In financial terms, the necessity of feeding and sheltering each new human being with housing, corn, and corn-feed animals can be associated with a debt in the sense of a liability that must be either paid for or paid off lest the person starve.
Since starvation of food or at least the newest iPod is a frightening proposition at best, most elect to find jobs. You could conceivable grow your own food by yourself, which is no mean feat, but nobody can make their own ipods, and so wage-employment is the preferred strategy to such an extent that no other venue is seriously considered.
Due to base risk of starvation, risk is preferably transferred to the employer as if they are somehow more safe than striking out on your own, as if. I think recent history has shown that employment is no guarantee of safety.
The problem with entrepreneurism is that income is seldom immediate. A business needs assets and inventory to leverage the work and the former two do not appear overnight.
This means it takes some time before one is ready to sustain one’s debt to life, which was mentioned above. One way to do so is to save up a war chest designed to pay one’s fare until the business is capable of doing so. Such a war chest can be substantial or it can be small. If it is substantial it may never be established, so this leaves a small war chest.
The key to having a small war chest is to have a low overhead. This means low cost of living. Low cost of living is directly equivalent to time. It is therefore key to establishing a successful business. You may think of business success as playing the lottery with the number of lottery tickets being determined by work effort and the work effort being determined by time and obviously effort(*).
(*) Lottery tickets just indicate the uncertainty. If you have certainties like networking, say your dad used to be the president, or you’re a 10 on the 10-scale, you will have certain advantages in certain directions, eh?
The ultimate war chest is obviously financial independence. With financial independence, it makes little sense to share your profits with your employer unless working for someone else somehow allows you to work more efficiently than you would be able to on your own.
See the 30 day challenge in the right sidebar for how to very likely significantly reduce your expenses, even if you’re already pretty frugal.
Originally posted 2009-11-11 07:28:32.