The title of this post is a little misleading, as my astute readers would know that your business will also ‘cost’ you 60 to 100+ hours a week, even as it matures.
But, Con has a real ‘business v job’ dilemma:
I’m kinda stuck in a dilemma as to what I should do after graduation in June this year.
I did my undergrad for 3 years, worked for a year and went back to school for another 2 years to get my masters.
I recently got a job at an investment bank making around A$100k after taxes. However, I will be working 100 hour weeks.
I really enjoyed my time when I was a kid going through highschool because I used to sell stuff online and amassed a small fortune about $30k out of that. I don’t think any 17 year old kid had that much money back then. However, I stopped selling stuff because of other commitments and ‘uni life’.
After so many years of formal education, I think that too much education is a hinderance to entrepreneurship. I have about $50k in capital right now, and I am thinking of starting something small.
But on the other hand, if my business doesn’t work, I will be sacrificing a ‘good’ career opportunity + time wasted. I am 23 this year, and my peers have already 2 years of work experience ahead of me.
Unfortunately, I can not give Con – or, anybody for that matter – direct personal advice, but I can tell you about my 16 y.o. son who has a very parallel life and aspirations:
– My son is still in high school and started off selling eBay stuff online and now has ‘graduated’ to a fully-functioning web-site that earns him about $100 a week … I’m sure it will make him a lot more if he knew how to promote it online.
– My son wants to be an investment banker but is not happy about the typical 100 hr work-week and, neither should Con be happy with that set of working conditions … for long!
Since I can’t give Con personal advice, what I would tell my son is:
1. Continue on the educational path that seems to make the most sense / offer the most opportunities (if he asked me if investment banking – and the double law/commerce degree required – was a good choice, I would say “it’s up to you, but I think it’s fine!”)
2. Continue to build his businesses part-time … with luck, his business (or, any future business he decides to start) will replace the time/revenue from a part-time job. Hey, nobody gets to study without working at least part-time, right?
3. At some stage he may need to make the hard decision: continue studying or continue to grow the businesses, but that’s unlikely.
Which ultimately might lead him to exactly where it sounds like Con is today:
My advice – if my son chooses to ask for it – would be to work at least 2 years at the required 100+ hours / week, then make the ‘corporate life v business ownership’ decision; he should walk away with some excellent corporate/professional experience and he should have some serious debt paid off and some big $$$ behind him … in the meantime, I would strongly advice my son not to spend a dime unnecessarily.
For anybody still going through college or starting their first job or business, I say:
Keep living like a penniless college kid, mooching off family and friends like any ‘normal’ college kid does, while you’re busy investing 99% of what you earn.
Then you’ll have the capital (and/or no debts) to do whatever it is that you like!
You are going to have to make much more than $100k you get after tax to make up for the lost income+benefits of a corporate job. Think more like $150k per year to account for the health care costs and taxes your employer pays/subsidies for you. That’s a lot of DVDs to sell on ebay!
@ Brad – LOL. You are right … but, don’t forget ‘goodwill’ i.e. the amount that you MAY be able to sell the business for after X years … for DVD’s on eBay, goodwill will be close to $0, but for a model like Netflix it could be very large indeed 😉
I think you could benefit from a different perspective on your situation. First, 100 hrs/week is really brutal- that only leaves 68 hrs for EVERYTHING else… That really isn’t sustainable long term. Could you raise a family with only 68 hrs?
Unless there is a reasonable chance of a significant bonus- you are working that hard for about $20/hr!
Bankers need to maintain a certain image- that isn’t going to be cheap. Investment banks are usually in financial centers and tend to have higher costs of living… How much more will you need to pay for rent, food, entertainment etc. I wouldn’t be surprised if Con ends up saving less $/year as an investment banker then his is currently.
You should be aware that very few people would have saved $50K in two years. With a $100K that’s 25% of the gross salary. That is a huge % to save. I would expect that you are far ahead of your peers in savings.
Running your own business is building career experience and it differentiates you from your peers. Even if the venture doesn’t succeed you will learn a lot of lesions.
Great advice Adrian. While I’m not quite working those many hours or making that much in my corporate job, I’ve had a similar quandary in regards to pursuing my online business vs. working corporate. I keep telling myself I at least need to put in a year before considering leaving. If anything, the year will encourage me to work harder in my endeavors so that I never have to come back to the corporate life.
“If anything, the year will encourage me to work harder in my endeavors so that I never have to come back to the corporate life.”
@ Will – LOL. A cynic … just like me 🙂