Want Financial Independence? A 9-5 Job May Be Better than Entrepreneurship

There are many reasons for this, one being the fact that many of these writers are inherently biased against 9-5 jobs. They themselves likely want to be a solopreneur, creating content and making money through ad campaigns and selling digital products. Naturally their content ends up being opposed to 9-5 jobs as a path to financial independence.

I myself have a deep desire to create sustainable side income streams that can replace my 9-5 job, but I’ve recognized that not everyone wants this or would ever seriously pursue it. For our economy to work properly there will always be a need for employees who work a job for set pay.

It’s now been nine years since I interned at my employer, and more than eight years since I started working full-time. Throughout that period of time being a corporate employee I’ve realized just how valuable a consistent 9-5 job can be for the average person who desires financial independence. In fact, a large majority of people would be much better off sticking to a 9-5 than ditching it for entrepreneurship, if their primary objective is to achieve financial independence.

To support this argument we’ll first look at the benefits of a 9-5 job in the context of financial independence, then we’ll go over why sticking with a 9-5 doesn’t have to kill your entrepreneurial spirit.

How a 9-5 Job Can Set You Up for Financial Independence

 
Let’s get past the “duh” aspect of this: making money obviously helps with pursuing financial independence. But what we are diving into here is a 9-5 versus entrepreneurship, and why a 9-5 make so much sense.

The drawbacks to a 9-5 are somewhat obvious:

• Your Pay is Capped – Most 9-5 jobs do not come with sales commissions or a variable component (outside of a potential year-end bonus). So your pay is set, and sometimes that pay has little to do with how hard you work or how productive you are.

• Little Flexibility in When You Work – With most 9-5 jobs it really doesn’t matter when you are most productive, or what schedule makes the most sense for you; your hours are more or less set. If you want time away from work, you have to use a limited number of paid days off.

• Work Environment May Not Be Ideal – Some jobs require you to physically be present, such as if it involves delivering care to someone. But even with a majority of corporate jobs, there is little flexibility in where you do your work. Open offices and tiny cubicles with a ton of distractions are commonplace.

The appeal of entrepreneurship is control. Control over what work you do, when you work, and who you work with. A 9-5 rarely offers anything close to that flexibility.

But if our primary focus is financial independence, a 9-5 job will trump entrepreneurship for most people. A few high level reasons why:

• Consistent Income – Having a “ceiling” on your income is a negative of a 9-5, but the trade-off is the consistency of your income. Most people will be able to better manage their income if they have a regular, consistent, paycheck. They know how much they make, so all they need to do is manage their expenses so that they have positive cash flow. The next step is to have that positive cash flow automatically flow into investment accounts. Rinse and repeat. This is the simple path to financial stability and ultimately financial independence.

• Benefits – The benefits of being a “regular employee” are huge. It starts with health insurance. The reason why plans are so expensive on the individual exchanges is that employees pay a large chunk of health insurance costs, with some estimates being around $10k per employee. That burden falls entirely on the individual once you cut an employer out of hte equation. This is hardly the only benefit, though, as paid time off, paid parental leave, employee stock purchase plans, annual bonuses, and more must be factored in. Check out 13 employee benefits you should be taking advantage of.

These two components of a 9-5 job are what will help people start down – and stay on – the path to financial independence. Entrepreneurship is difficult, and the chances of failure are high. Many would struggle with the variable income component of entrepreneurship and would be better off sticking with a consistent income and putting their wealth creation on auto-drive. Automating good decisions like regular deposits into retirement accounts is what will help most people reach financial independence.

With all this being said, entrepreneurship clearly has potential for huge upside. Whether it’s creating a company that provides you with much greater income than your 9-5 ever paid you or the option of selling your company for a large lump sum, there is a reason people are attracted to entrepreneurship when thinking about financial independence. But it certainly is not the only way to hit financial independence, and I would argue it’s not the best way.

A big reason there is an obsession with aligning entrepreneurship with financial independence is the lifestyle design aspect of entrepreneurship, not necessarily the financial benefit.

9-5 jobs are very much an outdated model of labor, and most people are not entirely happy with the setup of commuting to an office just to sit in a cubicle where they attend virtual meetings. If someone works better at 9pm to midnight than they do at 2pm to 5pm, and their work can be done at any time of the day, there should be more latitude for that employee to decide when they work. While employers are (very) slowly embracing some flexible arrangements, it’s not fast enough to satisfy most people. Cue entrepreneurship, which promises a lifestyle of working when you want, where you want, and how you want.

With the current economy employees have gained a little more leverage to help push the transition to a 21st century work setup. It’s becoming more and more difficult for employers to retain employees, partially because there aren’t enough skilled workers and more are opting for entrepreneurship or freelance.

All this leads to the fact that if you can stick out a job that you don’t love but don’t hate, you can benefit financially in higher, consistent pay, as well as slowly negotiate a more flexible arrangement. And if you can’t get the pay and lifestyle you want (i.e. work from home part-time or full-time), there are likely companies that will accommodate you.

While I am advocating for sticking with a 9-5, I’m still an advocate of entrepreneurship. But what I advocate is for working on entrepreneurial endeavors in your spare time. If you do decide to leave your employer and pursue your business full-time, I think the longer you can put it off the better.

A 9-5 Doesn’t Have to Kill Your Entrepreneurial Spirit

 
I’m not clueless: I know many people dream of quitting their 9-5 to work for themselves. I’d be lying if I wasn’t one of them.

But I think there is huge value in working on your entrepreneurial endeavors on the side and putting off full-time entrepreneurship as long as possible. Side hustles are absolutely the way to go, for so many reasons:

• Test Ideas with Little Risk – When you pursue an entrepreneurial idea while working full-time, you have the benefit of testing your idea without giving up your consistent 9-5 income. Many business ideas fail or have a flaw, and it’s much easier to correct course when your livelihood isn’t at risk.

• Forces You to Optimize – I sometimes think that people who leave a 9-5 to work their business full-time don’t actually end up putting much more effort into their business than when they were working full-time. What I mean by that is when you have a 9-5 and a business you have to use the time spent on your business in the most optimal way possible, because your time is so limited. You potentially lose some of that discipline when you leave your 9-5 to work a business full-time.

• Less Pressure to Regularly Pull in Profits – One of the benefits I have personally seen from running my business as a side hustle is that I don’t have to compromise. Yes, the goal is to make a regular income, but I’m not so desperate that I will work with advertisers or companies that I don’t align with. I also have the ability to reinvest revenue back into the business, which I wouldn’t be able to do as extensively if my livelihood was dependent on that income.

Many people ask me why I don’t speak, write, and sell digital products full-time. I’m not opposed to leaving my 9-5 job if my business hit an inflection point, but from a financial independence standpoint I am benefiting greatly from keeping my 9-5. I want to grow both my career (and financial benefits from it) while also growing income streams outside of my 9-5. Not only does this help protect me if I involuntarily lose my job and/or the economy hits a recession, but it also provides me the highest possible cash flow as I work towards financial independence.

My general advice is this: keep your 9-5, but also pursue entrepreneurship through an entrepreneurial-focused side hustle. Over time scale your entrepreneurial income stream while optimizing the time you put into it, whether that means leveraging contractors and freelancers or changing your business model to something more scalable.

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