To achieve financial success, do you have to be an entrepreneur? Let’s limit the context here before we get on an endless debate on the definition of “financial success”. Here, I am not referring to being a billionaire or even a deca-millionaire. Financial success in this perspective is about 

  • making a decent income, like a few hundred thousand ringgits a year
  • Having a few million ringgits retirement fund
  • Live an above-average lifestyle, e.g., a decent car, a comfortable house, yearly overseas vacations, things like that…

So the questions again: must you do business to achieve all these?

I want to share my experience and observations. I was never employed before. Immediately after graduation, I threw my aeronautical engineering degree down the drain and made music full-time. I have been a self-employed business owner right from the start. From being a musician, financial planner, blogger to becoming a personal finance author and trainer, I never worked as an employee for a day. Well, I am glad that I am doing fine all these years for more than two decades.

On the other hand, my wife was guaranteed a job because she took the scholarship from a well-known hi-tech MNC. During the past two decades, she briefly quit the corporate world two times. Anyway, she spent most of her time building a career in big companies. Now, she works in one of the trillion-dollar-market-cap companies. And as a comparison to me, I was actually trailing behind most of the time, trying to catch up with her income. As of now, we are both doing pretty decently in terms of what we define as “financial success” earlier on.

The short answer to the big question – do you absolutely need to start a business to attain financial success – is “NO”. 

You don’t have to be an entrepreneur to become a financial success.

But let’s dive in deeper to look at the nuances. You see, my wife and I went through different paths. We started from the same beginning — low-income family background and graduated from UTM with engineering degrees. And after two decades, we are both doing alright in our separate fields. 

However, during those years, there are times that I admire what she enjoys as an employee. And vice versa, sometimes she envies the things I get to enjoy as my own boss. 

Pros and Cons of Being an Employee & the Boss Working in his own Company

Believe it or not, you genuinely get a lot of privileges as an employee.

Firstly, a guaranteed base salary. No matter how the company performs, you get your money as agreed in the contract at the end of the month. On the flip side, the boss might not be making good money all year long. There might be times that the boss has to take out a high-interest loan to fund the payroll. 

Secondly, employees get perks like EPF, Socso, free medical and life insurance, paid holidays, paid medical leave, paid vacation, and even paid training. You heard it right! You got paid for your hours attending training! My wife gets to attend some of the best training and convention that other participants paid thousands of dollars to get in, all fully subsidized by her employers. As a businessman, I do attend training and courses too. But of course, I have to come up with the money myself. 

Thirdly, you get opportunities to travel overseas for assignments and even stay in a foreign country for an extended time. My wife visited Taiwan, China, India, Japan, and the USA multiple times, all expenses fully paid. And sometimes I followed along and enjoyed the free 5-star hotel stay and excellent meals. On the contrary, many entrepreneurs are extremely busy working in their businesses that they don’t even have time to bring their family for a short vacation. 

Number four, as an employee, you get to quit anytime you want! Ironically, some people look at this as having no job security. But as an observer, I think this could be the best flexibility you get to enjoy working for a company. When you hate the job, you can tender your resignation. Work somewhere else. Almost immediately, you can throw everything behind. Then you get a fresh start in the next role. I can tell you this — you will have no job security when you have no capability. High-performers will always be sought-after. That’s what the headhunters are doing nowadays — searching and recruiting great people. My wife is very good at what she does. So as you can guess, headhunters always knock on her door. 

On the other hand, it is always a tough decision for an entrepreneur to give up a business. When the company is in its infancy, giving up means a considerable loss of your startup capital. If the business already grew to a few hundred employees, the boss’s decisions affect hundreds of families who rely on the company for survival. To stop being trapped in the day-to-day business operation, the boss must train replacements or find an exit plan like a merger or selling the company. It is not something a “resignation letter” will solve.

Furthermore, an entrepreneur worries about everything happening in the company. You worry when the sales are not good, cash is not enough, a good employee resigns, a competitor opens next door, the government imposes new taxes and regulations, and the list goes on. 

Now you understand the advantage of being an employee and the challenges an entrepreneur faces. Let’s examine what an entrepreneur gets to enjoy that an employee doesn’t.

The Advantages of Being Your Own Boss

Number one, flexibility! You get to call the shot. You can decide what type of business you want to do, what kind of customers you want to serve, what products you want to sell. You get to set almost every minor detail in your business.

In my case, I treasure freedom — the freedom to work whenever I want, wherever I want, with the person I enjoy working with. As a result, I design my business that suits my lifestyle. That’s why I don’t have an office where I need to travel back and forth every day. I don’t even have a permanent employee on my payroll. Although I work with a few regular freelancers, they are not my permanent employees. That’s how I run my business, so I get to enjoy the freedom as much as I want. 

Number two, there is no upside limit of how much you can make. Depending on your capability and aspiration, who knows, you might build a giant company like how Jeff Bezos created Amazon. Nobody can restrict you, saying, “eh, you cannot earn over $1 million. You have to stop now!” unless you offend the people in power. Nobody is stopping you from getting to the next level. I think you get the idea. 

Of course, other than the two main advantages above, an entrepreneur also enjoy

  • Working on the things you love
  • Working with the people you like
  • Creating your own opportunities and destiny
  • Solve problems and make a difference in the world

And you can still add a lot to the list. 

In the end, whether you are a failure or a success, regardless of the path through climbing the corporate ladder or entrepreneurship, you have to persevere, work your ass off, work smart, and keep improving. That’s the only way to see income increase, year after year. 

Here is the final wisdom. Think about this — “Where is the MONEY?”

You see, the big bucks come from business profits. 

Entrepreneurs become rich because the businesses they own manage to earn a lot of money.  

Being an employee doesn’t mean you are being left out. You can still participate in great businesses through stock ownership. You can take up the employee stock ownership plan or buy other companies’ shares in the open market. You, too, can be an investor and owner of great businesses. And the best part, you get to skip the real hardship of building a business from the ground up.

To be a financial success, both ways — stable employment & entrepreneurship — can get you there. Embrace what you have decided to do, enjoy the process and be happy. 

Be smarter with money! 


Personal finance author and trainer

    1 Response to "Entrepreneur Vs Employee: Which Path is Better?"

    • Adam Tan

      Thanks KC for the great sharing. I’ve being an employee but preferred to trade my niche IT knowledge to gain higher income instead of playing office politics to climb corporate ladder. I setup my own boutique consulting firm that generates decent income with my preferred partner. Since 2014, I sharpen my investment skills and earning good return from stock market. Thanks to your webinar and tips I manage to grow these 3 areas in my personal growth. Cheers!

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