I've been doing a lot of thinking over this holiday break. Thinking about life, work, kids, parenting, friends, our relationship with material items and the global situation our country finds it in (or the Bush administration drove us into).
I'll let others, like my friends Roger Ehrenberg and Howard Lindzon and Fred Wilson, talk about the macro situation. Maybe it's the fact that I have 3 young kids, but I am focused very much on the micro. Specifically, how can we as individuals control our own destiny and live the life we want to live despite the cards (personal and global) we are dealt?
These are the main themes of The Last Lecture and Deadwood that I mentioned yesterday in my "2008: Get Some Perspective People" post and probably why I can't get them out of my head.
The only way you can control your own destiny and live the life you want is to quit your job Monday and start a company or do something that you absolutely love. OK, maybe not Monday based on your circumstances. But you get the idea.
If you fail to act and protect yourself, you're being delusional and, worse, if you have kids and a family, negligent, mortgaging your and their future for short-term gain (a fleeting paycheck).
The "security" society is over. Social security is bankrupt. We know that. The program, like many others in the US, is a GIANT PONZI SCHEME! The money I pay today for social security goes right out the door to pay for benefits of others. Sounds very Madoffish to me. Madoff was only taking a page out of the American playbook.
Job security, forget about it. Assume you will be laid off, no matter what industry you're in. Expect it to happen sooner than later if you're in retail, an associate at any service firm (law firm, acccounting firm, architecture, etc.), if you work on Wall Street, if the primary medium your media company delivers its content in is dead trees or anything that has analog in its name. Even the healthiest companies with too much cash, technology companies, will be shedding employees.
Unemployment, COBRA, the EPA, FEMA, SEC, TARP and most other government safety blankets and protectors are irrelevant. It's not that the good people (in most cases) who work there are all ignorant and don't mean well. We've seen over and over again that government protections don't work. It doesn't matter if you are poor in post-Katrina New Orleans or formerly rich, like millionaire Robert Chew and his family who were wiped out by Madoff or like my many friends who made real money on Wall Street only to find their jobs, their entire industry actually, gone forever. You won't be protected or made whole.
Government security is over. Job security is over. Financial security is over. Sit with it. Feel it. Be with it. And start acting.
Now that you know that you're going to be laid off, perhaps very soon, or, worse, allowed to work feverishly for years and then let go, let me tell you why it makes financial sense to start your own business - even if you continue to get your paycheck, you're paying 40 percent to the local, state and federal government. So the real opportunity cost is the after tax money, the in your pocket money.
I'd argue that investing that money in your future is a better investment than investing 10 hours a day, and probably many weekends, trying to make someone else money, someone who may lay you off very soon.
OK. Here's the match. Say you make $120,000 per year. Now that's a lot
of money. But it's probably typical of many of the visitors here.
$48,000 goes right out the door. So your in "your pocket pay" is really
$72,000, or $6,000/mo. That's the investment you'll be making in your
future, it's your opportunity cost. It's a lot of money but definitely
not enough to build any sort of real cushion or wealth, specially if
you live in any city.
Now the old model was to slave away at a company earning enough to
"survive" and support your family in hopes that you'd move up and make
the big money in a decade (or two). Well, now that golden payday has
been crushed. You'll be laid off well before that payday comes and
you'll be forced to take a lower salary (or same salary) and be no
closer to real money.
So the question you need to ask is simple: is your annual take home pay, after taxes, really enough for you to justify the status, albeit it potentially fleeting, quo? I'd argue for many of you that the answer is NO by a long shot. And you taking your paycheck and deluding yourself to think that this too will pass is dangerous and short-sighted.
Starting a company provides you two main benefits: flexibility and a prosperous future where you'll control your own destiny. You'll also have learned the financial survival skills necessary to thrive in any environment without sitting at your desk worrying about whether you're on the chopping block. What I love most about starting companies is being able to show up to Myles' chess class at 2 pm just because I want to.
In 2009 I promise to help as many people as I can get off the ground and start their own businesses. I love doing it and plan to devote more time to doing it. Call me or email if you want to get together and need help.
As for those who don't feel comfortable starting a company, I'd suggest two things. First, quit your job at a large company and go work at a start up. Take a lower paycheck in exchange for equity. Second, if business is not your thing, go do something that you think you'll love and can probably do for a long time. Teach, volunteer, work for a non profit, become a nurse. You may not have the financial upside, but you'll be living the life you want to live.
So let's start a movement. It's only Wednesday, the day before a New Year and a New You! Forward this link, post it to FB and Twitter. Let's help everyone we can control their own destiny and ween themselves off of the security blankets of the past.
Let's officially make Monday Quit Your Job and Start a Company Day!!!!
