The Pros & Cons of Working on 100% Commission
Posted on October 25, 2016
When most people set out looking for a career, they are looking for the 9-5, salary position. They want stability and a regular paycheck. For the more entrepreneurial among us, starting a business or working as a contractor is a great alternative. Looking beyond the traditional career, we’d like to take a closer look at the type of entrepreneur who works as a contractor making 100% commission.
No Income Ceiling
While working as a contractor on 100% commission, you have no safety net. You are not walking into a cubicle every day or punching in and out to secure your set salary. At the same time, you are not limited to a set salary like the typical employee. They know how much money they’ll be taking home at the end of the year and they don’t have the power to boost that number.
By working as a contractor on 100% commission, you write your own check each month. Not literally, of course, but you are in control of your monthly and annual salary. For the right type of person, this could be the ideal avenue to build significant wealth while living a flexible lifestyle.
One of the drawbacks to working as a contractor is the lack of benefits, including health coverage, paid time off or retirement. As a contractor, you will be responsible for obtaining your own benefits. Additionally, you will need to work around any illnesses or needed time off. At the same time, you’ll have the flexibility to shop for the health coverage and retirement plans that fit your specific needs. You won’t be locked into the program offered by your company.
As a contractor, you will be able to write-off certain business-related costs. The range of tax benefits can be quite different depending on your business. Sit down with a tax professional to ensure you are optimizing your tax benefits.
When assessing your next business move, evaluate what you’re looking for. Are you looking for a stable position that provides a monthly income? Are you looking to build wealth over the long term? Do you need a flexible schedule? Are you looking to build a business?