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IT SEEMS LIKE EVERY month or so, one of our kids—and, for the married ones, that includes spouse and little ones—is on vacation. A week or two in Cabo or Cozumel, a road trip out west, or a jaunt to some other interesting destination is commonplace. How is this possible? One of the reasons, I believe, is because they don’t work for themselves.
Instead, they work for big institutions, such as corporations, universities, school districts and large nonprofits.
I left my position as a prosecutor with the district attorney’s office in 1983, when I got a job offer from a two-man law firm. I happily remained there until I retired in 2017. I took a lot of pride in our firm and enjoyed the independence that came with being our own bosses. But the burdens of running a small business were significant.
While my partners and I helped each other in numerous ways, we had an “eat what you kill” system. My income came only from the clients I signed up and personally represented. There was no sharing among the partners. This meant that if I wasn’t working, I wasn’t earning. As I often explained to my dear wife, if we took a vacation, it was a double whammy. Not only did we have the cost of the vacation itself, but also for those days when I was away from the office and not hustling, there was less income—and no new clients. With four kids to get through college, we didn’t take many vacations.
Moreover, since my partners and I each did our own work, there was no one to keep up with it while we were gone. Upon return, there were always several hectic days of catchup.
But our kids and their spouses enjoy a different life. They have paid vacation time every year, so there’s no loss of income. In their large organizations, there’s a whole structure which can, at least to some extent, pick up the work slack while they’re away.
Another advantage is that, with their jobs, the administrative stuff is handled by their employers. As the compulsive organizer in our small firm, most of that fell on my shoulders. Added to the legal work were tasks like hiring a new secretary or runner, buying supplies and dealing with our vendors.
As for retirement plans, we had none until one day, many years ago, I stumbled on SIMPLE plans. But as for any “free money” employer matches, the only employer making the modest matches to our plan was us.
And then there was health insurance. We weren’t big enough to qualify for any group health plans, so for us it was the endless hassle and expense of dealing with the individual health insurance market. I could tell some nightmare stories.
In The Millionaire Next Door, one of the first finance books I ever read and one that influenced me greatly, the point was made that many millionaires are entrepreneurs. I don’t doubt it. But these days, I think a little more about all the sacrifices those driven individuals must have made to get to that point.
I take a lot of pride in what I accomplished in my career, including the fact that our kids all made it through college and graduated debt-free. But I’m also gratified that they seem to have found a different path, and quite likely a better one.
A very interesting article. Thanks!
My career covered both private and public sector. Included in private was 5 years as SrVP in a consulting firm. I had as many as 150 people working for me and I had to find the business and service it, mostly large IT projects. Fortunately, I had some great project managers, but was still involved in all aspects of the business ranging from recruiting, business development, contract administration and project oversight.
I always felt I got 15 years’ experience in 5 years. But I could never see myself growing old in that role. It was too fast paced, and a 45 hour work week, as another post said, was only a dream in that job. However, that experience was invaluable for the rest of my career. I spent 22 years in govt and retired from govt with a full pension and paid health care.
So true Andrew. As a physician in private practice I felt that “double whammy” upside the head: all the expenses of a family vacation while covering all the office overhead, staff salaries etc. and nothing coming in. My partners and I joked that it was like working in the local Levi’s factory and being paid for piecework.
Great article Andrew. I worked for Fortune 500 corporations for 37 years. Although I worked numerous proposals, and did a stint in business development, most of my career was working on government and commercial projects. When I stopped working full-time I started a one-man consulting gig. Over the last 5 years I’ve developed a tremendous appreciation for people who “ate what they killed”. Finding work, marketing yourself, and running a business are not for the faint of heart. I feel fortunate that the vast majority of my career was filled with challenging, meaningful work that was hunted and captured by others.
Thanks for all the thoughtful comments. And one footnote: Lest the title give the impression I think my kids are playing all day, the original one was “Institutional Edge”. Jonathan has a knack for snappier titles, though, and bestowed one on this short piece.
Over the last 30 years or so, I’ve often thought about working for myself. I feel confident I have the knowledge and skills to manage a solo business, but I always lacked the nerve to leave a steady paycheck and genrous benefit plans behind.
Now, as I get close (very close) to retiring, I’m realizing I may be able to have the best of both worlds. I’ve stayed at my current job long enough (24 years) to have earned an ‘early retiree’ benefit that will allow me to have health insurance coverage until I pass away. The job I had prior to this one will provide me with a small pension. Along with my retirement savings, Social Security and the money I stand to make selling a house, I may be in a position to start a small business when I retire.
Don’t put too much faith in that lifetime health coverage. The megacorp I worked for promised the same, but more than a decade ago they stopped the benefit, providing a $3,000 annual contribution instead. That doesn’t go far.
I think we all work the number of hours we choose to work. Me, I averaged maybe 45 hours a week counting my commute. I still ended up running a billion dollar company in spite of my competition nearly living at work. They wanted to work long hours, I didn’t. I think that is true, maybe to a lesser extent, for sole proprietors like you. You chose that life, nothing prevented you from finding a job that was less demanding. People raise four kids all the time on median incomes. You chose to trade a lot of hours for more money. And that’s not a bad choice, it was probably the best possible choice for you. I think it is part of the backbone of a country, those independent types willing to sacrifice to build something special, to be their own boss. Those kids still get raised well and life is still a grand adventure. At the end of the day it isn’t about how many hours spent where. Its about how much you impact those around you. Very thoughtful post!
As a person who retired from a large company with a pension based on nearly fifty years of service i know you are correct. There is a big difference today though. Few workers stay with a company ling enough to obtain the benefits. Staying with a company 3-4 years or working in the gig economy has consequences.
Few, or at least fewer, companies offer those benefits in the first place. I was fortunate to just make the cut when the company I worked for stopped providing a defined benefit pension plan. If I had joined the company just a couple of years later I would have been out of luck. As it was, my pension stopped growing when I reached 30 years, one reason I took early retirement.
Agree – thanks for sharing nuances with eat what you kill, or any contract/consulting gigs – especially with Health insurance.
Many such trade/business/contact/self-employed folks — usually have their spouses work in low-stress or part-time jobs which provide full/group Health insurance. But, it must be difficult to raise 4 kiddos – with your already hectic schedule.
Kudos – now you are proud parents of 4 successful kids !!