Why “Follow Your Dreams” Is Dangerous Advice
Personal finance used to be about basic money management skills like building an emergency fund, paying down debt, and saving for retirement. In recent years, personal finance writers have obsessed over the idea that you need to find a way to quit your 9–5 job ASAP.
If you work a 9–5 job (like me) and feel like you are somehow “doing it wrong,” I have a very important message for you.
Working a 9–5 job does not make you a sucker, it makes you responsible. Your first duty in life is to take care of yourself and the people who depend on you. If your job allows you to do that, don’t let anyone make you feel bad about your choice.
In this article, I will review why “follow your dreams” is not only bad advice but dangerous for many people. I also discuss how I use my side hustle to slowly move towards a financial position where I could one day turn my “dream job” into my full-time occupation.
The most important question before quitting your job to start a business
If you feel serious FOMO because you are working a job, you might be considering quitting your job to “follow your dreams” of building a business doing something you love.
If you are considering that, I want you to honestly answer a simple question.
How financially and emotionally devastated would you be if that business failed?
Because that is the most likely outcome.
The reality is that the vast majority of businesses fail. Even if you have a brilliant idea and give it everything you have, the most likely outcome is that the business will fail, and any money you invested will be gone.
If the business failed, what would be the impact on your finances and your emotional well-being?
The answer to that question will tell you if pursuing full-time entrepreneurship is a good idea for you.
Life is a series of trade-offs
Every choice you make has an opportunity cost. Every choice you make in life will result in a trade-off between three variables.
- Time (there are only 24 hours in a day.)
- Your emotional well being.
If you work a 9–5 job, you are trading at least 8 hours per day in exchange for a stable paycheck. If you don’t like your job, that trade can feel pretty painful, which reduces your emotional well-being.
If you don’t find any fulfillment in your work, then quitting your job and starting a business sounds pretty great.
Being a full-time entrepunuer involves a trade-off between the same three variables.
Many people believe that the trade-off for starting a business goes something like this. You trade in time and money upfront for an immediate increase in your emotional well being and future increase in money and time once the business becomes profitable.
That assumes the business becomes profitable one day.
Here’s how that trade-off looks if you quit your job to go all-in on a business and it fails.
You lose everything; time, money, and emotional well-being.
When it’s okay to risk losing everything and when it’s not
Losing time, money, and emotional well-being may be an acceptable risk depending on how much that would impact your life.
If your financial situation is strong enough that you could easily recover from a failed business, then the impact of a failed business on your financial security and emotional well-being would be small.
Some situations where this might be true include;
- If you have a spouse who earns enough income to cover all your living expenses.
- If you’re young, single, and go into the process, knowing the business might fail.
- If you have enough income from investments, family money, or a side hustle that would allow you to keep paying the bills if the business failed.
On the other hand, if you are the sole income earner in your household and have kids, then the impact of that business failing would be absolutely devastating to your family's financial security and emotional wellbeing.
Most Entrepreneurs Aren’t Brave, They’re Rich
We are as fearless as our financial position allows us to be
How I’m splitting the difference
There is a third option between only working a 9–5 and having a business, which is to do both.
That is what I’m doing, and the trade-off between the three variables looks something like this.
I am trading a lot of time in exchange for a lot more money.
I would say the impact on my emotional well being is natural; the extra time it takes to work a full-time job, and a side business is about equal to the satisfaction I get from nearly doubling my income.
I should add that this trade-off only works because the time commitment for the side business is limited. I run a digital business with a limited amount of customer service. That means I have complete flexibility about when, where, and how long I work.
If my side business had rigid hours or had to be done at a particular physical location, I would not be able to pull this off. The time commitment would be so great that it would seriously drag down my emotional well being.
These tradeoffs are fluid
Remember, whether you choose to work a full-time job, start a business, or do both, there will be a trade-off between the three variables.
- Your emotional well being.
The right decision for you at any given time is the one that maximizes your happiness based on the trade-off between these three variables.
The final thought I will leave you with is that you shouldn’t trick yourself into believing that whatever you choose today is locked in for the rest of your life.
If working a 9–5 job maximizes your well-being today, who’s to say that will still be the case in 10 years? If your financial circumstances improve, you might better equipped to withstand the loss of a failed business.
That is why it’s important to continue reviewing the trade-off between your time, money, and emotional well being as your life changes.
If you enjoyed this article, you can catch up on my top-10 articles here.
This article is for informational purposes only. It should not be considered Financial or Legal Advice. Consult a financial professional before making any major financial decisions.