1.
Thought process and approach
·
Employee: Complete professional education and
choose specific field of profession
o
Learn specific skill set such as
Programming/ERP, Full stack, Cloud, Emerging technologies etc. (for IT
professionals)
o
Create Resume and search for job
o
Perform interviews to achieve job
o
pull strategy: look for job opportunity and
apply
o
Limited time can be spent for further education
·
Entrepreneur: Have minimum required level of
education, study/identify market needs and have great vision for future (or long-term
plan)
o
Learn full skillset in specific areas (such as
Technology, Accounting/Finance etc.)
o
Formulate a business idea, create an entity and
develop profile/resume for a company
o
Learn to use leverages available in the world such
as people, natural resources etc.
o
Push Strategy: Identify advisors/mentors, family
& friends, venture capitalists and perform push strategy to present the
idea
o
Constant learning, keeping up with the current
trends of the market and continuous educations is a must
2.
Roles and Responsibilities
·
Employee: Employer takes care of the legal
responsibilities and remaining responsibilities are taken care by individual
through the tax education obtained through schools and common sense
o
Filing of
taxes based on W2, individual taxable commodities such as home, care etc. has been
taught in schools and at home and considered citizen responsibility
o
Loss of employment is always risky proposition
and it depends on various conditions such as company good standing, Stock
market conditions etc.
o
Has to be consistent hard working high performer
to sustain position or career growth proposition and has to be achieved for
long periods of time
o
Changing government or corporate policies can
have impact on earnings/savings such as Social security taxes, 401k contribution,
Medicare taxes etc. in addition should be capable to handle highly risk
transition in policies from Pension plans to contribution plans which are
forced changes
o
Income goes down once the individual stops or
becomes incapable of working
·
Entrepreneur: Individual or group of individuals
forming the entity responsible for everything for e.g. Legal, project ideas,
compliances etc.
o
Corporate taxes rules are separate compared to
individual tax rules with lot of tax advantages (but with a very thin grey line
between helping the society vs serving self-goals)
o
Probability of success is 1:10, but has potential
of growth is ten to hundred to thousand times in case of success
o
Initial work load and hard ships are multi fold
tougher than regular employees and it reduces as system gets stabilized
o
Has to build a system/team to implement and
understand the changing corporate and legal
systems
o
Income grows exponentially once the system is in
place and individual should not be worried about retiring.
3.
Risk and Rewards
·
Employee: The risks involved are shared between
employees and corporates.
o
Finding employment that meets the need of
constantly changing wants of individual is always a challenge
o
Job security is considerably very low compared
to industrial age. As per recent scientific studies average time of getting
outdated in information age is 18months
o
Employees have very minimal to almost no tax
advantages and also earned income has highest percentage federal and state
taxes in addition to mandatory Social security, Medicare
o
Employees are given opportunity for contribution
plans such as 401k, 403b
·
Entrepreneur: The risk is handled entirely by
the entity that has been formed.
o
Identifying a problem or finding market gap is
key to start business or alternative approach is to take a franchise to get
kick start into business.
o
There is no financial security during the
initial phase as capital needs to invested and there is no personal reward
until there is positive cash flow from the entity
o
Corporations have some tax advantages compared
to individual earned income but book keeping and accounting are required for
auditing purposes
o
There is option to handle self-directed
contribution plans (tax and legal laws are different for different type of
corporations like LLP, LLC, S-corp and C-corp) such as 401k, health care and
legal plans etc.
4.
Conclusion points for employee vs entrepreneur:
·
Employee gets salary every month which is like plucking
the fruits from the tree as when they come rather than waiting for the tree to fully
flourish. Which leads to minimal chance of creating mountain called goal that
is built of assets, rewards, greatness and richness
·
Entrepreneur is taking advantage of the tangible
leverages like physical and virtual resources, intangible leverages like time,
value etc. and filing the path with assets that pile into a mountain of assets
which grows exponentially compared to earned income savings
