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Is it true that you will never become rich as an employee? |

The Budgetarian

Is it true that you will never become rich as an employee?

FQ (Financial Quotient) - Rose Fres Fausto -
Is it true that you will never become rich as an employee?
Look around you. Among the people that you personally know, how many among them are rich employees? How many are rich business owners?

“You will never become rich working for others!”

“Jobs are for losers!”

“Be your own boss!”

These are the buzz words that are fed to us making it look like a 9-5 job is the most boring and dreadful thing to do. If you search online to find out who said this, you’re likely to see Robert Kiyosaki of the Rich Dad Poor Dad fame.

Admittedly, I read a few of his books. Needless to say, I enjoyed the first one that made me buy the next and the next. How I bought the first book was actually accidental. Back when the boys were young and sunduan from school was a challenge, I would sometimes get myself dropped off in a mall to do errands and my favorite store to wait in was National Bookstore. I usually ended up buying one book for each family member. One time, I was in a rush because I already got a call that the car was close by. I had to grab one last book – for my husband. I saw the title "Rich Dad Poor Dad" and I thought it was about parenting for fathers, so I got it. I actually enjoyed reading the book and even bought a few of the next ones. Later on, I found it a bit stretched, and then I learned about the character of the author. There was no documentation about the existence of most of his successful businesses narrated in the books and so with his “rich dad.” Moreover, he has been facing numerous lawsuits.

But Kiyosaki is not the only believer of this. So, is it true that you will never become rich as an employee?

Look around you. Among the people that you personally know, how many among them are rich employees? How many are rich business owners?

In my case, I personally know many rich employees. Over the years of observing how people deal with money, I notice that accumulating wealth can be done through both paths – employment or owning your own business. 

I wish that we stop believing and propagating this nonsense that you can never be rich by “just” being an employee. Inasmuch as I want our youth to be entrepreneurs and experience the exponential rewards of it, I don’t want them to jump unprepared, thinking that it’s the only path to become rich. Here are some points worth pondering upon.

1. Living within your means. The only way to accumulate wealth is to spend within your means and it is best if you practice this as soon as you start working. When you are an employee, your stable salary allows you to practice this more easily and regularly. When you are an employee, your stable salary allows you to practice this more easily and regularly. Compare this to a gig person putting up his first business. If he starts earning a lot at the get go, the high earnings become his anchor of what he can afford. If the following year or even months become slow, it would be hard for him to adjust his expenses.

2. Pay yourself first. As a continuation of the first point, an employee has an easier time observing this first basic law of money. In fact, he can maximize and automate his saving and investing without worrying about the source since his income is fixed. A gig individual would need more vigilance to do this.

3. Low success rates for new businesses. Generally, success rates of new businesses are at 10% to 20% over the long-term. In the Philippines, statistics prior to COVID-19 show the following closure rates for new businesses:

a. 20% fail by the end of the first year
b. 50% fail by the end of the 5th year
c. 80% fail by the end of the 10th year
(Source: Click link

4. Missing the head start in regular saving and investing. If you start a business straight out of college, you generally have an 80% chance of failing (see no. 3), which might make you miss the bus of continuous saving and investing right from the start. If you want to see the cost of missing the early years of saving and investing, read last week’s article "What is the Cost of YOLO-ing?" Even if the reason for missing the early years is not YOLO-ing but hustling as a business owner with unstable earnings, you may benefit to see the actual numbers in the article.

5. One path is not superior to the other. Some people are wired to be employees while some are best suited to be entrepreneurs, so we cannot say that accumulating wealth by being an employee is better than doing so as a business owner, and vice versa. It is best to know yourself well and see how you thrive. This is why it is important to have internships while still a student. It does not even have to be a formal one similar to those required by some college courses. Summer apprenticeships with people you or your parents know will be helpful.

6. Know your Ikigai. To continue the previous point and borrow a Japanese philosophy, know your Ikigai – the intersection of that which you are fond of, good at, you can earn from, and the what the world needs from you. When you do, figure out how best you can follow it – is it by being an employee or a business owner or both?

7. Have an entrepreneurial mindset regardless of the path you take. An entrepreneurial mindset is being resourceful, resilient, and solutions-oriented. You are bound to succeed and become rich if you continue to have this as you will always seek knowledge, be curious and creative, applying critical thinking to your work and calling. 

8. Look around you to know what you already have.  It might be because of our loss aversion (our tendency to weigh losses twice as much as we weigh gains) that makes us focus on what we don’t have. Bear in mind that most of the time, we already have what we need in order to live a meaningful life. Let us train ourselves to look and appreciate what we already have and start from there instead of starting from the scarcity of mindset, focusing on what we don’t have. An example is a child who resists joining a family business because the work outside it seems more exciting and less restricting. Although it is good to explore what’s outside, remember to not overlook what you already have. Instead of complaining that the world is not fair, use your own “unfair advantage” to reach your goals.

9. Know what being rich really means to you. Being rich is not so much about having a certain amount of Net Asset value (Assets minus Liabilities) because this number is different from one person to another. In our FQ Workshops, we teach our participants to know their Values-Based Goals very well because fulfilling them is the only way they can be truly rich. If you are aware of what you really value in life, then you can use money as a tool to help yourself achieve and live them. Consequently, you will figure out what path is best suited for this life – Is it by being a business owner or an employee? 

I hope that the above puts a stop to the wrong advice that you will never get rich as an employee. After pondering upon the nine points, you can now determine which path is best suited for you to live your desired life. 

Cheers to High FQ!


1. Take the FQ test now to see where you are in your High FQ Journey. 

2. If you want the help of FQ Mom in taking the test, click here

This article is also published in
Attribution: Images from iStock, Bigstock

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