I've always wondered something about people who work for someone else..and it's this. Why in the hell would you do it? Let me explain. Let's say you make $100,000. Do you know what that means for your company? Well for starters you better be making AT LEAST $200K per year for them (unless your in government), or they are going to fire you. They have a lot of expences that come along with you including your FICA taxes and then your benefits too. You might have health insurance, dental, 401K (matching) and life insurance. Then you include the office space you take up, the computer you use and your secretary and everything else that goes along with that. You need to make 200K for your company just for them to break even on you. Why in the world are you trading your hard earned experience for only half of what you are worth (and probably much less). A lot of people would answer "security", but that's not true at all. Look around you and you will see exactly how much your company really cares about you and how secure your job really is. So again, why are you trading in your hard earned experience for half price when all you get in return is a false feeling of security? Brandon
Not all people have the mentality to be self-employed. I think you are right about the security part. And if you have a family, the pressure is that much greater because we know the ladies are all about security. But, if you are successful there is no greater satisfaction. After being my own boss for 21 years, I went to work for someone else and I just did not have the same drive. Maybe it was different for others. Anyway, you will probably see more of this in the future unless the economy comes roaring back..........which looks highly unlikely given the shape the USA is in at the moment.
Brandon, I understand your concept and I truly agree with the "why would you do it" part. However, Not a single one of my employees individually makes me double their salary. And I am not going to fire a single one of them. I can't do a good job of explaining it but there is a lot of unseen work and injinuity behind each job that an employer offers. It is the skills to create ensure and keep that offer of employment that many people do not know if they have. For one most of us are not raised to find what we can do for ourselves but rather what type of job we need or want.
Brandon, you're not thinking this through. If you work for yourself (if that's even a possibility) you'd have the same cost for all those benefits (FICA, health insurance, etc.) as your employer does - perhaps even more as you'd lose some economies of scale that an employer enjoys. So as an employee, you're not working for half your value as you suggest - your simply receiving the net value, after expenses and benefits. You gain some security, etc. in exchange for allowing the employer to make some profit on your work. It's a fair deal.
In my experience, most employees don't like to make decisions. They do not care for the pressure or responsibility or obligations that follow. Also, most believe entrepreneurship is risky and cannot find it in themselves to move from a "comfortable" salary to an "uncertain" venture.
Because employees get to benefit from the firm's paid-in capital/retained earnings, debt and its existing capital stock. Lets say you are an engineer generating $1m a year for an oil firm. The fact that you make $400K shouldn't influence your decision in whether to take the job because you likely dont have the capital to buy oil fields, the equipment to extract/transport oil, etc Plus if every engineer started their own oil firm there would be no one left to hire, wages would rise and draw the engineers who were too lazy to start their own firms, setting a new equilibrium
I knew this guy who worked for the state and designed a device I'll call product "X" to replace "Y' that was in use at the time. He got a couple thou and an award for saving the state millions of dollars. I asked him why he didn't manu the product himself and sell it to the state, and basically the thought never occured to him among other nonsensical jibberish while I'm beating my head against the wall for an idea/opp like that. This was an idea that came about in passing and not part of his job to design/ideas cost savings etc.
That's a very good question Brandonf, when meant for self-reflection more so than discussion, perhaps.
There are varying degrees of wage-slavishness. I've changed employers 4 times in my 29 year career as an engineer. But friends of mine from my first employer (out of college) are still there and thought I was crazy for leaving. I've had friends who are contractors and change jobs every year or 2. I'm looking for a level of competence in trading that will enable me to have an "employment optional" mindset. It's not necessarily part of my plan to resign one day, but if I'm laid off I won't fear it like I did 20 years ago. And at my age, it's prudent to plan for this. I'll probably never be rich, but I know I won't ever be homeless and that's the key, at least for me. It's good enough.