People on Medium love to talk about quitting their full-time jobs to pursue their passion for writing/self-publishing/course creation/app development. Many of these writers talk about how they are now happily making a six-figure income from their passive income online business. Sometimes, they even go so far as to call it an empire. Indeed, just the other day I got an email from a reader who said, “Thank you so much Sam, your blog has given me the courage to quit my full-time job and pursue my passions!”
When I read this reader's email, I felt afraid for her.
Starting an online business can be an excellent choice. But quitting your full-time employment for your online business is rarely a good idea. I’d wager that for 100 entrepreneurs with online businesses, it’s only wise for 1 of them to quit their job to work on their businesses full-time.
Why It’s Almost Always a Bad Idea to Quit Your Job
The reason gurus tell you to focus your wealth-building energy on online businesses is always the same: When you sell your time for money, as you do with an employer, you are limited by how many hours you can work. When you sell infinitely reproducible digital products for money, your potential income is limited only by how many people buy your product. If you can get just a few thousand people to pay monthly, you can make seven figures annually with little effort.
Theoretically.
Some say the gurus lie to you about how much they make or how easy it is, but they aren’t. These people really are making seven figures of passive income annually, and it really was that easy for them. And trust me, it wasn’t even luck.
So why is this a bad idea? What’s the catch?
After 11 years in entrepreneurship consulting, I’ve observed that people who successfully build seven-figure passive-income online businesses always have these traits in common:
- They want the money — badly. Everyone wants enough money to live, but some people are less motivated than others. Some people only want enough money to pay their bills and go on an occasional road trip. However, most entrepreneurs with seven-figure online businesses are highly motivated by money, motivated enough not only to work but also to spend their free time reading books and listening to podcasts about work. Even their gym and sleep routines are about productivity. They may only work 4 hours a day, but they’re the kind of people who spend their off hours listening to Andrew Huberman.
- They can collapse their identity. What do I mean by this? Think of the names of some of your role model online entrepreneurs. Then, think of their bylines and their websites. They are all about one thing — the thing they do online. Other than the token “proud father and avid hiker,” there’s not a whisper of anything else about them. These lifestyle entrepreneurs are comfortable with erasing everything else about themselves and collapsing their public reputation so it is about their One Thing.
- They are mentally and physically healthy. They are so healthy that they can set early-morning routines, enforce gym habits, and control their eating schedules every day without fail (except for getting the flu once a year). These routines greatly enhance what people are capable of, and I recommend them even for disabled and mentally ill people, but let’s not pretend that the able-bodied don’t have an advantage here.
- They have centrist political views. I’ve never seen a communist or anarchist build a seven-figure passive-income online business. In every case, they are prevented from doing what could make them significant amounts of money by their overwhelming disgust for our economic system or their desire to provide people with needed resources for free. These inclinations are worthy of respect but are (superficially¹) counterproductive to earning a seven-figure passive income.
That’s not to say there aren’t exceptions. Of course, there are. But don’t try to say this isn’t the truth in most cases. The droves of smiling, single-minded, able-bodied, politically centrist online entrepreneurs on legions of personal websites across the internet stand witness.
A few years ago, I was making several thousand dollars on Medium a month. I had an excellent opportunity to break through into being one of these course-selling seven-figure online entrepreneurs, but I couldn’t bring myself to. I did not want the money badly enough to collapse my identity as a ‘productivity guru’ or to do what it took to make a profit at the expense of my then-political convictions.
So what did I do instead? What can you do instead?
Why Getting a Traditional Job Is a Much Easier Way to Get Rich
After decades of entrepreneurs hyping the value of starting a business, traditional jobs have gotten a bum rap. But here’s the reality: most full-time online entrepreneurs could make 2–5x what they make by working a regular job.
People always talk about how online businesses are great for achieving financial freedom. Nobody ever talks about it as a career development strategy.
- Maybe you are stuck in food service, so you start posting here on Medium three times a week, and then after two years of that, you’re making $1000 a month in Medium Payments. That’s great! But what’s even greater is that you now have a portfolio you can use to land a marketing copywriting job making $3000 a month.
- Maybe you’ve been an online entrepreneur for over five years, but you can’t seem to bring in more than $20k a year. You’re sick of being poor, so you land one of those entry-level industry jobs to bring in more money. At that job, you learn how the big boys do it — how they talk about work, structure projects, and sell deals. You leave that job two years later and use what you learned to scale your online business to $50k a year.
To emphasize this point, let’s consider two fairly typical scenarios for how this plays out for most people.
Passive Income Online Business: You make $0 the first six months, $100 the first year, $1000 the second year, $5000 the third year, $12,000 the fourth year, and $20,000 the fifth year. You work 25 hours a week on your passive income project every year. Five-year income: $38,100.²
Traditional Work: You make $25,000 a year working in food service. You teach yourself programming online on the side. You work 50 hours a week. You do this for two years. Then, you get your first junior dev role, making $20,000 a year. You work 30 hours a week. You do this for two years. Then, you get a proper junior dev role, making $50,000 a year. You work 30 hours a week that year. Five-year income: $140,000.
Then there are the emotional considerations: Reduced stress from having a comfortable income, a regular paycheck, health insurance, and retirement benefits; more reliable motivation for both your traditional job and your online business.³
You’re so bought into running online businesses because you’ve unintentionally surrounded yourself with people who are also bought into running online businesses. It’s a psychological Ponzi scheme — you decide to strike out on your own and must psyche yourself up. In doing so, you end up enrolling other people in the narrative, who then decide to strike out on their own, enrolling other people, on and on and on.
Create an Alternate Vision of the Future
If your happy ending has always featured you as the founder of a seven-figure online business, try creating another vision of a happy ending for yourself.
- Imagine how you will feel as you retire at age 45, thanks to generous company 401(k) match and vesting plans.
- Imagine having $3M in your retirement account and watching that balance increase yearly.
- Imagine relaxing on a beach in Italy with literally nothing to do, not even maintaining your online business.
- Imagine scheduling vacations for yourself and spending them where you want to without opening your work email once.
You don’t need an online business to live the kind of life you want.
You Don’t Have to Quit Entrepreneurship
None of this means you have to quit online businesses entirely. You can continue working your online business while maintaining traditional employment. In many ways, this is the best of both worlds, enabling you to enjoy traditional employment benefits, professional education you couldn’t get anywhere else, and a high income you can use to reinvest in your online business.
If that sounds like a demanding time commitment, you can avail yourself of the multitudes of productivity advice on this website. Many people before you have walked this path, and you can learn from them along the way.
In Conclusion
One of my biggest regrets in my career is not allowing myself to pursue traditional work until I was 27 years old. Like someone raised in a strict religion, I stayed devoted to the belief that entrepreneurship was the One True Path to happiness and financial freedom, even when my income never rose above $30k a year.
And, like someone raised in a strict religion, when I finally broke free of my oppressive beliefs and gave traditional employment a try, I was amazed to find out how much money I could make and how easily I could make it.
So, if you’re considering quitting your job to build an online business, reconsider. You don’t have to abandon your entrepreneurial dreams entirely, but balancing them with traditional employment might be the key to financial stability and personal happiness. By maintaining a regular job, you can enjoy a steady income, professional growth, and the emotional benefits of routine and security. Meanwhile, you can work on your online business without the pressure of making it your sole source of income.
Ultimately, happiness and financial success don’t come from following one rigid path. They come from finding something that works for you.
1: They aren’t counterproductive in reality, as one could earn money from wealthy customers and then donate it to charities or use it to support favored causes, but this is often how the broke communist or anarchist sees the matter.
2: In my experience, these numbers are typical for a successful online business, i.e., one that is not abandoned by the founder within the first six months.
3: Many people think they must quit their regular jobs to focus on their online businesses. However, counterintuitively, most entrepreneurs report being the most productive while maintaining a regular job. Something about maintaining traditional employment sets a routine that makes it easier to be productive. This only begins to change when the online business income begins to bring in more than the traditional job does.