The spectrum of earning a living
I follow an entrepreneur named Amy Hoy on her website, Stacking the Bricks.
She sent out an interesting e-mail that describes the "spectrum of earning a living."
She challenges the idea that you have to choose between being a W2 employee and being a product entrepreneur earning passive income.
This isn't true, and it's more like a spectrum.
A 40 hour per week W2 job is pretty much selling time for money.
Freelancers usually get paid hourly, albeit a little more per hour and have more control over their schedules.
Consultants tend to offer higher value services, and aren't necessarily correlated with time. A $100,000 project can take a month for example.
A product business succeeds based on the merits of the product and the company, not how much time you spend on it.
I like the idea of the spectrum because people often reject the idea of going 1099 because they think it won't give them freedom. You still have a client and you're still mostly doing the same job so what's the point?
Well, it's a step in the right direction. You get paid more and get more autonomy. With extra time and resources, you can build another business or cash that in for things you just want to do for fun.
I remember after I left the Navy I had a bunch of business ideas to get the mythical passive income that will allow me to effectively retire.
One of them was cat pajamas. Yes, cat pajamas. No, not pajamas with cats on them. Pajamas that cats wear!
[As a side note, I think that would be successful today in the Instagram/TikTok age but at the time, my friends and my girlfriend now wife ridiculed me and I shamefully put it aside.]
But it's very difficult to actually get a product biz off the ground from the start. And if you try and fail or make very little progress, you will get discouraged and may abandon the entrepreneurial path entirely!
However, it's much easier to get a freelance gig. Getting paid outside of your W2 job feels great! And it encourages you to keep going, step by step.
So if you're interested in starting your own business and are dissuaded from going the 1099 route just because it's not a "real business," I think you should reconsider.
If you could take Fridays off and make 25% more income per year, how would that impact your life?
Because that's a very realistic outcome if you convert your job to a 1099 gig.
Don't think "all or nothing." Think in steps and phases.
PS: If you are a cat lover and TikTok influencer, I'd be interested in co-founding a cat pajama business with you. Please e-mail me .
Want the full playbook? Check out Going 1099.