I had a pretty interesting conversation with The Wife the other day regarding whether it is “scarier” for the breadwinner of a family to be purely a paycheck employee, or if they are solely compensated based on commission/sales. If you were wondering where this conversation came up – between both of our fathers, my entire office (financial planning), The Wife herself, those in the mortgage industry, we know a good amount of people compensated on a pure commission basis.
First and foremost, the word “scary” is obviously subjective in it of itself. One person’s fear can’t be applied to what causes anxiety in another, and as such, the conversation may be moot. Nevertheless, I think there is something that most people do not take into account when answering the question. While I am risk adverse, The Wife makes me seem like a crazy wild man betting the mortgage on black monthly, and she immediately stated that the thought of me, the breadwinner, not receiving a paycheck was scarier for her. I would say that most people would agree with The Wife, if people believed otherwise I would assume there would be more entrepreneurs, or those in sales based jobs.
The fear of when/how you are going to get paid next is terrifying for most, but like everything in life there is an argument on the other side.
The Risk of Being Compensated Solely by a Paycheck
As soon as The Wife described her well placed fear of relying on pure commission, I thought how scary it must be to know exactly what is coming in is set in stone regardless of what you do! No matter how hard you work, no matter what you do differently, if your paycheck is $1,000 that is all that is coming in. To me, that is terrifying.
The thought that if you have $X amount in debt you can mathematically figure out how long it will take you to pay it down, and there is no bump in the road to move you a long faster is absolutely anxiety inducing for me. That being said, I am not commission based so how could this be my position?
Best of both world? Multiple streams of income. Every now and then I’ll get a law client, and there is my online business that provides some nice chunks of income every so often. In addition, The Wife runs a sales based business, so for the most part it is flat we do get those months with a bump.