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Should you be self-employed?

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It takes a certain personality to become self-employed. You need to have discipline, drive, determination, be willing to fail fast and regroup faster. The first few business opportunities may not work out for you. But you need to be the type that will not give in and learn from your mistakes.

If you consider the amount of time, training, discipline and drive it takes to become self-employeed, most people would just be thankful for their steady paycheck from "The Man" and never look back.

But think about it ....

When you're working for someone else, you help build their empire. They decide how much money you're worth and, if you're lucky, in a year, you'll get a $0.50 per hour raise. Most people have to work 3-4 months out of the year just to pay their taxes on that income.

After a year, you'll receive two weeks vacation. You get up early to fight rush hour traffic. You spend hours behind a desk hoping that what you're doing is important enough to be saved from the next round of layoffs.

Your boss asks you to work late, come in early, work weekends, and give up your precious time to finish projects. You'll do it to get that raise, the promotion, the "next big thing" that will help your family get out of the rat race. But with more money, you'll get more stuff. Maybe you'll buy things to keep from feeling guilty about staying away from your spouse and children so much. Your debt gets bigger and then you need to work more.

In 30 years -- if you're lucky enough not to get laid off -- you'll receive a pension that most likely won't cover the cost of living. You may have already had a heart attack or stroke form all the stress and years of sitting behind a desk without much exercise, forcing you to take a part time job. Since our society doesn't relish our seniors, most of your options will be in places like Wal-Mart, McDonald's and other chain retailers, where you'll earn minimum wage. How useful is all that work you did now?

Don't climb the corporate ladder, build your own.

When you're self employed, you get to choose your own hours, your own vacation, you get enormous tax deductions, freedom, the security of knowing you won't fire yourself and that you have complete control over your future. However, it's the structure of the business that really matters.

In order to have true success, your business must suit your personality and you must create a system to follow that allows for residual income. Residual income is where you do the work once, but keep getting paid over and over again. Keep in mind: if you are the only one who can do the job, then you have another job, not freedom. Your business needs to be able to exist and thrive in your absence.

People get so caught-up in the desire to have a "work at home job" that they forget it's still a job. If you get paid by the hour or by the project, you're not creating financial freedom. In the book Cash-Flow Quadrant, Robert Kiyosaki explains that while it's nice to be self employed, what people often don't understand is that they are still an integral part of the business' lifeline, whereas when you create a business that runs in your absence, you are truly creating financial freedom.

While you're looking around at various ways to replace your "job" income, consider that being self-employed isn't necessarily the answer to all of your problems, but building a business just might be.

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