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Is it better to work for an established employer or be self-employed?

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Employer
24% 401 votes Total: 1696 votes
Self
76% 1295 votes

Employer

by Gary Maclean

Created on: April 04, 2008   Last Updated: October 03, 2011

There is a lot of talk about working for yourself, starting your own business, benefits of a home business and other at home ventures. For the most part they seem to appear with a positive slant. I have been in both positions; working for someone else and working for myself. I agree; there are many benefits to be had working for yourself; however, there are many benefits when you work for an established organization also.

I seriously think every single worker in America ought to have the opportunity to work in their own home business at least for one year. I think we all need that experience. Were that to be possible we would all gain a certain respect for the people running the big businesses. At the least we would discover what they really pay when they employ us.

I like using the top ten list approach with discussions like this one. I first set about making my own list of items then I pick what I think to be the top ten and write about them. Well, for this topic my hand-written list surpassed 30 benefits. It was very difficult to stick to my top ten rule, but I did. Just remember though, working for yourself is indeed an experience not to forget, but you never know what that company you are working for really does for you until you venture out into the world of self-employment.

So many companies have so many different benefits, that I had to work from a "typical" company. I don't even know what is typical, but I have worked in ten different companies, so I averaged them out and present those top ten benefits. My choice for the top ten benefits of working for a typical first line employer includes;

10) Pre-tax deductions: Many employers today offer a process whereby they will deduct funds from your paycheck for things like medical co-pays, child care and other non-covered expenses. They deduct these funds before taxes are taken out. This makes the taxable amount smaller and your tax payment smaller. You could make $10 available for non-covered medical expenses and only drop your take home pay by $7.

9) 40 hours: Please don't ever think that working for yourself you will ever see a 40 hour week again. They are almost non-existent for those who work for themselves. The rewards are there but so are the labors. Working for a company you will work 40 hours and go home. If you work more, then you most often get paid overtime for it.

8) Steady check: When you work for yourself you are working in feast or famine. Working for someone else you know exactly what you will be getting and when you will get it. You have a pay check every other Friday without fail, or every Friday or twice a month. Doesn't matter when, you know it will be there. Not so if you are the boss of you.

7) Personal leave: Working for yourself you will certainly be able to take leave anytime you want but you won't get paid for it. When you are self-employed, if you don't work you don't get paid. Companies typically provide three days bereavement pay, three days wedding pay and several other possible packages. You get paid time off to do certain personal things.

6) Educational assistance: If you want to go to school you are going to pay for your own tuition. If you work for someone else they will most often pay from 50% up to 100% of all expenses related to your education. Go get that degree while you can!

5) Sick days: Separate from personal leave companies usually provide a set number of sick days; from a day per month up to one day a month. This can be 6 to twelve days a year. At $100 a day that is a clear $600 to $1200 benefit a year that your home based business will not be rewarding you with this year.

4) Retirement: There are many different retirement plans available from most every legitimate employer today. Some of them even offer two. They also offer matched contributions to some of the plans. That means if you put in 5% of your pay they will match your 5% to the dollar. Free money! That could result in up to $1000 a year or even more depending on the plan.

3) Vacation: Let's say you get two weeks vacation at the rate of $100 per day salary. That equals $1000 vacation pay a year, every year. Your very comfortable home based business will never pay you to be off work.

2) Holidays: Typically a company will have 13 paid holidays. I don't even have to list them, you know what they are. At our example rate of $100 a day that comes out to a $1300 a year benefit. I know when I had my own home based business I never got paid for any holiday. I took the holiday off but without pay because I didn't work. In fact. I didn't even have the choice to work; my clients all had the day off - with pay!

And the number one benefit of working for someone else?

1) Insurance: I purchased my own insurance for years. I paid $600 a month for myself and my wife. I since have met people who are paying as low as $500 but also as high as $850 per month. You simply cannot be without health insurance, especially if you have children. At $600 a month that's a $7200 a year benefit. Even if you end up paying 25% of the premium that still leaves $5400 a year the company is paying for you. Truly the one most expensive benefit from working for anybody is health insurance.

There are just so many more; catastrophe insurance, raises, company parties, mileage reimbursement, professional organization assistance and on and on. No doubt about it, being in business for yourself is truly a positive experience, I loved it. But working for someone else certainly has its benefits and we cannot forget that.

All told it is estimated that a typical company pays another 50% of an employee's salary in benefits. If you make the example $100 a day, you are really getting paid $150 a day. Don't let me stop you from taking that entrepreneurial leap but don't do it simply because you think your company doesn't do anything for you. Clearly, they do much more than we might think.

Learn more about this author, Gary Maclean.
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Self

by Ira Woodward

Created on: March 31, 2008

I don't think there is any clear cut answer to this question. Instead I think each individual needs to decide for him/herself based on an assessment of a variety of factors. These include a person's priorities, his or her needs, and his or her abilities. The other articles here will give you a general idea of the difference between working for a company and working for yourself. I will use myself as an example to show you how you might analyze this question and make a decision that's best for you.

For myself, I want my life to be about helping other people. I would like to paraphrase historian Howard Zinn, who said if you build houses, build them for the poor. If you tend the sick, tend to the poor. And as he has done, if you write history, write it about the poor. Also, I start from the assumption that, as Zinn said, "you can't be neutral on a moving train;" we live in an unequal world and those of us who benefit from that inequality such as myself are responsible for doing something to make the world a more equal and just place.

I think my goals can be met in many ways in a conventional job, for example as a teacher. After all, teachers are responsible for helping children grow up to be responsible and healthy adults, an incredibly important task. However, one has to consider the constraints on people in any conventional job. For example, these days teachers are limited by the demands of standard state curricula, the need to teach to standardized tests, enormous class sizes, the need to control students who often don't want to be in class, and the loads of paperwork associated with grading. For myself, these factors tend to make me shy away from this job, since I hate paper work and don't like telling other people what to do.

In any job one has to deal with a boss and usually an authoritarian political environment. I've always chafed against these kinds of limitations of my freedom. Also, one has to deal with a schedule and deadlines, and I find I'm more productive and happier when I have more control over when I do what tasks. I can pay attention to my moods and do things as my spirit moves me.

Finally, in my own case I have physical limitations; I have a low physical endurance for sitting and standing, and I also am physically weak and generally lack endurance. My voice is also damaged and I'm limited how much I can talk during the day. For these reasons, I need to be able to vary my activities and my posture throughout the day, and I need to avoid physically demanding work except in small doses. For all of these reasons, I have decided that a conventional 40 hour per week job is out of the question for me.

This has left me to think about how I'd like to live my life given that I won't be queuing up to join the rat race. One possibility is public assistance in my case. Although this is a fairly small income, I do like to live cheaply, shopping at garage sales and Goodwill, getting food from dumpsters, getting around by bicycle or bus, and living with other people to lower housing costs. These are lifestyle choices that allow for flexibility in that you need less money.

Still, I may not be able to depend on public assistance, and in any event some other source of income would be nice. For this reason I'm exploring writing from home, since I can do it lying down on my laptop. Other personal experiences have led me to a different idea for a lifestyle outside of the normal mold.

I am a victim of child abuse and have struggled for almost my entire life to free myself from the mental shackles generated by that experience. However, in my success at gaining my freedom, by forgiving my parents for what they did to me, I realized that I have tools which allow me to help others struggling with the same difficulties. I am very forgiving and willing to apologize, I'm very loyal, I'm hardcore, I know how to make people feel special, I can sympathize with victims of abuse, and I am good at reading people and listening to them. I also care a lot about other people.

I have thus cobbled together a vision: I can help to create an organization that caters to the needs of those who have inadequate resources to grow up on their own; victims of abuse and neglect who need the love and emotional support that will give them the strength to take responsibility for their own lives. If I involve other people in this plan, everything should work out. I need other people for a variety of reasons. One is financing; other people I know can donate some of their income to fund the project. Also I have weaknesses and limitations too. I need co-workers to compensate for these.

For example, I am gullible, I have trouble standing up for myself, I'm physically weak, I'm overwhelmed easily, I lack discipline, I'm inconsistent, I distrustful, I'm indecisive, and I'm a terrible procrastinator. So I need to find other people who can work with me in this project who have strengths that I don't share. Also, their contacts and connections would provide a larger base of potential donors to fund the effort.

This general vision and plan gives me something to work toward and helps me decide what to do in the here and now. For example, I'm exploring Helium.com as a source of income. Also, I'm planning to volunteer at a shelter that helps the people we call "mentally ill" (I don't like the term but I'll use it for lack of a better one.) This way I can gain skills in working with people who need help, and I can also gain contacts with others who might be interested in joining me in my long term project. I'm working on shoring up damaged relationships with other friends who could be potential allies in this project as well as in other areas of my life.

I hope this essay is useful for those dealing with the issue of how and why to choose a path in life. I would like to end by encouraging other people to share here their own personal journeys in tackling the question of how to finance lives lived the way they want. I think sharing such personal information is of benefit to us all in our own journeys (plus its fun to read!)

Learn more about this author, Ira Woodward.
Click here to send this author comments or questions.


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