The Risk Fallacy: Paycheck vs. Business Owner

Business Brain, the show for entrepreneurs, episode 425 for Friday, February 17, 2023. Greetings folks and welcome to. Welcome back to Business Brain. Welcome to the family here where the show where we take a topic or a concept, we filter it through, apply our business brains to it so that we can learn and dissect more and get more out of it. Sponsors for this episode include hellofresh. We can go to hellofresh.com businessbrain65 use code businessbrain65 why to take 65% off your first box. We'll talk more in depth about how that works and why you're going to want to do it a little bit later here. For now, here in Durham, New Hampshire, I'm Dave Hamilton and in Lafayette, California.

I don't know why that's important, but I just follow your lead.

Yeah, I don't know why it's important either.

And share my, my location every week just in case anybody wants to know. I'm still here in Lafayette, California.

There you go.

Happy to be here.

Hey. So I was in Stamford, Connecticut, the day that I learned the meaning of the word curtailed. I was, I was taking, for a variety of reasons, which I'm happy to go into, but it would detract from this story because it would take too long. I was taking a semester off from college. I actually did go back after some of this, and now I'm on yet another break from college. But that's yet another story. But I got a gig as a contract worker working for Citibank. I've worked for Citibank two different times, two different divisions in my life. This was the first time a friend of mine had the gig as like a summer job and then he went back to school. I was not going back to school. He was like, dude, they want somebody. This is you. I was doing a lot of, essentially, I was a, in today's world, we would describe what I was doing as, as a, like the role of an executive assistant, like, you know, to use colloquial terms, a secretary.

Yeah.

Really what I was at the time, though, I was one of the few people on the planet that understood how to use like, desktop publishing software and, and create like, stuff, spreadsheets and forms and all those things because I was a computer nerd. So it was, yeah, so my, my skills were much valued in a different way than those same skills would be today just because they were, they were fairly rare at the time. And so I was doing some tech support for the department and, and some you know, a lot of like. Like presentation creation and things like that. But it was a great gig and all of that. They paid me really well. I think at the time I was making like 14 bucks an hour, which at the time was just like, you know, triple the minimum wage or something. It was great. You know, I got to work in an office. They brought lunch in every day. All this good stuff. Yeah, well, it was awesome. Until they started having budget cuts about two and a half months into my stint there. And I was the first one to see this memo that I then had to sort of distribute to the five kind of managers on my team. And it talked about how the services of a. Of all external contractors were going to be curtailed. And I did not know what the word curtailed meant, but I certainly knew that it applied to me because I was an external contractor. I was not an employee of Citibank. They were just paying me as a contractor. So I. I had to, you know, figure out what the word curtailed mean. And. And search engines were different back then than they are today. So it took a little bit of effort. But this is a very visceral memory because when I read what the definition meant, I understood that it meant my job was ending. And I didn't think there was anything anyone could do about this because, you know, the order came down from on high. And my interpretation was. Was correct. There was nothing they could do. My. My job did end about two weeks later, maybe three weeks later, I forget. But. But it was one of those things, was one of those moments in life where I realized, even though all the people that I worked for who I thought controlled my fate, right, like, you know, I was working for them, I liked working for them. I certainly liked the money that I was making. I was relying on that money, as most people who earn money do. And I was. I was doing everything I could to make my bosses happy and all of those things. And they were super unhappy about the fact that my services were going to be curtailed. But that didn't change anything. My services were still curtailed. And that lesson sort of resurfaces in my subconscious into my conscious mind pretty regularly because I think it's part of the reason that I wound up starting my own thing eventually. I mean, I didn't just go right out and start my own thing, but it was like, wow, like, all the people that I interact with want one thing, and yet someone else who I don't know and cannot talk with decided my fate, our fate, you know, and it was like, wow, this is, this is how this kind of thing works, isn't it? It was a really eye opening experience and it wasn't necessarily a good one, but it certainly was defining. It was, it wasn't a good one in the moment. I think in, in retrospect, it probably served me really well because it put me in the mindset of wanting to be in charge of my own destiny. Now that doesn't. You know, you're in business for yourself. I always say that just means you have many employers, not one. You still have to keep all of the people that. Well that you work for and that work for you, your clients and your employees. You have to keep everybody happy, otherwise things fall apart.

But at least you're spreading out that risk, right?

Well, and you're in charge. You're spreading out the risk. Yes, but I'm also in charge. If I'm keeping everyone happy, chances are I'm gonna have business and work to do tomorrow and I'll be able to make money tomorrow. Right there is that like serv. The customer is the point. Whereas in, in that scenario at Citibank, it didn't, it didn't matter that I served the customer beyond their expectations. Like, I definitely way outdid the guy before me and, and was just blowing everybody away. They were super happy with me. Changed nothing.

Yeah. I have lots to say about this.

All right. Yeah, yeah, yeah. Hey, that sound means I get to tell you about our sponsor for this week, which is HelloFresh. With HelloFresh, you get farm fresh pre portioned ingredients and seasonal recipes delivered right to your doorstep. You get to skip those trips to the grocery store and count on HelloFresh to make home cooking easy, fun and affordable. And that's why it's America's number one meal kit. And that's why we like it here at Business Brain, because it kind of combines all of those smart things. It makes things more efficient, makes things more affordable. HelloFresh now has 40 weekly recipes to choose from, so you can say bye bye to your recipe rut and treat yourself and your family to exciting new flavors every week. This time around, Lisa and I chose to do their pescatarian menu to see what that's like. One of the things on there is creamy shrimp and bacon spaghetti salmon limon. But if you're not into that, you know they've got like pork chops and apple rosemary pan sauce, zucchini and tomato flatbreads. If you want to go the vegetarian route. Fully loaded turkey taquitos. They've got great recipes and you can customize select meals by swapping proteins or sides or even adding a protein to a veggie dish. It's so easy to make. The instructions are super clear and it makes it fun because it instantly makes cooking collaborative, which is perhaps my favorite part about using HelloFresh. For you, go to HelloFresh.com BusinessBrain65 and use code BusinessBrain65 for 65% off plus free shipping. Again, that's BusinessBrain65 is the code to use@hellofresh.com BusinessBrain65. We'll put all these links in the show notes at BusinessBrain show as well. And our thanks to HelloFresh, America's number one meal kit, for sponsoring this episode. While we're here, have you ever wanted to eavesdrop on a mastermind of successful online business owners? Find out what they talk about and how their unique mindset differs from their competition? You know, because you're interested in the Business Brain, you might be interested in checking out the Masterminding Success podcast. Every week, Keith Wheeler and Nouria Corby come together to openly discuss all aspects of success, both in business and and in life. They cover topics from book publishing and affiliate marketing to how to make your business stand out in the marketplace and a whole lot more. So whether you're thinking about just starting an online business or you've been running one for years, Keith and Nouria will open your eyes to new and different ways to look at your customers and your business to better your chances of long term business success with the Masterminding Success Podcast. Our thanks to Keith and Nouria for doing this swap with us. All right, so what do you have to say, Shannon?

Yeah, so this is this paycheck fallacy that I've been really battling my whole life because there's this concept and, and if we can impact, you know, just even one person with this podcast with Business Brain, it's getting people to change their frame of that. It's safer to work for someplace else. It's safer to and more reliable to work for a big corporation and all that kind of stuff. All you're doing is shifting the responsibility to someone else for your own everything, you know, your, your own life, your outcome, the responsibility, whether you get, you get promoted or not. If what someone else deciding some black box committee, whether you get a raise or whether you get a bonus, all that kind of stuff. And that's, that's great for some people.

Yeah, no, it's a mindset thing. Right. It Is it's not safer, but it is more aligned with the type of person who wants that, or perhaps better said, less aligned with the control freaks like me. So, yeah, yeah.

This concept of many bosses I really love, and we've talked about it before, and it's. You're spreading out who pays you. You have all these people that are giving you checks. Right. And if something happens, and it will, what goes wrong with one person or you drop the ball or someone, you know, if your employees drops the ball, you don't follow through and you get fired by one of those bosses, well, you could have hundreds or thousands of other bosses that are going to pick up the slack. And that's the way to think that, wow, I'm going to go on my own and I have, you know, without a net and this kind of thing. You know, stay at your current business and start a company, you know, or go part time or figure out a way, you know, live off your spouse's money or her income or him, his income. Live well below your means while you're figuring this out so you have more resources.

I recommend living well below your means at all times if possible. If possible. Some people like, I mean, there's some scenarios where you can't. And I get that. I've certainly experienced that. I probably, I don't want to, but I probably will again someday. I don't know. Right.

You know, I think a really great example of this, I've mentioned him on the show before, is a guy who practices this fire concept, which is financial independence. Retire early. And it's Mr. Money Mustache. You can find it@Mrmoneymustache.com all right. And he has this, you know, he talks a lot about this concept of, you know, becoming a millionaire by not spending, you know, and, and saving your money for, you know, there's all kinds of different formulas, but maybe 10 years, but living on 40% of your income or something like that. But what that does, those concepts, they buy you freedom. Well, I shouldn't say freedom. Flexibility. To go start something like this and to eliminate this. You know, we talked about Bewaring the onces. You know, once I have this, I can start a business. Once I, you know, do this, once I learn this. No, no, you just got to go figure it out. Chances are very good that whatever you think you're going to start is going to turn out different. But as you grow something from a side hustle, perhaps into a business, you're just spreading out all that risk to all these different bosses and there's not going to be some corporate, you know, wonk that's going to decide that, oh, it's time to curtail all these people, and you have no control. So that framework, if we can push that, you know, and because it dramatically changed my life once I understood it.

You know, as we're talking about this, I think there were two things that shocked me here. The one is that I, Which I already shared, that these people that, you know, this came down from on high and. And it's like, well, holy crap. Like, I have no control over this. The people around me have no control over this. The thing that also surprised me and perhaps more importantly, more meaningfully, was how the folks who were just in the corporate system, my bosses there, if you will, just accepted this. Like, no one said out of their control. Yeah, right. Yeah. But like, one of them, like the head of our department theoretically could have pushed upward a little bit and said, hey, you know, I know that that's. That this is the thing, but this, like, the department relies on this role being filled. We're currently filling it with a contractor, but maybe we should, like, put this out as a. As a. You know, like, maybe we should hire this person and actually create this job in the system instead of just sort of filling it haphazardly. They did not. And that part really shocked me. It was like, oh, what? They're not going to fight for me? Like, this is crazy. They're just going to take it and.

Been beat down, man, and.

And they're going to suffer because of this. It's not like they're going to replace me. Like, this is. This is a very, you know, like, they all relied on me and the guy before me. Right. Like this. This had been going on for six, eight months. And they were like, yeah, well, just have to do. Do without.

What?

Yeah, that's insane. Yeah, that part used to.

It. They've been.

I know.

Condition. Their framework on the whole concept is, oh, well, other people make these decisions. And that just means I have to kind of go along and figure things out. And, you know, that it. It blows my mind as an. As an entrepreneur that that's acceptable. Because, you know, as entrepreneurs, we've often had to fight to figure out how to keep a certain key employee.

Right.

Or keep a contract. We're like, okay, well, I mean, there's been plenty of time in my life where I'm like, well, you know what? I'm going to make less money because this person needs to stay. And in the long run, I'll make more money. But right now, I'm going to lessen what I'm taking out of the business to pay their salary.

Not a single person, I guarantee you. And I don't fault these people for this. They were trained this way. Right. But not a single one of them thought, you know, if each of us, like, there's five of them, so if each of us gives up $3 an hour, we could keep this guy and make our lives way better. But no, I mean, and again, I don't fault them, but no one thought that way.

No, they don't think that way.

No.

Yeah, no, this is. This is the. This is the message right here that encapsulates. The whole reason why I do this podcast is to get this mentality and this framework out there. Because, you know, yes, lots of small businesses fail, but, you know, tons of them succeed as well. And I guarantee you, you will fail at some things, but you're. The journey is going to be so much more rewarding because at the end of the day, when you're sitting there, you're impacted by the decisions that you made, not someone else or some committee or this kind of thing. And I highly recommend it.

Yeah, Yeah.

I think you'll love the process. Let us know what you think about this. This framing feedback at Business Brain show.

And if this conversation triggered something in you that, that you remember, like a moment you can point to in your life or in your career, whatever that that is, was pivotal for you. Because this one definitely, like, it keeps coming up for me. So I know that it helped define my outlook and really set me or at least nudge me toward the path that I was wound up taking. If you have one of those moments, share it with us because we'd like to share it on the show, too. Feedback BusinessBrain Show It's a lot of fun doing this. We love hearing from you. We love being able to do this with you. It's amazing. Keep living that charmed life, and we'll see you next week.