The ROI on being an entrepreneur vs. an employee
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The ROI on being an entrepreneur vs. an employee
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Re: The ROI on being an entrepreneur vs. an employee
#2Google Cache Link
http://webcache.googleusercontent.com/search?q=cache:kvX1Y03...
Re: The ROI on being an entrepreneur vs. an employee
#3Not sure an unbounded 6% annual salary increase is plausible, especially over a 35-year period. That makes the "get a job" numbers quite inflated. I think its clear that the potential payoff from being an entrepreneur is very significantly higher than being an employee; it's a question of when someone's willingness to accept a higher risk matches their circumstances (luck, market, idea, etc.)
Re: The ROI on being an entrepreneur vs. an employee
#4[deleted]
Re: The ROI on being an entrepreneur vs. an employee
#5There seems to be so much variance in starting a company that I'm not sure how valid it is to use the 'averages' to create an earnings graph.
Re: The ROI on being an entrepreneur vs. an employee
#6Small probabilities trend towards incomputability in tail events. The rate of error for the measure becomes so explosive that in that arena individual parameters seem to be more relevant, among many other things. We'd be better off with PG's intuition than this.
Re: The ROI on being an entrepreneur vs. an employee
#7Great article, two issues:
1. Instead of looking at averages for entrepreneurs (and stock-holding employees) it should look at expected values. Those take probabilities into account. So with a 0.1 chance of a $100MM payout[1] gives you an expected payout of just $10MM for ~7 years of very hard work. Not too shabby, but not spectacular either.
2. "Assuming you don’t have any exits and you work 65 hours a week while running a company (compared to 50 hours per week with a regular job)" ... while I agree that people work this much and more, the funny part is how a lot of cold hard research proves that working that much makes you less productive and lowers your chances of a serious payout.
Now can someone make this for freelancers? I feel like we're somewhere between employees and entrepreneurs. Salary definitely grows quicker than 6% and risk is definitely smaller than "pure" entrepreneurs.
[1] billion dollar exit, let's say $100MM actually gets into a founder's pocket
Re: The ROI on being an entrepreneur vs. an employee
#8There's not a single mention of taxes in the article.
I don't think that the average employee is aware that an entrepreneur/founder/self-employed person can save a lot of tax if they structure it right and are meticulous about it.
A self-employed person earning $70K a year can be better off than an employee earning $100K.
Re: The ROI on being an entrepreneur vs. an employee
#9There's not a single mention of taxes in the article. I don't think that the average employee is aware that an entrepreneur/founder/self-employed person can save a lot of tax if they structure it right and are meticulous about it. A self-employed person earning $70K a year can be better off than an employee earning $100K.
Can you expand upon that? I am always looking to reduce my taxes. I got killed with my 1099s this year.
Re: The ROI on being an entrepreneur vs. an employee
#10There's not a single mention of taxes in the article. I don't think that the average employee is aware that an entrepreneur/founder/self-employed person can save a lot of tax if they structure it right and are meticulous about it. A self-employed person earning $70K a year can be better off than an employee earning $100K.
I would also like to see some examples. If you're just writing code all day, you have an awfully low overhead. I lose over half of my side income after I hit a certain point that's covered by my deductions, at which point I simply stop doing side work.