be assertive and set firm boundaries or you’ll never make a dime.
Oh, and I didn’t even mention the drama that comes with self-employment taxes and health insurance. But that’s a whole other post. Just know that there’s a reason people get to excited about benefits when they work for someone else – that’s probably the hardest thing to give up.
One More Thing
The most important consideration to make regarding self-employment isn’t about money or even the exact methods you’ll use to earn your living. The one thing you should spend time thinking about before any of that? Your personality and temperament.
Some people are simply not motivated enough to get up every day and spend a ton of time working. Some get bored without the social interaction that comes with a “real” job. Others need to know that a paycheck is coming on a set schedule with taxes already witheld and no surprises.
There’s nothing wrong with any of those qualities, but if you know you don’t work well independently (or if you can’t handle the uncertainty of “feast or famine” when it comes to income), working from home may not be the best choice for you. Despite what many people think, it’s far from easy, though self-employment can be a great experience if you’re adequately prepared.