The traditional career is expected to follow a set pattern. You finish school and start looking for work. Hopefully, you land a job that’s relevant to your profession or close enough to what you’d really like to do for a living. Then you work your way up the career ladder to get to your ideal position.
In the modern world, that’s not the experience most people go through. The straightforward progress is nowhere to be found. It’s not just that you’ll encounter roadblocks and plateaus; sometimes, the door to the next level is slammed shut.
Career progress for the typical employee is more like a series of monkey bars. You swing from one job to the next. You’re hoping to find a path to promotion or build up some transferable skills, but for the time being, you’re just ending up at the same level in a different company. What alternatives do you have?
Take on freelance work
The problem with the employee model of making a living is that you trade time for money, but your compensation is limited unless you’re among the fortunate few. If you hold a degree or two, got promoted early, built up a lot of career momentum, then you can continue to exchange time for a paycheck.
For most people, that’s not the case. Statistics show that nearly four in five American employees barely break even in terms of salary versus living expenses. You might be earning steadily while netting nothing. In the long run, how can you build up an emergency fund or save up for retirement?
The side hustle presents itself as a great alternative. In our digital world, freelance work is trending up. People find that they do, in fact, have useful skills that can satisfy existing demand. Working outside of the traditional office environment, they also enjoy more flexibility.
Once you’ve gained traction as a freelancer and bring in steady cash flow, your side hustle can effectively replace the 9 to 5. Your earning potential isn’t dictated by your employer’s terms, but by how well you can leverage your skills and network to land more high-paying clients.
Start a business
Freelancing is an attractive option to pursue. And in the age of remote work, more employers are willing to collaborate online and let contractors tackle some of their needs. But in the end, this model is still about trading time for money.
Even if your clients pay well, and you’re diligent about maximizing your productivity, your ability to earn is capped by the number of hours you can invest each day. And you’re only as secure as your longest contract. There’s a greater degree of anxiety you face as a full-time freelancer.
Thus, the solution has to involve a different operational model. Starting a business solves this problem. With a profitable business, your earning potential is non-linear. It isn’t constrained by the amount of time you personally put into the work.
Furthermore, as an entrepreneur, you’re selling something other than your personal skills. You can buy a heat press from Insta Graphic Systems and design and sell custom T-shirts. But it doesn’t have to be you doing the actual designing or selling of products.
By starting a business, you’re creating a money-making system. It will still take time and effort to be successful, probably even more than you’d need as an employee or freelancer. But the potential rewards are far greater.
Combining the best of both
However, entrepreneurs need to take on a lot of risks. The odds of failure when you launch a startup are non-negligible. There’s a very real chance that your idea might not be profitable for various reasons.
Is there yet another alternative? Risk expert Nassim Nicholas Taleb advocates for a barbell strategy as a means of combining the benefits of both options while reducing your risk exposure. The concept is simple: you take on a secure, steady-paying job while engaging in a more speculative venture.
The safe part of the equation could be a regular office job, or it could be freelance work. It has to be boring and predictable. It shouldn’t occupy any of your time or require more energy outside of the stated work hours. This allows you the freedom to pursue your second, risky side hustle.
In turn, that side hustle is no longer truly risky. You can try to publish a book, record and release your music, or create and sell an online course where you teach some valuable skill. These efforts can potentially earn you more money without being time-bound. And if they fall flat? You’ve still got that boring day job to keep you going.