Why Entrepreneurship is NOT Necessarily the Path to True Freedom

Why Entrepreneurship is NOT Necessarily the Path to True Freedom

It’s estimated that over 60% of employees are unhappy with their work.  This makes sense when you listen to people talk about their jobs.  Many employees are overworked and underpaid.  

The “mutually beneficial” relationship proposed by both employers and employees during the interview process too often seems to be a relationship in which employees work just enough to not get fired and employers pay just enough so that the employees don’t quit.  That’s a vastly underwhelming compromise for a place where we spend the majority of our waking hours.

Because of this, some employees reach a breaking point and begin to think that entrepreneurship is their solution.  Most of us are familiar with that disgruntled coworker who upon their departure from the company says something like, “I’m out!  I’m going to work for myself and start my own company where I can be my own boss, determine my own worth, and set my own hours.”

While this sounds great in theory, most profitable entrepreneurs are working far more hours than most employees and they're doing it with far less security.

Before going any further, let’s address what a profitable entrepreneur is and what an entrepreneur is not.  A profitable entrepreneur is someone who is earning a living and paying for their life by owning and operating their own business.  An entrepreneur is not someone for example, who has an idea for a business or works in their family business or has an LLC, and then refers to themselves as an entrepreneur on their Instagram, Facebook, Tinder, or LinkedIn profiles, the way a large portion of “entrepreneurs” do.

Now that we’ve addressed that, let’s address why entrepreneurship is not necessarily the path to true freedom.

Robert Kiyosaki is the author of the best-selling personal finance book of all-time “Rich Dad Poor Dad.”  In the book, Kiyosaki refers to the Cashflow Quadrant, a term he coined and also the title of his second book.

The Cashflow Quadrant is broken into four parts; the employee who has a job, the self-employed entrepreneur who owns a job, the business owner who owns a system, and the investor.  

We’ve already addressed the employee, they have no freedom.  

The self-employed entrepreneur has the freedom to do what they want, ideally being a profession that will make them money, but their time and income are often limited by their own expertise and output, and they’re shackled to the expectations of their clients and customers.  

This is exactly why entrepreneurship is not necessarily the path to true freedom.  But entrepreneurship can be a stepping stone to true freedom.

Entrepreneurship can be a stepping stone to true freedom because if the self-employed entrepreneur puts the right systems in place, they can eventually become the business owner who owns a system that makes them money.

The last part of the Cashflow Quadrant is the investor.  The investor can come in many forms.  Someone can become an investor by working their way through all four parts of the Cashflow Quadrant.  Someone can also become an investor by skipping parts of the quadrant, say for example an employee who makes enough money from their job to invest and eventually live off of their investment earnings.  Ultimately, the investor has true freedom because they have finally reached the point where their money is working for them rather than trading their time for money.

So the next time that you hear a dissatisfied coworker say “I’m going to work for myself and start my own company where I can be my own boss,” know that it may not be quite the true freedom that they’re looking for.  In fact, oftentimes it’s the opposite.

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