What’s your risk tolerance? More specifically, what is your ‘employment opportunities’ risk tolerance? Do you consider yourself to be conservative? Moderate? Aggressive? Be honest and make a note of your answer.

With your answer in mind, here is another question to ask yourself, whether you are an employee or are self-employed.

Who has all their eggs in one basket?

A. An employee

B. Someone who is self-employed

What if the questions instead asked about having all your ‘income eggs’ in one basket? Does that change your answer? Who is taking the most risk with their ‘paycheck’? Is it the employee or the self-employed?

Consider the following excerpt from Steve Pavlina’s 10 Myths About Self-Employment.

4. Self-employment means putting all your eggs in one basket. Ask yourself this: How many people would have to turn against you to shut off all your income? For employees the answer is usually one. If your boss fires you, your income gets turned off immediately. Whether or not it’s justified is irrelevant — you suffer a total loss of income regardless of the reasons. Now that’s putting all your eggs in one basket. With self-employment, however, you can more easily diversify your income streams and thereby reduce your risk. You have the control necessary to make this happen. Generating different types of income from thousands of customers is a lot more secure than receiving only one paycheck.

This really struck a chord with me.

At one time, I was one of those people who would have argued vehemently that being a business owner was much more risky than being an employee. I have long since changed my stance on that issue, but never considered stating it like Steve did in his question.

I think that being an employee can actually give you a false sense of security. What’s that you say? I say that if you are an employee, you more than likely have ‘security’ in fact that you will be paid on a regular schedule. Be that weekly, bi-weekly, monthly or whatever. And that is true. True that is, as long as you are an employee.

But what happens to your ‘guarantee’ if that one person, your boss, turns against you? If all your ‘income eggs’ were in that one basket, your life will be scrambled!

If, however, you are self-employed and lose a client or customer, you lose the income produced by their sales. But you still have the rest of your client base. Not to mention any other income streams you may have.

So your mission now, should you choose to accept it, is to take an honest look at your current level of employment risk and to decide if you are happy with the number of people who control your income stream.