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Being self employed might mean you are the boss of yourself with only yourself to answer to. You may be classed as self emplyed but work for one or two other companies and undertake jobs that they hand you to go do - a form of sub-contractor.

Working for just yourself, allows you to work your own hours, and try out new ideas and rewards you with greater satisfaction for a job done good!

Self employed status brings greater tax advantages i.e. instead being able to spend whats left after the tax man has been at your pay packet, the tax man gets a % of whats left after you have allocated all costs towards the company - less tax to pay and greater growth for your company.

Obviously there are pros and cons to everything. Some of the cons of being self employed are:

  • No sick pay;
  • No holiday pay;
  • Greater responisbilities for business paperwork - tax returns, NI Contributions;
  • No company benefit schemes;
  • Money worries;

Sick Pay Entitlement?You may not be self employed however, you may work as part of a small company. You could be brickie or plasterer - part of a small building firm. We've employed builders on our refurb projects and they asked how come I wasn't out at work. My reply was - "Annual Leave". They just laughed and said they didn't get such a thing! If they wanted to take a day off mid week, then they did so with loss of pay! OUCH!! They didn't mind ths as they worked extra throughout the year to pay for their holidays - they sacrificed their time that they could never get back, to earn money to go on holiday so they could spend money!!! OUCH!!!! (Yes they would most probably enjoy thier holidays).

A sub contractor friend of mine was off work for a route operation, on his return, we were chatting and it came to light that whilst he was off work and legitimately and technically on the sick, that he didn't receive any pay. Enquiring what would happen financially if there were complications with the op that forced him to not to return back to work so quickly. "I'd have to use my savings that I've acrued for the family holiday." OUCH!!

 Working then, is, in my mind, putting all your eggs in one basket

One thing, I'm grateful I work in a job for a world wide multi billion pound company that pays me holiday and sick pay. However, you would expect that to be a safe secure job wouldnt you? Well my previous employer was also a multi billion pound firm. Well established with various divisions - rail, building, roads, utilities. I  left them to relocate to the south of England to where and whom I'm with now. Three years after I left, my former employer company went into liquidation! Several thousand people lost their jobs and pensions. I also lost some of my pension as well in the process! OUCH!!!

A friend of ours fell pregnant, eventually went on maternity leave, had the baby, then had to go back to work so to earn money. Baby was looked after by grandparents whilst mother & father worked to earn money. Baby grew up and went to child care. Mother HAD to work two days to make it worth their while to pay for child care and make a profit. If she worked three days then that was good, but four plus days, and it started to cost more in child care and effectively mother was working for about £2.38 an hour after deductions! OUCH!!!

Self employed is both good and bad. Not being paid for holidays or sick is fine - if you don't do either of them! Not being paid for holidays is fine - so long as you can work overtime to build of enough cash reserves to account for not working. Working in a job for a large company is fine - if you can 100% guarantee the company won't go under or shut your department down, or sack you for being a naughty boy / girl. Working then, is, in my mind, putting all your eggs in one basket and relying on someone else to provide you with opportunities to earn money so you can live a lifestyle you are happy with.

Taking into account all of the above, yes you should have a job - of some sorts that floats your boat and pays the bills. But what if you had another stream of income where you didn't have to work to earn money? Property is one of our answers (as this is a property website!) obviously. We buy a house, spend some time working on the house, maybe 2 months of graft to get it up to a good standard, then rent it out. We then receive a handsome profit every month the house is tenanted. The agents fully manage the property and take a percentage, we pay the mortgage and insurance, and the rest is ours - well actually we put it into the pot to go towards the next investment property. If I lost my job for whatever reason, yes we would take a paycut, but I know the profits from our properties would pay our bills and keep us living a life we are accustomed to.

What is your alternative financial income stream to either top up your salary or provide contingency cover?


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