Working From Home and Loving It: The Myth of Financial Insecurity

Last week I had some people disagreeing with or at least questioning the underlying argument of my post on the “myth of isolation”, one of a series on working from home and loving it.

In response to one of those comments, I explained that I had been using “myth” not in the sense in which it is often used these days, that is of a fable, or a story that is simply untrue, but rather in the sense (from MS Encarta no less) of “a narrative that through many retellings has become an accepted tradition in a society”.

But while I am happy sticking to my guns about the myth of isolation, I know too that I have been putting off writing this next post in the series, on the myth of financial insecurity.

The little voice in my ear was saying “How can you seriously claim that, for people working from home, financial insecurity is a ‘myth’? Surely if you have your own business from home you are going to have less financial security than your next door neighbor who heads off each day to her well-paid job, with health and other benefits, in a major corporation.”

No doubt.

But we know that that picture can change. And is changing for many, at a much faster rate than any of us can afford to be complacent about.

The trouble is, we humans often take time to adjust to changes in our circumstances. When we apply that to the job market, we know that in some economies in relatively recent history there used to be what amounted to being “jobs for life“. As long as you showed up each day, kept your head down and did your job, you could expect to be there till it came time to retire. It can be hard to get over that mental conditioning.

So let me be very clear here. I’m not saying there is no financial insecurity involved in having a home based business. There is financial insecurity in any business.

I am saying that the level of financial insecurity inherent in having a home based business needs to be put in perspective and weighed against the financial insecurity – in the contemporary economic climate – of what used to be called “a steady job”.

Yes, part of us might still be yearning for the return of those “good old days”. But our conscious mind knows that, right now, you don’t have to look far, whether in mainstream media or online, to see that whatever field you are in that idea of a job for life is as dead as the dodo.

Under the heading Huge job losses signal a shrinking economy, the Christian Science Monitor Global Credit Crisis Blog this weekend spelled out some of what the deepening recession means in terms of the US job market:

The latest evidence of the intensifying economic storm came on Friday when the Labor Department reported that the economy shed 240,000 jobs in October, the second worst month of the year – after a revised loss of 284,000 jobs in September. The nation’s unemployment rate looked even more dire, skyrocketing to 6.5 percent in October, up from 6.1 percent in September and the highest level since February 1994.

It’s worldwide. For example, as the BBC reported last week – China job losses prompt exodus – tens of thousands of migrant workers are crowding the rail system as they leave the southern Chinese city of Guangzhou after losing their jobs.

And it’s not just jobs that have gone or are at risk. Home ownership, life savings and investments have been either put at great risk or even swept away in the tsunami of the global credit crisis.

No doubt, in certain industries and with certain skill sets, some people can estimate that, on the balance of probabilities, they will be safe in their jobs for the foreseeable future and as a corollary will be able to meet mortgage payments and other expenses without undue stress. For many others, the future must look somewhat cloudy at best.

It’s in relation to that broader economic environment and in the sense of “relative to the financial security of a regular job in an office or factory” that I refer to the “myth of financial insecurity” in working from home.

And, given the times, given the headlines, might it not be a kind of insurance to test one’s aptitude for business by establishing some form of part-time business from home while still having a “regular” job?

Developing a business from home in this way, however modestly, can help us develop our business skills and make us more self-reliant, less dependent for our long-term livelihood on the goodwill of others, such as employers, less dependent on the concept, now regarded in some circles as – at best – quaint, of company loyalty to staff. If down the track you really want or need to have a full time business from home you will have better skills than if you had to start cold. You will also have the benefit of starting to learn an essential mindset or skill for long-term business success, that of thinking like a business owner, not like an employee.

For anyone is attracted to the idea of working from home but troubled by the financial risk aspect of having a home based business, I recommend reading Tim Ferriss’ book “The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich. Even if you don’t want to follow everything he suggests, the book is a marvellous challenge to a number of commonly held views and attitudes which may not serve us well in terms of the future of workand business.

And on the flip side of the financial security issue, there can be some quantifiable financial benefits in having your own business, working from home. For example, considering the Benjamin Franklin principle, “a penny saved is a penny earned”, think of how much more money you can earn by:

  • no gasoline or bus or train fare needed for the 30 second commute to your home office/desk
  • getting lunch from the fridge, not the local diner (tip: we regularly cook more for dinner so we can heat some up for lunch the next day)
  • not having to put in for special occasion presents for staff members (including the ones you have hardly met and may not even like)
  • not going for drinks after work (plus the added benefit of not saying things you may later regret!)
  • serious reduction in the need for an elaborate work wardrobe
  • tax benefits (don’t guess about these or rely on web research – consult your accountant, please!)

I know that as a long-term home business owner, a lifer so to speak, I am biased. Whether you agree or disagree with my views, I hope you will take the opportunity to share with us in the comments your point of view, your story, your tips on the issue of financial security/insecurity in having a home based business.

In the next post on this series I’ll be looking at some of the pleasures of working from home.

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  1. @John: Most people seem to think of home base businesses as pyramid schemes, scams, etc. Although, there are some home based business companies whose business model are primarily the recruitment of down line members who pay monthly “auto ship” fees, there are some companies that actually have very marketable products to sell through its network of distributors. I recently wrote an article comparing the basic structure of the “traditional” business model to the structure of the typical home based business (mlm) model. Interesting enough, the trees look the same, however, the guys at the bottom of the mlm business tree can achieve a much greater financial freedom with some hard work and dedication without having to worry about layoffs, company bankruptcy, etc. that are facing many traditional companies today. You will find that many more companies will start to follow the mlm business model, as most mlm business companies are structured to remain “debt free”.

  2. Just catching up, folks. Thanks for all the great comments!

    Tom: that’s surely inspiring for anyone reading this – it is for me!

    Shirley at Solo Business Marketing: well, you are always an inspiration for me – I love the picture of you shouting with joy at your successes!

    Ron: thanks for those wise comments. Yes, I never urge people to work like this because I know some will just not make a go of it. And I do agree about the collaborative spirit – I was speaking today with another person working from home, on another continent (yours) and that sharing, collegial spirit infused the whole conversation.

    Lee Chin: I do appreciate what you say and I like the way you draw attention to the “journey of self-exploration” – don’t recall seeing that in books about working from home but it is very real!

  3. Hi Des,

    I particularly loved this line by you…

    “Developing a business from home in this way, however modestly, can help us develop our business skills and make us more self-reliant, less dependent for our long-term livelihood on the goodwill of others,”

    Couldn’t agree more..

    It is not entirely a simple step. But if one is persistent enough, when you look back…you tend to realize that your learning curve prob raise like 10000% within a short span. You also tend to enter a journey of self-exploration which in my opinion forms & shapes you into a much stronger person in the coming future

    To everyone’s Success!
    Lee Chin

  4. You are right, specially in the time when recession is set to begin (or has it already begun). There will be more pink slip and job cuts and people will look for jobs. So, if you have a home business of your own, then you cn earn enough money to survive.

    Latest blog post

  5. Good view and explanation. It’s always be a pro and contra, but with this explanation, I’m sure, they’ll understand.

    Hendro Iskandars last blog post..How to Get The Best Mortgage

  6. Des,

    Astute, insightful post. In my lifetime, I’ve never seen such fear and uncertainty, particularly communicated in overload mode by the media. Everyday citizens are stunned because they have lost faith in many of the institutions they were taught to believe in.

    So what might be the upside to this? First, recognizing there is no security other than what’s going on inside each of us. We reclaim our power when we realize we’re responsible for our lives — not companies or governments.

    Many people will be forced to rethink a lot of things they’ve learned to be “true.” For example, in terms of creative problem solving, does a person need a job or do they need “ways” to use their talents and skills to generate income? When defined it as the latter, a person has more options open to them. They may do two or three “jobs” they enjoy.

    The fact is that the masses will NOT take the self-employment, work at home route. It takes bravura. It takes a willingness to dive into the unknown. It takes tolerance with feelings of uncertainty. Is that check in the mail?

    What I find most wonderful about people working from home is that we’re more collaborative than people who have “jobs.” We’re open and enthusiastic about sharing with each other instead of competing. We know that our success ultimately comes from creating value for our clients. Here’s to the spirit of the self-employed!

    Ron Balls last blog post..EFT Points Translated

  7. Solo Business Marketing says:

    I’ve been self employed for 18 years and am very pleased that I made the transition back in 1990.

    As you say, Des, there is no security anywhere, but most of all, when you work for yourself, there are infinite possibilities to increase your income at a moment’s notice. That’s a far cry from the pennies I once made working for someone else.

    The commute can’t be beat (about 10 steps from where I rest each evening), and the freedom to celebrate my successes by shouting at the top of my lungs at any given moment is absolute euphoria for me.

    When I visit my financial adviser’s office to fund my retirement account, I enter with a wide grin on my face. At the same time I begin to quiver thinking that her corporate environment might still be a prison for me if I hadn’t trusted my instincts.

    I’m living my dream, working at home and earning a very decent living.

    Solo Business Marketings last blog post..Is Your Next Idea Sitting in a Pile of Papers?

  8. Tom / Unique Business Opportunity says:

    I’ve been self-employed for 35 years and even in the leanest of times my autonomy and my destiny was up tom me. I would not have it any other way. Success is a purely individual responsibility. Employees with their false sense of security often forget this.

    Tom / Unique Business Opportunitys last blog post..Understanding Home Based Business Success

  9. John & Darrell
    Yes, whenever I see one of those news reports – more frequent these days it seems – of men and women standing in dismay at a factory gate or other place of former employment, realizing they have been cast adrift, so to speak, I wonder how many of them will cope, how many will have the energy and determination – and opportunity – to pick themselves up and start over. I suppose it’s our nature, when times are good, to not see that happening to us until it’s upon us. And if your exit from a job was not of your own choice or timing, it can be harder to adjust to the idea of having to make your own way: I would never underestimate the mental and emotional challenge in that, but even if it is a cliche I do believe we can learn more and become stronger and more resilient when we are challenged than when all is going swimmingly.

  10. I think the hardest part of this is the mental aspect of financial security.(can I really do this,how will I pay the bills)I lost my job unexpectedly and decided to start a home business and it takes planning and time to get to the point of financial comfort.

    I want to be in charge of my financial plan and having a home business works for me.

  11. You’re right, the “well paid job” is not secure. I’ve been made redundant far quicker than ANY business venture I’ve been involved with could possibly fail.

    Running your own business, you control your job security, not someone else who you may never even meet.

    Johns last blog post..Marketing With Lawn Signs


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