The Self-Employed Middle Class Hardly Exists Anymore
Many people rightly aspire to improve their household’s state of resilience through actions such as storing emergency supplies, starting a vegetable garden, and learning basic readiness/maintenance skills, etc. In general, resilience boils down to self-reliance. But like it or not, in our largely urbanized society, true long-term self-reliance needs to include some measure of financial independence.
By ‘financial independence’ I don’t mean so much wealth that you no longer have to earn a living. Rather, in this discussion, financial independence means owning income streams that you control lock, stock and barrel. Some of this income may be passive (for example, royalties earned off a patent you own) but for most people, ‘independent’ income is actively earned via their own labor (i.e. self-employment).
Of course, the easiest path to financial independence is being born into a wealthy, well-connected family. But since few of us win that born-rich lottery, this article addresses the important question: How do “the rest of us” carve out financial independence?
How Many Make a Middle Class Income from Self-Employment?
Let’s start by defining ‘self-employment’ as an enterprise without employees that has more than one client. If a consultant’s entire annual income is from one client year after year, for example, the Department of Defense (DoD), the consultant is more of a proxy employee of the DoD than a sole proprietor. In an era where Corporate America and the government attempt to shed employment costs by hiring independent contractors rather than employees, we need to differentiate between quasi-employees who work for one client and the truly self-employed. Unfortunately, the officially-reported employment data does not distinguish between the two.
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