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Don't quit your job until you understand all the benefits of working for someone
else. Yes, there really are benefits.
What is included in each paycheck covers items that most people aren't even
aware of. Take your current salary and add 20-25% to it. That's how much the
company is probably paying for you. For example, if you earn $40,000 a year,
they are actually paying closer to $50,000 a year for you. The additional
$8,000-$10,000 goes to payroll tax, health insurance, disability insurance, life
insurance, unemployment tax, 401k contributions, payroll services, and even down
to your desk space. If you decide to become self-employed, you will need to earn
at least $50,000 a year in profits, to justify the switch.
It is not unheard of for a family of 4 to be paying $2,000 a month just to
health insurance. In certain states, you can just be outright denied for
individual insurance. Can you afford to pay for your own benefits, at least in
the short term, before your business begins generating income. Though most
self-employed individuals are older, its actually best to be young. If you are
young you have fewer obligations, your personal expenses can be very low, and you
might be more willing to go without health insurance. The rising cost of health
insurance has become one of the top complaints of self-employed individuals and
small businesses.
The nature of being self employed is taking on risks. Are you willing to lose
all the money and time you put into your business? If you stay up at night over
a $100, opening your own business might give you a heart attack. Unlike a job,
you can't walk away from your business easily, you will have obligations, such
as a lease. If your business isn't profitable you might have to use your
savings, or borrow to pay the rent. You don't have to spend any money for a job,
your employer pays you.
Do you have the motivation or the confidence to be your boss. You must be a
self-starter, so if you tend to wait till someone tells you what to do, then you
should re-evaluate your motivation before jumping into self-employment
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