The Opportunity Cost of Working For Someone Else
Why do people choose to start businesses instead of working for someone else?
Economically, you can think of a startup as a way to compress your whole working life into a few years. Instead of working at a low intensity for forty years, you work as hard as you possibly can for four. This pays especially well in technology, where you earn a premium for working fast. - Paul Graham of Y-Combinator.
Let me illustrate the point above with some simple calculations:
- Say you are working in a Fortune 500 company as an executive (you graduated two years ago from an Ivy League University or Oxbridge)
- You are getting paid RM 6,000 per month or RM 72,000 per year . (We will not include the social status and the other benefits that you get from working in the company. We also exclude taxes and other related stuff to simplify the maths).
- You are happy and contented with your work and...
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