≡ Menu

What Exactly Does it Mean to be “Self-Employed”?

I wanted to make a post about exactly what it means to be “self-employed”, because if you are anything like me, than you probably think that the notion of self-employment sounds like something that would be nice to do, but it’s probably way too complicated.  I used to think that way too, although I have been extremely interested in self-employment for several years now.  It wasn’t until I really changed my mindset from “that’s too hard” to “I’m pretty sure I could do that”, that I really started believing just how feasible it was to actually become self-employed.  It’s really not that hard at all!


What I used to think Self-employment was:

I used to think that self-employment meant that I had to own a business of some sort.  I thought to myself, “Well, I like music.  Maybe I’ll open a music store one day”.   I than started to think of what I would need to do in order to do that.  I would have to take out a huge business loan, buy a store, buy lots of merchandise, get employees, keep track of all my incoming and outgoing finances, do my own taxes, etc….

With thinking like that, it didn’t take me long to give up….way before I even started.  That did sound like something that was extremely complicated to do.  It also sounded like something that I would need at least a few hundred thousand dollars in order to get the business started.  I did spend a bit of time browsing around the internet reading about “opening my own store”, but it all seemed way over my head.  Within a couple hours, I shut down my browser, and stopped thinking about that idea completely.

Aside from opening a store, which was not something that I really thought I was capable of doing (nor did I have the desire to do), I thought about things such as stocks, mutual funds, bonds, stock options, etc…I browsed around the internet for a while trying to learn all that I could about these investment strategies.  I even bought a few books on these subjects.  I think I spent about 3 weeks reading about this stuff, until I realized I just didn’t care about any of it.  I knew that if I really wanted to actually make a living from investing in these things, that I would again need a decent amount of initial start-up money.  Additionally, I would need to do significant amounts of research about how exactly “the market” works.   Honestly, I had no desire to put in the time to learn the complexity of the market, and if I didn’t really have the desire to learn about it, than it would really be no different than going to a casino with a few thousand dollars and sitting down at a poker table.  Therefore this type of investing was out for me as well.

Aside from either opening my own music store and/or investing in the stock market, I had no other ideas whatsoever about how to become self-employed.  I didn’t really consider any other options on what exactly I could do….so I spent the next 5 years of my life accepting that I would just do the 9 – 5 thing (which I hated), as I didn’t feel I was capable of making a living any other way.

Luckily, that burning desire to succeed in other ways never really went away.  I sincerely thank Tim Ferriss, the author of “The Four Hour Work Week”, for providing me with the necessary kick in the ass that I needed to actually go for this self-employment thing.  I wrote him a message on Facebook thanking him.  Maybe he will read it, maybe not, but I will say that anyone who is considering the possibility of self-employment, but thinks that it impossible, should definitely check that book out.  At the very least, check his blog out.  That book and his blog was what made me finally say “enough waiting for the perfect moment to come, I’m doing this”….a few weeks later, I quit my job and became self-employed.


What Self-employment means to me now:

I have an entire new outlook on what it means to be self-employed.  I now know that I don’t need to start my own complicated business and manage a bunch of employees, nor do I think that I have to become a master stock market investor either.  All self-employment means to me now is I earn money for myself by providing my services directly to people.  This is in opposition to providing my services to a company, who than provides services to people.  By providing my services directly to people, I call all the shots.

Self-employment is not necessarily harder than being employed by a company, nor is it easier.  It’s just different.  There are pros and cons to it, but in my opinion the pros far outweigh the cons.  Namely, the fact that I can do whatever I want, whenever I want, without ever having to have a boss tell me whether or not what I am doing is allowed, is the greatest benefit I could ever ask for.

It is simply a different way of thinking than that of an employee of a company.  The thinking that goes along with being an employee is similar to that of a self-employed person, only the former involves trading your time for an exact numerical amount of money, whereas the latter involves applying your skills and intelligence in trade for varying amounts of money.

Being SELF-employed, means just that – you employ your SELF.  You are your own boss.  You operate on your own schedule.  You deal with your own problems for yourself.  You discipline yourself.  If you want to make money, than you make it.  If you don’t want to make money, than you don’t.  If you want to make more money, than you make more money.  If you feel that you make enough, than you just keep doing what you are doing.  You make the rules for yourself, plain and simple.

In my honest opinion, I like the idea of having that type of control over my own life.  As an employee, I get paid X amount of dollars to be at work for X amount of time.  During that time, I must do what I’m told.  Anything that I do in addition to what I’m told in order to help the company may or may not result in extra appreciation.  It is completely up to the discretion of my boss if he wants to increase how much money he pays me, or if he feels that I am deserving of a bonus or not.  It is also up to him if I can take a day or  week off for personal reasons, or if I can go on vacation.  If he tells me that I absolutely can’t take a certain week off because 3 other people in the company are already approved for that week off, than I have to listen to him.  If I choose to not listen to him, and I decide to not show up for work anyway, than I put myself at risk of losing my job and therefore losing my only means of income.

As a self-employed person, I do what I want, when I want.  Plain and simple.  That does not change the fact that I am still required to pay the same bills that everybody else has to pay.  No way.  It just means that I tell myself what I need to do in order to get paid, as opposed to having “a boss” tell me what to do.  In order to do this, I first need to know how much money I need to make….


Calculating the Bills:

First thing’s first, I need to figure out what payments I am responsible for, and than I can think of ways to make that much money.  Anything extra is a plus, and will allow me to buy cool toys such as cars and motorcycles and what-not.

Start by making a list of monthly bills using “worst case scenarios”, meaning that if the bills are anything less than the base numbers, than you have extra play money that month.  Say that your total monthly number comes out to $3000 for example.  That means you must somehow come up with that $3000 each month, and you can do so either by making money on your own terms or by making money on someone else’s terms.  The former may be slightly more challenging and risky, but the latter significantly limits your freedom and ability to use your creativity.

Next, think about things that you can remove that are enjoyable, but are not absolutely necessary, so that you can decrease that $3000 number (or whatever number you came up with) before taking the plunge into self-employment.  Things such as smoking a pack of cigarettes a day costs about $210 month.  Buying coffee from my favorite store in the world, Wawa, costs about $50/month.  Going to the bar every Friday and Saturday night, spending $100 each weekend costs about $400/month.  My gym membership costs $40/month….and so on.

Some things I did to reduce my total monthly bills were:

– Refinanced my house, bringing my mortgage payment from $1265 to $1065
– Paid off my car which eliminated a $330 monthly bill
– Eliminated cable TV which brought my cable bill from $195 to $40
– Called my cell phone company threatening to switch to another carrier bringing my $100 bill down to $80
– Put a stop to “automatic monthly payments” that I didn’t really need anymore such as some website that I was paying $20/month for in order to run, but realized that I could use a different hosting service for $25/year instead

Just simply think of all the things that you can do to get your total monthly number down as much as possible.  If you can manage to get your number down from $3000 to $2200, than you just made life that much easier for yourself.  It’s really not that hard, especially if you think about how much money you probably piss away each month on junk that you really don’t need.  I’m not suggesting to live an extremely boring life just so you can save a few bucks.  Rather, I’m saying think twice about signing that 5-year contract for that nice car that you will most likely be bored of in a couple of months causing you to get stuck at work for at least another 5 years.  Reducing your monthly bills may require some sacrifice, but in comparison to sacrificing 40 – 80 hours per week of your entire life, I’d say that giving up smoking or holding off on that Harley might be something to consider.

Once you have your bills calculated, and you have reduced your total monthly expense number in any ways possible, next think about how you can achieve that monthly number.


Ways to Make Money for Yourself:

People are always willing to pay for services that they can not or do not want to do themselves.  For instance, I’m scared to death of climbing up onto my 2-story house in order to clean the gutters.  If I could get past the second rung of the ladder without almost passing out, I would just climb up there myself and do it.  However, I’m worse than a 5-year-old girl when it comes to heights, so I pay a friend to do it for me twice per year.

What services can you offer people?

Can you give lessons of some sort? Guitar, piano, vocal, dancing, martial arts, etc…?

Can you do quick construction side-jobs?

Can you write articles for someone?

Do you have rooms for rent in your house, or maybe an extra bedroom in your apartment?

Can you personally train someone on how to get into shape?

Maybe you can start an Internet business of some sort such as putting Google Adsense ads onto your blog once you have figured out how to successfully bring a lot of traffic to your page.

Maybe you can start some sort of retail business where you dropship products.

Maybe you can write an E-book and sell it online.

Maybe you could actually write a hardcopy book, have it published and sell that.

Maybe you can come up with some kind of really cool computer program that you program yourself, start your own blog and sell your program on your blog.

Maybe you are an artist, and you have artwork to sell.

Maybe you can do seminars in which people are willing to pay to learn about your knowledge on a particular skill.

The possibilities are endless.

Everybody has some sort of skills that they could offer.  Additionally, anyone can use their own creativity to think of ways to make money for themselves.  Some interesting ideas start to come to the surface when you really start to think about how you can make money for yourself rather than working for someone else.  Ever since I took the plunge into the self-employment territory, I have become more creative than I have ever been.  I’m CONSTANTLY thinking of new ideas and new “services” that I can provide to people.  I just simply think of the things that I am skilled in, and I think of ways as to how I can potentially make those ideas lucrative.

If you find that all your means of making money absolutely fail, which is unlikely, and you really have to do whatever you can in order to make your rent payment that month, there are always things that you can do to come up with quick cash.  Sell some stuff that you have laying around the house.  Cash in your change that you’ve been saving in a 5-lb water cooler (if you don’t do this, you should!).  Donate your body to Science…whatever you can think of.  There are always ways to come up with the money for that rent payment.  However, I have not yet had to resort to any of those things.  When I first quit my job, I thought that I’d be struggling pretty badly.  I have found that my life didn’t really change much at all though.  The only real difference is that I don’t have to go to some crappy job that I hate every day.  Besides, if you have set upmultiple sources of income for yourself, which is the goal of being successfully self-employed, you most likely won’t need to go to those extremes.


Multiple Streams of Income:

When you work for a company, you only have one stream of income, and that is your paycheck.  If you happen to really love working, than you may even have a second job at night.  In that case you have two streams of income.

On the other hand, if you decide to spend your time developing your own streams of income, you could have as many streams as you want.  My income streams that I focus on are:

Playing gigs 3 – 5 times per week
– Renting my two spare bedrooms out of my house
– Internet blogging
– Freelance writing
– Ebooks
– Affiliate Marketing
– Developing a high-traffic website
– Giving guitar lessons

I’m constantly using my free time to improve my living situation.  If I wanted to, I could simply sit around the house all day and watch TV, and still know that I can afford to pay my bills.  I’m not that type of person though.  Therefore, I’d much rather be constantly working towards greater things.

In the future, when I eventually receive my black belt in Jiu-jitsu, which takes about 10 years on average to achieve, I may look into teaching, and possibly opening up my own gym one day.

I also would like to become a personal trainer at a gym one day (on my own terms of course, not working for the gym and collecting a paycheck).

The possibilities are endless.

The one thing that all of my income streams have in common are that they are all things that I enjoy doing.  My interests lie in music, weight lifting/strength training, Jiu-jitsu, writing, and chillin with my friends.  Therefore, I focus my life on how exactly I can do those things and make a living doing so.  That is what my entire philosophy of this website is about!

There’s a few more things that you may be thinking of when considering self-employment.



My job has great benefits!  Woopty doo!  Self-employment has the ULTIMATE benefit – freedom to do whatever you want, whenever you want, on your own terms.  Of course you still may be wondering just how much different your life may be without all of those “benefits” that your job provides you with.

1.) Health Insurance – For a 30-year old, non-smoker it costs $162/month.  That’s using Blue cross/blue shield.  There are even cheaper companies to go with, but I’d rather spend a bit more and go with a more reputable company.  That’s honestly not really that much money when considering the fact that if you do get seriously hurt, you are covered.  I know a lot of people that work full-time jobs MAINLY for “the benefits”, and by “benefits” they are typically referring to health insurance.  In my humble opinion, I’d rather have the ultimate freedom in life and just pay the $162/month, rather than spending my entire life doing something I hate.

2.) Dental Insurance – Dental insurance is an additional $420/year….that’s not really that expensive, considering I only have to come up with that $420 once per year.  If you are a person that doesn’t go to the dentist, well you don’t have to worry about this $420 per year than.  I go every 6 months though, so I suck it up and pay the $420 each year.

3.) 5 Weeks of Vacation – When you are self-employed you don’t get 5 weeks of vacation…you get 6!!!  Haha, just kidding.  Obviously, you make your own schedule, so go on vacation whenever you want!  You don’t even have to ask anyone if you’re allowed to either…it’s awesome!

4.) Taxes – Instead of your company taking care of paying the taxes for you, you have to do it yourself.  If you own a home, you get a significant refund at the end of the year for all the interest that you paid, so you can just remove that amount from how much you will owe at the end of the year.  Additionally, save all your receipts for anything that you do related to work – gas, any necessary clothing, tools, equipment, etc… Just save every single receipt you ever get.  When it comes tax time, pay an accountant (maybe you even might have a friend that would do it for free) to help you get as many deductions as possible.  Even after all that, you still may end up owing a significant amount of money at the end of the year.  Eh, it sucks…taxes certainly do suck, but don’t let that one additional payment per year scare you away from pursuing this path (assuming this is a path that you are interested in).  Besides, it’s not like you don’t have to pay taxes when you work at a real job.  You absolutely do.  The only difference is that your taxes are taken from your paycheck each week.  When you are self-employed, you could simply just put aside 25% – 30% of your income, which is used to pay your taxes at the end of the year.  It’s a bit of an added responsibility, but isn’t getting up every single day at the crack of dawn to go do something that you really don’t enjoy for 9+ hours a huge responsibility as well?  It definitely is.

5.) Retirement Plan – Here are my thoughts on “retirement” – There’s no such thing as “retirement”!  Seriously, why should I have to wait until I’m 65 until I can finally live the life I want?  I’m 30 now, and I want to live the life that I want to NOW.  I’m doing just that, and I’m doing so by doing exactly what I have said throughout this post so far.

Let’s consider the alternative.  I could stay at a company that I don’t particularly enjoy…or maybe I could even get a different job that I don’t like.  I could spend 50 hours per week on average doing stuff that really doesn’t interest me much, and I could continue doing that for the next 35 to 40 years of my life.  When the time comes that I can finally retire (assuming I don’t get hit by a bus or something before than), I can finally stop working and still get paid a little bit of money each week via. my 401K or pension plan.  Of course, that’s only one single income stream, and most likely it won’t even be the same amount of money that I have grown used to getting when I was working.  Therefore, I will probably still continue to work at some sort of part-time job or maybe even another full-time job so that I can continue living the same lifestyle that I have grown accustomed to throughout all my “working years”.

If, however, when I retire I decide that I’m absolutely done with work.  What exactly is a 65-year old man or woman going to do with their time?  I mean, considering their lives consisted primarily of working at a job that they don’t like, what exactly are they going to do with all the extra free time? Watch more TV? Start golfing? Do more fishing? Maybe take up an instrument? If a person spends their entire lives working everyday, but only spending minimal time (if any) actually doing the things they enjoy doing, it is safe to assume that once retirement time comes they will get extremely bored very quickly.

Now let’s consider what “retirement” (or lack thereof) consists of for someone who has spent their life doing the things they love, and making a living doing so.


Retirement for a Self-employed person:

Someone who has spent the majority of their life learning how to combine making a living with the freedom to do the things that they choose to do will never actually retire, nor will they ever need to.

– A self-employed person generally does not rely on just one income stream
– A self-employed person spent the majority of their life focusing on their interests and hobbies, and will continue doing so when they turn 65
– Through many years of experience, a self-employed person knows how to manage their time properly, and knows how to spend their days doing the things that they want to do.  Unlike someone who works for 50 years, than all of a sudden is forced to figure out what the hell they are going to do all day once “work” is removed from their lives, a self-employed person is well-conditioned in this aspect.

In conclusion, it is very possible for anyone to become self-employed.  It doesn’t matter if you are 18 years old or 60 years old.  If you are a normal human being with a working brain, and the ability to think for yourself, you can do it.  I highly suggest that if this is something that you are interested in, at the very least start thinking about ways that you can work for yourself as opposed to working for someone else.  It is surprisingly simple to do once you come up with a game plan as to what services or products you have to offer.  The hardest part is simply just putting one foot in front of the other and just doing it!

I did, and I’ve never been happier!

P.S. – If you liked this article, and the overall message that I am conveying in my site, you should really sign up for my mailing list. I sporadically send out emails with all kinds of cool content. It’s free to join!!

Comments on this entry are closed.