2085: The Joy of Self Employment by Mr. Money Mustache on Benefits Of Self Employment

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[00:00:54] This is Optimal Work Daily. The Joy of Self-Employment by Mr. Money Mustache of MrMoneyMustache.com. When I retired from real work back in 2005, I inadvertently crossed a very interesting divide in our society. It was the canyon that separates the people with real jobs from the self-employed.

[00:01:17] As it turns out, I was entering a sparsely populated area. Only about 1 in 9 workers in the U.S. is self-employed, a figure that is lower than Canada and most European countries. Those numbers surprise me since we're supposedly an entrepreneurial country with over 60% of all new jobs coming from small companies with under 500 employees. But yet, now that I am self-employed, I seem to hang around with and meet almost 50% self-employed people.

[00:01:45] Maybe it's my neighborhood, which is a bit of an earthy and less rat race-oriented clump of historical housing. Or maybe it's just the tendency of entrepreneurial people to select a like-minded group of friends. But by joining this minority, I've gained a very interesting new perspective on what it means to have a job and to earn money in exchange for work. When I had a job, I always thought it was a pretty special thing. Ooh, I wouldn't want to lose my job. What if I could never get another one? These job thingies sure are mysterious.

[00:02:14] I show up for work each day and type on a computer, and they magically deliver great gobs of money to my checking account. How do they do it? I wonder how jobs even get created. I don't really know, since all I've ever done is take jobs rather than make them. As a member of a plain old employee class, I was always curious about the mysterious world of the self-employed business owners. Imagine being your own boss, I would think. Why, you could set your own working hours, or even your own working seasons.

[00:02:42] Man, the first thing I would do is strike Mondays entirely from the work schedule. So I started checking out library books about starting one's own business. They dealt with the tax laws, the trade-offs between corporations and simpler partnerships like the LLC. It sounded fairly complicated at the time, but I soaked it all up, and when it came right down to it, starting a business really only required these two steps. One, go to the IRS website and apply for an employer identification number, or EIN.

[00:03:10] Two, go to your state's website and register your business with the state. This may involve submitting a signed document or two and a small fee. It was $50 here in Colorado. Hints. To find your state website, just do a Google search for your state and register a business. Also, for your first business, you probably just want to use the LLC organization style. It's flexible, simple, and you can change it in the unlikely event that you ever need to. And boom, you have a business.

[00:03:38] You can use the new EIN to get a bank account in the name of your business, to file business tax returns at the end of each year, and things can grow as much as you like from that point. So, I followed the steps and started my own business, just before retiring from real work. Initially, my new company seemed just an imaginary concept, but then a sense of reassuring power started to seep in. People started asking me for help with things, and then asking, how much do I owe you?

[00:04:04] At that point, I would create a quick spreadsheet telling the person how much money I wanted them to give me, and they would give me exactly that amount. It seemed amazing to me that I could hang around in someone's house to set up a computer network, or play with advanced power tools in the garage to build eco-friendly coffins for a local company, or even answer questions about the power consumption of an electric vehicle, and receive real money for these services, valid money which I could then trade for groceries. At this point, I realized I would never go hungry.

[00:04:33] If I really want the amazing firehose of cash that full-time professional employment provides, I can go get one of those jobs. If I just want occasional boosts of cash, and or self-esteem, I can crank up or down the self-employment schedule as needed. Since I don't have much need for regular income, the self-employment gig is really just a reassuring companion. Self-employment is a big, muscular friend who follows you around and smiles a lot,

[00:04:59] but cracks his knuckles and lets out a very low 30 hertz growl if life ever attempts to get up in your face. My amazement at getting paid for doing random, fun projects around the town continues to this day. But yet, I do not have any of the burdens of a real job. When I wake up every morning, my only obligation is to the coffee machine and the frying pan to make the family a nice breakfast while they play in the living room or the garden. When it rains or snows, I laugh heartily and grab a good book or a vacuum cleaner

[00:05:27] and watch the storm through the comfort of double-pane windows. When the sun shines upon the Rocky Mountains the other 300 days of the year, I take great pleasure in mixing bicycle errands and completely random local work into my mostly full-time parenting schedule. Meanwhile, almost everything in life has become tax-deductible. The main things I spend money on besides groceries are tools, a good computer or camera occasionally, and cell phone and internet service.

[00:05:53] All of these are required by the business, so the business pays for them. With this newfound additional blog-writing hat in the closet, I might even be able to write off some travel expenses in the future. And all the while, there is nobody sitting in their corner office, clucking their tongue and checking their watch, and wondering when that money-mustache lad is ever going to get to the office. If you already have worked for yourself, you know what I'm talking about. But if you've only ever been an employee, you might have an unnecessarily fearful view of your financial future.

[00:06:23] An employee does not have complete control of their income stream, and for most of us, lack of control causes fear. Mr. Money Mustache's never-ending prescription for curing fear is gaining more control over all aspects of your life. Spending less money instantly increases your control. Building up investments that provide passive income gives you even more control. And starting your own business, even if it's just for some learning and dabbling on the side while you keep your day job,

[00:06:51] brings you even more of that happy coffee machine and frying pan, laughing on the back patio with a giant homebrew control. You just listened to the post titled, The Joy of Self-Employment, by Mr. Money Mustache, of MrMoneyMustache.com. When you finally find your thing, you want the whole world to know about that thing. So you use a thing called Canva to make it an even bigger and better thing.

[00:07:21] Whether you want to create flyers for that thing, make presentations for that thing, or design merch for that thing, you can do anything. So people can see your thing, feel your thing, love your thing. The next thing you know, it's a thing. Canva, the thing that makes anything a thing. Study. And play. Come together on a Windows 11 PC. And for a limited time, college students get

[00:07:48] the best of both worlds. Get the Unreal College Deal. Everything you need to study and play with select Windows 11 PCs. Eligible students get a year of Microsoft 365 Premium and a year of Xbox Game Pass Ultimate with a custom color Xbox wireless controller. Learn more at windows.com slash student offer. While supplies last, ends June 30th. Terms at aka.ms slash college PC. And thanks so much to Mr. Money Mustache, who, if you've listened to Optimal Finance Daily over the years,

[00:08:16] you are pretty familiar with because we've shared a lot of his work over there. He's a 30-something retiree who now writes about how we can all live a frugal yet awesome life of leisure. His blog was born in 2011 out of exasperation. Six years into his early retirement, life was going well and his little boy was growing up nicely. But many of his friends and former co-workers remained broke, constantly complaining about how hard middle-class life is these days and how much they would like to be able to afford to lose at least one of their six-figure salaries

[00:08:46] so someone could stay home with the kids. So, he decided to start this blog to share some of the secrets of how all this can be done. How you can create a life that is better than your current one, that just happens to cost 50-75% less. So, for more great content from him, check out MrMoneyMustache.com. That's the abbreviation for MrMRMoneyMustache.com. And I think that is going to do it for today. Hope you're having a great one. Thanks so much for being here with me,

[00:09:15] and I will see you right back here tomorrow, where your optimal life awaits.