In my last post in this series, I compared and contrasted the income and tax situation of working for the man versus working for yourself. After adding up the benefits and tax effects (and not counting additional tax breaks that your business may be eligible for), the main effect was mostly a wash. Yes, self-employed people have to cover their own benefits, and yes, self-employed people get smacked with the pension contribution twice. Even then, there was not a big difference in net income at the end of the day.
There is, of course, more to it than that. In this post I’ll take a look at some of the other, more intangible benefits that we both lose and gain, when we decide to follow the more solitary path of working for ourselves.
This is very circumstantial and will depend on the sort of place you work at. For me, there were both positives and negatives. I got along well with all of my coworkers and my boss (who as of the time of this writing has also left the company), my desk was comfortable and has a lot of space, and the working environment was decent. I have had a mix of good working spaces and less-than-ideal working spaces, and while this one wasn’t the best, it was fine. It was an open concept with some desks facing each other at a 45 degree angle, so I didn’t quite like having to look at someone else’s head the whole day, but other than that it was good.
Aspects to a corporate working environment
+ Social interaction
+ Free coffee
+ Environment designed for work
– Fluorescent lighting
– (for some) hostile coworkers / bosses
– Noise & chatter
I had been at my company for seven years before I decided to take the leap of faith. Some of those years were while I was still completing my university degree, so there was a lot of history there. I know that trying to take the leap right out of school would have been a mistake, since I would not have had any real working experience. Taking it 1 or 2 years after graduation would also have been a mistake, since things were still progressing rapidly, I was advancing quickly, and I was still learning a lot.
When did it finally become the right choice for me? When the company stalled, projects dried up, and I felt I was experienced enough in terms of skills and abilities to go for it, I asked myself the following questions:
Where could I be in the next two-three years if I continue to work for this company, or if I change jobs and continue my career at a different company?
Where could I be in the same timeframe if I decide to work for myself?
I felt that the best move for my career at that point would to be take the leap of faith, and differentiate myself far more than had I just continued as a software developer at some other company.
A question often asked of people in the corporate world is if they are a leader, or a soldier. Call me an outsider, but I prefer to be neither. I don’t have an innate desire for telling other people what to do, and neither do I just want to do what other people tell me what to do. I’d rather be a collaborator, and that’s not always possible within a hierarchical structure. It’s only within the free-er markets outside of the hierarchy that you can actually collaborate, rather than simply leading or following.
Aspects to a corporate career path
+ More clearly delineated — the path is marked, and the steps to get there are known.
+ The corporate world can be the best environment for making rapid and early gains.
+ Economies of scale and coordination benefits mean that your skills can sometimes be leveraged more effectively within the corporate structure.
– Seniority blocks progress — jumping ship may be required.
– Others directly decide your progress and advancement.
– Gains taper off after some time. Do you want to be in the same spot in your 40s?
The biggest differences between working for the man and working for yourself has to come down to the lifestyle. Again, this will really depend on the sort of place you work at, so I will draw from my own personal experiences. Your mileage may vary. 🙂
The biggest benefit to me of working for myself is that I can work from home, at the library, at the cafe… wherever I choose. I set my own hours and working schedule. The problem is… this benefit can also be a drawback. At my job, all I had to worry about was getting my work done. Others were responsible for deciding what I worked on, what my schedules and deadlines should be, and how I should get there. Now, I need to decide all of that on my own. If I don’t manage my time effectively, I’m the one that ultimately suffers in the end. I don’t feel well and want to take a sick day? I’ll have to eat that cost. You bear both all of the costs and all of the benefits when you decide to work for yourself.
Aspects to the corporate lifestyle
+ Compartmentalized: Your office is for work, and your home is for playing around and relaxing.
+ Get paid for doing your work, and enjoy some insulation from the free-market realities of customer payment delays, losses, and lawsuits.
+ If everyone else is putting in 60%, you can put in 80%, look good, and still spend some time goofing off every day.
– Rigid work schedule and vacation time.
– Rush-hour commuting.
– Do you really want to spend your time goofing off when you could be working on your own projects?
I don’t think the grass is greener on either side of the fence; rather, I think that there are pros and cons to both. However, I do believe that true freedom is only found in working for yourself or within a company/partnership at a certain level. Whether that is important to you will depend on your life circumstances and what you are aiming for.
Dear reader, what are your own personal advantages and disadvantages to working for the man? Would love to hear them. 🙂