Thursday, October 11, 2012

Self-employment is a lot like Gambling

The desire to gamble runs in my family. Personally, I enjoy gambling as well; however, I hate losing money, so I tend to restrain my tendencies toward the habit. However, I realize that as much as I stay away from gambling in its purest form, I manage to let it slip into my life in other ways.

I recently came to the realization that in my chosen career as a self-employed individual, many of the characteristics of gambling are present. This made me ponder just how much self-employment can in many ways be a lot like gambling and how I’ve done my best to minimize risk in my career and avoid that “losing money” aspect of gambling that I dislike so much.

Putting My Bankroll on the Line
I put quite a bit of time and effort into saving up enough money to bankroll my self-employment dreams. Just having such a fund though didn’t mean I had to move into self-employment. I could have saved that money for retirement, put it into buying a home or just gone on a nice long vacation. Instead, I put my bankroll on the line, risking it in an effort to make a success of my self-employment dreams.

Even a career that was relatively easy to move into such as freelance writing still came with expenses. There was the cost of giving up my regular income, yet still having to cover regular living expenses. There were office supply costs, mailing costs, technology-related costs for things like a printer, laptop, software, and similar expenses. And there was no guarantee of getting this money back unless I succeeded in my chosen role, so it really was a gamble.

The Daily Scratch off
Once I was assured of making it in my career transition, the gambling aspects of my self-employed career -- while still there -- weren’t as dangerous to my financial situation. Instead, they became somewhat enjoyable. As I grew into my role, I began to form multiple income streams through various customers and employers to hedge against failure in any one or two individual income streams.

As these streams became viable sources of regular income, I began to look at them kind of like low or no-risk scratch off lottery cards. Each day, I could log into my email or employment site for which I did work to discover my “winnings” or earning totals. There was -- and still is -- an expectant excitement that came with finding out just what I’d earned that day from income sources such as my blog, my e-books, and various websites for which I freelanced.

Knowing When to Hold Them and When to Fold Them
Maybe the most difficult gambling-related aspect of my self-employment work -- since I’m my own boss and make all the decisions regarding the future course of my career -- is knowing when to fold my hand and call it quits on certain income steams. Tracking my individual income streams and sources over time so that I can gauge their success -- or lack thereof -- helps me know whether or not to continue plugging away at them or pack it in and call it a day.

There are only so many hours in the day for a self-employed individual. And seeing as how I have other duties as CEO, CFO, tax accountant, marketing exec., at-home dad, and all the rest when running my own show, I have to make informed decisions regarding where and how to allot my time. I do this by using my experience and knowledge of past performance to decide whether certain sites, lines of work, and income streams are viable and worth continuing or if I should fold my hand and wait for a better one on the next deal.

The Difference is…Control
Control is the big difference between gambling of the casino sort and that found in my self-employment experience. When I go to the casino, I can determine how much I gamble, which games I play, and how much I spend at each; but when it comes to the actual odds of success at each game -- since I’m not a professional gambler -- I have, in most instances, very little control over the outcome.

With self-employment though, I can better affect my chances of a successful outcome in my work through my marketing, relationship building with clients, continuing my work-related education, branching out into related income sources (blogging, e-books), etc. So while my self-employment does share characteristics with gambling, it’s a form of gambling in which I can minimize risk through my actions and better control the outcomes of my “bets” through my efforts and the decision-making abilities.

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