Sunday, May 9, 2010

Work For Money, Or Mind Your Own Business?

(source :,-Or-Mind-Your-Own-Business?&id=3977427)

By far, trading your time for money is probably the worst money making opportunity I see because if you don't work, you don't get paid! In fact, I have not held a job for more than a year and a half as I can't see why I should earn dollars for the hour. Since quitting full time work, I've run numerous businesses and I believe that is how the rich get richer. Some comparisons to why minding your own business is better than working for money:

Reason #1: You get taxed the most as an employee
Once you start earning above a certain income bracket as an employee, the government starts to tax you around 48.5% of your income and I would start asking is this worth it? So if you like to trade the average 50 hours a week to earn $100,000 a year from your job and have a nice chunk paid to the government, then I would say keep your job. But if you are smart and start your own business, doing the same hours and earning the same income in your company, then you will be able to keep more of your money. Even if you earned $100,000 through your company, you are only taxed at a flat rate of 30% after expenses are paid.

Reason #2: Security versus Stability
In my opinion a job nowadays doesn't necessarily have security, because your employer can make you redundant anytime the business goes through hardship. An example in more recent times can be seen when Australia's ANZ Bank cut almost 3,000 jobs or nearly 10% of it's work force. Unfortunately once you are made redundant, your job security is lost and the weekly income is gone, a tough call for stability? In comparison if you had a business that you setup and structured well, you could be living off a stable source of passive income just like many successful Internet Marketers who are earning in excess of $200,000 a year from their businesses.

Reason #3: Fewer Tax Benefits
As an employee not only do you get taxed the most, but you also get fewer tax benefits. As a company you can write off almost everything that you do for the business and claim it with pre-taxed dollars. On the flip side, as an employee you have to pay for your lunches, conferences, buy clothes, buy fuel for your car with after-tax dollars and only do you get to claim these deductions back at the end of the financial year. Doesn't that seem unfair?

Use Your Time Wisely
Everyday you are limited to 24 hours just like everyone else and no matter how much you earn as an employee your income is caped. Once you stop trading your time for money, your income stops immediately. Even if you are a high paid IT consultant that bills out $1000 an hour you still have a cap, and you are still trading hours for dollars.

There will come a time when you can no longer work either because you become sick, have an accident or are forced to retire. What happens then depends on the decisions you made earlier in life. If you planned well, you'll have enough to live on without trading hours for dollars. However, statistics shows that the majority doesn't plan well and will be force to take some kind of social handout - either by the government or family.

If you are currently working for money and not minding your own business, I urge you to take a serious look at your situation. You will see that governments tax more on employees than on companies and it can mean that my company only pays a flat rate of 30% tax on it's profits and an employee has to pay almost 50% on their wages upfront. There are substantial benefits in minding your own business and I urge you to explore how it can help you become wealthy and have more freedom for yourself.

(Note : Ni aku amik dari website luar...kat malaysia rate tax agak berbeza..tapi the point is, kalau keje as employee, kita kena tax yang lebih tinggi berbanding dengan orang yang ada bisnes sendiri..kat mana2 pun sama je konsep tax ni..)


Goldman said...
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mdizone said...
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