If you took a poll in this space, the personal finance/FIRE/retirement/investing/frugality space about what kind of job is the best kind to have, I think I could predict the results. Near the top would be entrepreneurship, which would include owning your own business, free lancing, rental real estate, blogging, YouTube personality, influencer, etc. Near the bottom would be corporate 9 to 5 cubicle dwelling drone. Makes sense doesn’t it? What thoughts fill your dreams when it comes to ideal work? Autonomy, control of your time, purpose, a share of the profits instead of a pittance doled out by a heartless megacorp. How could you ever become the next Bill Gates, Elon Musk or Steve Jobs working in a cubicle doing soul sucking drudge work? But out on your own, making your own rules? The sky is the limit!
I truly get that concept, even though I worked for over thirty years for the same large corporation. But I also have had the privilege of having close friends who owned their own businesses, some quite successful. These weren’t just passing acquaintances but people I’ve been real with, ran marathons with, gone on road trips with and lived life with. So I do have an opinion informed by years of dialogue and observation, about the two ends of the employment scale. An opinion based on actual life experiences and conversations.
When it comes to the corporate 9 to 5, I know it well. For over three decades, starting as summer intern and ending up as the head Fred, you could say I’ve seen it all. I’ve seen some of my peers who languished in that world, they literally dreaded work and lived for the weekend. They had topped out early in their career and were just treading water until they could retire and start living. To me they had sad lives. They were poster children for what is wrong with the rat race. But there were others, ones who had great starts and made it up to middle management, then either from lack of talent or the skewed perception of senior management, just did not have what it takes to keep moving up in the organization. They were making good six figure paychecks but they also were working crazy long hours, were always on call and the constant stress of a demanding job with no future rewards in sight was beating them down. Most of them made it to retirement but sadly some of those did not live to enjoy a long life of leisure and purpose. Whether their early demise was the legacy of work frustration and stress is impossible to know. But I’ve had one widow look me in the eye and tell me my former employer killed her husband.
And then there was another path for a smaller number of fortunate people. I was one of those. Those annoying types that look forward to going into work on Monday mornings because it is one of their most exciting and fulfilling hobbies. Yes, that was me. And I can explain what made work such a kick. I was a nerdy brainy kid in school, and smart teachers and parents guided me toward a career that rewarded those traits, chemical engineering. In college I found I had a knack for understanding how the different disciplines of engineering fit together to solve real world problems. But it was the work world that lit my fuse and unlocked my potential. I had always been intensely competitive but had never had an arena to compete in that suited my talents, until I found it in the work world where I was competing with other young engineers. I had finally found my game, and I loved it! I was given raises, promotions and accolades and just kept moving up the ladder until my pay and responsibilities exceeded my most wishful dreams.
So from my experience the corporate life was not a great one for many but could be incredible for a few. But what about the life of an entrepreneur? Most of my career wasn’t spent in the internet age. I had no experience with my friends being internet influencers or YouTube personalities. They were not life coaches or online marketers. My entrepreneurial friends were people who ran brick and mortar service businesses The three that came to mind were Tom, Chip and Bill, three friends who took the path of running their own companies.
Tom has a trucking business, and it’s a pretty significant operation. He has a lot of employees, truck drivers, office clerical, dispatchers, bookkeepers and maintenance personnel. He operates in multiple cities. He probably has several million invested in tractors and trailers, buildings and equipment. He lives in a very nice house, and like me, his kids are mostly grown and gone. What I’m really trying to compare here is not our actual jobs but the quality of our lives and how our work impacts that. Tom is in total control of his business, he answers to nobody, no boss and no board of directors. He should be stress free, right? I’ve spent a lot of time with Tom, he’s a warm and caring person, a devoted father and has a net worth similar to mine. So he’s wealthy, healthy and in total control of his life. Surely that is way better than being a corporate 9 to 5 indentured servant, right? But no, I don’t think it is. While I always expressed joy in relation to how I felt about my job, Tom usually expresses some level of anxiety. While I was always assured I’d get my six figure compensation no matter how our company performed Tom was always worried about how to keep his company profitable in a very complex world full of risk. He still is even though he’s reached the age I retired. If my company failed or fell out of love with me I could get another job and a raise inside a week. If Tom’s business fails it takes most of his financial stability with it. In fact Tom has been actively trying to sell his operation for years and has not been successful. His kids have no interest in working with him or taking the business over and his competitors would rather see him go under than take over his fleet. And finally while I was able to walk off into an enjoyable and fulfilling retirement on my sixtieth birthday Tom has no exit strategy at all unless he can find someone to buy him out. In short I would never trade my corporate career for Tom’s entrepreneurial one.
Another friend is named Chip. He started up his own service business that serves both residential and commercial customers. He ran it for twenty-five years and then sold it to a national chain for what sounded like a large amount at the time. But for most of the time I’ve known him he owned and ran the business. Chip never seemed to worry as much as Tom but he still felt the constant pressure of competition while running the business. Unlike trucking, the barrier to entry for Chip’s business is fairly low so there were a lot of solo owner/operator competitors driving the price down for his services. Also there was competition from a household name national brand that has a near monopoly nationwide. He did find an exit strategy but now, as an early retired guy who needs a little more money, he doesn’t have an easy way to find good paying part time work. His expertise as a small business owner operator is not very marketable. As a former corporate guy, by comparison, I’ve been able to earn close to $100K every year for the five years I’ve been retired, only working about 8 hours a week. He is currently working nearly forty hours a week in retirement to supplement his investment income. While he successfully executed his exit strategy he came out with less than he feels he now needs. Personally I see his stress level as much higher than mine and much of it has to do with his former life as a small business owner.
Finally there is Bill. Bill worked for others in a couple of jobs but he knew early on he wanted to be his own boss. So he got into a variety of construction and outdoor service industries and later took on commercial and rental real estate. I’d guess Bill is worth at least five times what I am…or maybe he’s on the verge of being broke? Its not clear because Bill has reinvested every cent he has made over the last thirty years and has also used debt to fuel his expansion into new ventures. He is an incredibly hard worker and maybe the kindest guy I’ve ever known. Personally I’m pretty sure he’ll die with the most money but is that really the best measure of success? I would guess he works sixty to seventy hours a week. I think he enjoys it but he also feels the pressure of having a dozen balls in the air at the same time and he also has nobody to take over from him if he ever wants an exit path. While he has equipment and employees, a large part of the value is what is between Bill’s ears and in his stout heart. He’s younger than me, he won’t start thinking about retirement for another 15 years, but when that happens it may be complicated for him. I think when Bill hits 60 he will face a crisis of sorts as he tries to find an exit strategy. My guess is he may just work until he dies. I do think he enjoys work, but it has consumed most of the hours in his life. I would not trade with him.
So what is the conclusion I draw from my career and those of my corporate peers versus my entrepreneurial friends? There isn’t one. I certainly think my path was more fun than that of Tom and Chip’s and at least as interesting and entertaining as Bill’s. But my career was also more fun than that of most of my coworkers’ jobs. I found meaning and purpose in my working career and still do in retirement. I can’t say that was true for most of my corporate teammates or for my entrepreneurial friends. I do think my exit strategy was painless and let me walk away with a seven figure 401K, sizable taxable investments and lots of consulting options. The exit strategy for my business owner friends was and is a high risk venture with no assurance that when they cash out they will have enough. In the corporate world my billion dollar facilities did not have any of my money tied up in them. It was the shareholders who invested the money, I was just paid well to run things. For my three buddies it was all on them. My biggest risk, as long as I kept things legal and compliant, was having to interview for another job if I got fired. Their biggest risk is losing everything and the public embarrassment that goes with it. I don’t say that because there is any shame in failing but because losing a small business you’ve built over decades of sweat and tears has to be incredibly painful compared to simply changing corporate employers.
One measure of life is how the risks you take compare to the rewards you earn. The corporate life has much less risk but caps the rewards you can earn, for most. The entrepreneurial life has no inherent caps but has a staggering failure rate. And cruelly, while early failures don’t cost you much, failing after twenty or more years of building a sizable business has huge downsides both financially and emotionally. I knew I had a skill set that would make me financially comfortable regardless of who I went to work for. That is never guaranteed for entrepreneurs. I never cared about amassing great wealth, just about having enough. There is no regret in me for the safer path I took. I wonder what my friends would say if I put that question to them today?
What about you? Are you planning on playing it safe or taking the risk of entrepreneurship?
Is it even statistically possible to be happy in the corporate world, or was I just an outlier?
Are the risks of having brick and mortar businesses with expensive equipment and employees greater than new economy entrepreneurs face with digital, low capital investment solo businesses?