should you ever be a W-2 employee

Summary

the online business world has decided that anyone with a W-2 is settling. that is a lie sold by people who need you to buy their course.

the honest version, after 12 plus years on both sides:

1. know yourself first. I struggled inside the Air Force chain of command because I want autonomy and speed. somebody else thrives in that exact structure because they want clarity and predictability. neither answer is better. they are just different people.

2. entrepreneurship is not lower risk. the marketing says it is. the reality is the opposite. revenue swings, team payroll, the constant decision load, the lack of an off switch. the W-2 trades upside for stability. that trade is the right one for a lot of people.

3. compartmentalization is easier with a W-2. the 5pm shutdown, the weekend that’s actually a weekend, the brain space to be present at home. you can build that as an entrepreneur but you have to fight for it.

4. the grass is not greener. the romanticized version of entrepreneurship is a sales pitch. fulfillment comes from doing work that matches who you actually are, not from the box on the W-2 line. pick the path that fits your wiring, not the one that sells the most courses.

Transcript

introduction to the dilemma between being a w2 employee and an entrepreneur

The most impactful business is the business that genuinely improves another human, a better human business. And to grow a business like this, you have to continually improve yourself. This podcast is a documentation of that thesis, scaling businesses and also personal growth. My goal is for you to shortcut this journey.

So if you’re ready to try hard, subscribe. If you like what you’re hearing, please share and enjoy. Is being a W-2 employee bad? And should everyone be an entrepreneur? This is the Better Human Business Podcast. I’m Jerred Moon. And I get asked this question in different forms, right? I have multiple employees.

They listen to the podcast. And my podcast, my business partners podcast, it’s all about making opportunities for yourself, being an entrepreneur, all of these kind of things. And so a lot of our employees look at, okay, maybe I should be an entrepreneur because my bosses are entrepreneurs and they think that it’s, you know, this life changing path.

personal anecdotes and insights on personality alignment with career paths

And then I have a lot of friends who have W-2, high paying W-2 jobs out there doing different things. They’re not entrepreneurs and they kind of think the same thing. Maybe I should go down this path. And so I want to talk a little bit more about whether or not you should and whether or not I think that it’s bad to be a W-2 employee.

So let’s hash this out. The first thing I want to mention is you have to know yourself very well. You have to know yourself very well. One thing that you might not know about me is I was in the military for a number of years as a military officer. What you don’t know is that before I joined the military, when I told my parents that something I wanted to do, my dad was a military officer for 20 years, they had concerns.

They had legitimate concerns about me going in the military mainly because they knew I had a problem with authority. I just always have. I don’t like people being in charge of me. I don’t like people telling me what to do. And whether or not that, you know, some ego based thing, I don’t know where it comes from, but it doesn’t have to do with I need to be in charge.

I need to make the decisions. I just don’t like inefficiency. I don’t like it when people won’t let you be efficient or run with new ideas or have freedom and autonomy to try new things. I don’t like that. I don’t like being controlled when it stifles me being able to work at a higher capacity. And sometimes that’s what I’d run into as a boss.

And I ran into that several times in the military. Several times I ended up with a boss I did not like or respect. I did not think they were very smart. I did not think that they were very efficient. They wouldn’t let me do things my way. But it never ended up being a problem because I knew how to play the game.

analyzing the entrepreneurial appeal versus the structured employee pathway

I knew how to play the game. I knew how to be the good officer I needed to be, but I oftentimes might not have loved the person I was working for. Now, that wasn’t always the case. So it’s not just like this ego thing. If I’m not in charge, I’m going to hate you. I had several leaders and bosses who I wish I could have worked with forever because I respected them a great deal.

They let me be innovative. They let me be efficient. They let me tackle things on my own. They gave me autonomy. So I’ve also had a lot of great leaders. But more often than not, I was stuck with people not that way. And it always made me really appreciate the people, you know, the leaders I had when I had them.

So you have to know who you are. If you are like me to where you really want to do things your own way, you want to move fast, you don’t want other people to slow you down, then yeah, maybe entrepreneurship, you’re more geared towards that. But it doesn’t mean you have to be an entrepreneur. It just might mean you need the right team, the right leaders, because some W-2 employees are going to work really well in a large corporate environment, right?

And so think about an IBM, or if you’re working for like, I have a lot of friends who work for like airlines now. It’s very similar to the military. There’s a system. There’s the process. Here’s how you do it. Here’s how you can be good at becoming this W-2 employee. Some people really thrive in that.

But some people might thrive in a smaller entrepreneurial organization like the ones I run now. We’re not these massive, you know, companies with all these systems and processes that are like essentially red tape. You know, we try and eliminate all those, all the inefficiencies in our business. So that’s something that you have to take into account is where you think you’ll thrive.

Now another conversation I had recently is I actually had someone who was talking about being an entrepreneur because they wanted to eliminate risk. I’d never heard it put this way before. They thought that being a W-2 employee was risky because the person in charge holds all the cards. They can fire you in a moment’s notice.

guidelines on how to choose the right path based on individual preferences and risk tolerance

They can change your pay, which, I mean, most bosses aren’t just going to randomly change your pay, but maybe they can cap you at how much you can earn, all these kinds of things. That was seen as the risk. And so this person wanted to go more down the entrepreneurial path. But I was like, well, I guess you’re right.

I guess there is some risk in being a W-2 employee if you look at it that way. But there’s a lot more risk in being an entrepreneur. And I think that’s where people need to realize there is a ton of risk and that risk weighs heavy on the mind of an entrepreneur. So in saying that, the first thing, know who you are.

Do you think you’d thrive either in a small team, running a small team, if you do think you want to be an entrepreneur? Do you think you would thrive in that kind of environment? Or are you more corporate? I just want to follow the rules and get my work done. If that’s you, you probably aren’t suited to be an entrepreneur.

I’m not saying you can’t be. You just might not be suited to do that. I was good at the military. I was not suited to be in the military. It was just, it does not fit my personality type, especially with who I kind of am now. So the first thing is know who you are. Now the second thing is know what you want from your life, going back to that risk and how it weighs on your mind.

One thing that I loved when I was in the military is how much I was able to compartmentalize my life. Like I could leave work most of the time, not all the time, depending on what we have going on, but I will say most of the time, and I could just shut it down. I did not have to think about work anymore when I was off.

I could just be off. A lot of times you might have work that you can’t actually take home with you. And so it was just done. And I could fully focus, I mean 100% focus on my family or whatever else we had going on at home. It was just that way. I actually really enjoyed being able to compartmentalize my life that much.

closing thoughts on embracing your career choice with confidence

I have a lot of friends who are in the military or they’ve recently left and they are able to compartmentalize like that. And I think it’s phenomenal. I lost all that once I became an entrepreneur. It’s always running in the back of your head. Now there are periods where I am able to be like, hey, work is work, I’m done, and we’re good to go.

And I have long periods like that. But when something comes up, there’s a significant challenge, there’s a huge hurdle, obstacle, you kind of get punched in the face, something bad happens in business. I wish when something really bad was happening in business and I had to fix it, I wish I could just be like, you know what, nope, compartmentalize, shut that down, don’t have to worry about that till tomorrow.

But you don’t actually feel that way. You can ignore a problem, but it’s still going to be in the back of your mind. You can do your best to be present, but it’s going to be in the back of your mind. And this is something I don’t think W2 employees who’ve never truly been an entrepreneur realize and it’s one of the prices you pay for being an entrepreneur is that we can’t compartmentalize.

Vacations are very different in our mind, trips are very different in our mind, time off is very different in our mind. It’s very, very different. And so what kind of life do you want to live? Do you want to live the life where you can just completely compartmentalize, shut off, go focus on your hobbies, go focus on your family, and then when you’re at work, do work, but you don’t have to think about it much outside those things?

Really think about that. Because I think that there’s this idea of entrepreneurship that has kind of been romanticized and that everyone should be an entrepreneur, but I don’t believe that. I think about these things for my kids, you know, two major things I’ve done in my life was one, military service, and two, being an entrepreneur.

And then I think back and I’m like, do I want these things for my kids? And part of me is yes, and part of me is no, okay? And this is in both of those categories. Do I want my kids to serve in the military? This could be a completely different set of podcast, but part of me is like, hey, there’s a lot of good that came from the military, but then I’ve also seen the negative side of the military from death, injury, PTSD, nightmares, all these things.

Not for me, not what I, I did not suffer from any of those things, but you know, friends and family members who have, and I’m like, well, I don’t know if I want them to go down that path. And then not quite as stark, but same thing with entrepreneurship is I have a really good bead on entrepreneurship now.

Like I have managed my life very well and my mindset, but there was a lot of grind to get through that. I’ve also seen a lot of entrepreneurs end up in divorce, end up bankrupt, end up with all these kinds of problems. So me having to answer those questions, do I want these things for my kids? I don’t know.

You know, I don’t really know if I want them to be entrepreneurs. What I think is awesome about an entrepreneur is if you can get through all of that, there is a certain level of financial freedom and time freedom that comes with it. But ultimately, if you really focus on what you love and what you want to do, you’ll keep working, you’ll keep working and you’ll keep working.

I don’t want to stop working. I enjoy my work so much. I think if you can get to that point as a W2 employee where you actually enjoy what you do, then it doesn’t really matter. I think as long as you’re happy with how your life is going, the income that you make, if you’re happy in all those areas, then you have to decide if it’s really worth it.

But just know the grass is not greener on the other side in being an entrepreneur. I’m talking to all the W2 employees right now. The grass is not greener. If anything, the grass is dead and you have to figure out how to water it. And you know how to water it? You’re going to probably have to dig a well and then after you dig the well, you’re going to have to pump the water out and then you can start watering the grass and turn it green.

When in reality, you might already be on green grass right now that someone else is watering. I know that was a deep metaphor on grass is greener on the other side, but that kind of is the difference. I think a lot of people think they want to be an entrepreneur, but when the rubber meets the road, they don’t really want to be an entrepreneur.

They want to enjoy their hobbies. They want to enjoy life. They want to, and I’m not saying entrepreneurs don’t enjoy life, but those are the things that they primarily want to do and that’s fine. So I’m going to end with, do I think I could be a W2 employee again? And I think the answer is yes. I don’t have some ego thing where I have to be an entrepreneur.

I have to be in charge. I think I absolutely could be an entrepreneur, but it would have to be, I mean a W2 employee and not be an entrepreneur, but it would have to be in a small team where I am provided some autonomy. I can make decisions and I can move fast and I’m working for someone I respect.

I think if all those boxes are checked and my income I think is fair to the amount of work I put in and the value I provide to the company, then I think I absolutely could be a W2 employee again. And so I think there’s nothing wrong with being a W2 employee at all. Obviously we’ve hired lots of W2 employees.

I respect all my employees. I think what all they’re doing is great, awesome, and you do not have to be an entrepreneur. And I’m not making this podcast to try and get my employees who might be listening to this to not be entrepreneurs. If they want to be entrepreneurs and I have some employees like this, I’m going to foster that.

I’m going to train you and teach you so you can go do your own thing. But it’s kind of like, I know what’s on the other side, so I want to prepare these people to the best of my ability, but it’s like, just make damn sure that’s what you want. Make damn sure that’s what you want to be an entrepreneur.

Like it is taking a lot of time, you know, over a decade to get where I’m at and it’s been a lot of work, a lot of hours, and a lot of people aren’t scared of the hard work, but just know that it absolutely changes who you are. Like you won’t be the same person again, and for some people, that’s a good thing.

I feel like I’ve made a lot of, so many positive mindset shifts really through mentorship. Through mentorship has gotten me to the place where I am now, but I don’t think that happens for every entrepreneur. I think a lot of entrepreneurs, it can end up ruining your psyche if you don’t have, you know, group or mentorship to help you guide you through all these tough things that entrepreneurship are.

So I absolutely could be a W2 employee again. I think W2 employees are awesome. And I think that if you want to be a W2 employee, don’t think that there is this glamorous, you know, lifestyle of the entrepreneur. Work is work. I have business partners. Sometimes having business partners feels like, you know, being in a W2 employee again, because we all have to task each other with things and we have to get things done on time.

You can’t just do whatever the hell you want. So I wouldn’t romanticize it. I think being a W2 employee, there’s nothing wrong with that so long as you are happy, right? That’s all that matters. Know what life you want to live and whether or not you want to be able to completely compartmentalize or not.

Know who you are. Can you respect who you’re working for? Do you have to be a person who makes decisions, moves fast, have to be efficient? Start answering some of these questions to truly decide if you think you want to be an entrepreneur. Because I know so many people who think they want to be an entrepreneur, but if they were to truly have that rug pulled out from underneath their feet and it’s, you are in charge now, you have to make every decision and you have to make all the money for your family.

If you don’t make that money, they will not eat. What are you going to do? And I don’t think a lot of people really want to do that. They like the idea, but they don’t really want to go down that path. And guess what? That’s okay. That is okay to be a W2 employee. There is not like some nobility in deciding to be an entrepreneur.

It’s just a different route to earn income. That’s it. A lot of entrepreneurs only ever get to making the same level of money that they made when they were a W2 employee and it takes them five years to even get to that point. And the only real thing that they’ve achieved is maybe they get to do more of what they like to do as far as work is concerned.

Maybe they’re working in an industry that they’re now passionate about and they weren’t before. And they’re the boss. And for some people, that’s a good thing. And for some people, that’s a bad thing. So you have to really know yourself and what you want out of life. There’s absolutely nothing wrong with being a W2 employee, even though I talk so much about entrepreneurship and building a life that you want.

I think that it’s different for every single person and you have to know what kind of person you are and what you’re capable of. But ultimately, if you’re going to go down this path of being an entrepreneur, well, you’re going to have to try harder.