But if that paycheck is your only source of income, you could lose 100% of your earnings at any time for reasons far outside your control.
We’ve already seen it happen to hundreds of thousands of skilled, talented workers who believed they had a high amount of job security when the Great Recession hit. Companies had to shed costs – and that started with laying off employees or even shutting down entire departments.
As an employee, you’re at the mercy of what someone else wants for their business. Sure, you can work hard, make yourself a valuable asset, and become a cog in the machine that would be extremely hard to replace.
But at the end of the day, your boss — or the higher-ups in the company, or those that run the business — may decide that it’s best for future growth to downsize, outsource, or reorganize.
So it’s a gamble when you’re working for someone else without any other income sources. Because you can be fired or laid off at any time, your downside is unlimited. 100% of your income is always at risk.
How can employees fix this problem?
How Can Employees Safeguard Against an “Unlimited Downside”?
The solution is actually quite simple. Employees can choose the new form of job security that will prevent a 100% income loss. That security is in the form of entrepreneurship.
Traditionally, starting up your own work as a business or just something on the side has been considered extremely risky. Working for someone else was the safe bet. But times have changed and this is no longer the case. Millennials, those in their twenties and thirties, are likely to change jobs every 1 to 5 years throughout their careers. And pensions? Forget about it. Companies simply don’t value career-long loyalty anymore, and offer no incentive to retain good employees over a 30-year working life.
The best part of all this? Entrepreneurship, full-time or part-time, also comes with an unlimited upside.
Why Entrepreneurship Offers an Unlimited Upside
Theoretically, your earnings potential when you work for yourself is unlimited. This is largely because you’ll likely stop trading time (which is limited) for money in the same way you do to earn a paycheck as an employee. The more value you provide via goods or services, the more others will pay for what you’ve offered.
As an entrepreneur, or someone who has a side hustle that provides various income streams in addition to a regular paycheck, you have more control over your career, your income, and your future.
And sure, you could always lose a client, a few customers, or a side gig. But that’s only one piece of a diverse puzzle that you built for yourself. Losing a job as an entrepreneur or side hustler means losing a percentage of income rather than everything.
But don’t forget, money, while important, isn’t everything. As an entrepreneur or someone with various income streams via side gigs, you have freedom, flexibility, and fulfillment in the work that you’re doing for yourself. That counts for a lot.
As a recent Inc. article explained, working for yourself in some form or fashion is the only way in today’s world to get really, really rich. It’s the only thing that offers the unlimited upside.
And why not give it a try and avoid facing that unlimited downside that comes with the territory when you gamble and only earn an income via one source, working for someone else’s business?
Starting up a side hustle is relatively easy and doesn’t require advanced degrees or expensive training. Creating a digital business can be done with an incredibly small investment of a few hundred bucks (and some entrepreneurs bootstrap for a while on even smaller expenses). It only requires your passion, dedication, and time.
Not a bad trade-off for all the perks, benefits, and of course, that unlimited upside.
What path will you choose? Will you choose the unlimited upside?
Track All Your Accounts With Personal CapitalPersonal Capital lets you see all of your accounts in one convenient place. Sign up now for free.
Latest posts by Mr. 4HWD (see all)
- The Benefits of a Work From Home Side Hustle - December 16, 2014
- How to Balance Your Side Hustle, Full-time Job, and the Holidays - December 9, 2014
- 4 Tips to Overcome Fear and Doubt - December 2, 2014