Financial Anxiety Financial Wellbeing in California

W2 Employment to Solopreneur: I'm Scared AND I'm Doing it Anyways

financial anxiety solopreneur Mar 31, 2024

Have you ever done something that you were scared to do but did it anyway? I recently took a big step in my career. I retired as a medical social worker after 20 years. My tenure as a medical social worker spanned several countries and hospitals where I had the privilege to hold space for patients and their families during life's most critical moments. Retiring from this career was a difficult decision on many levels as I left my community, a great team, fulfilling work, and a secure and benefitted W2 job.


However, it isn't a full retirement. Social work, to me, is a way of life, as it offers opportunities to change your "job". So, I am retiring to my two small financial wellbeing businesses I slowly grew over the last 6 years. In this blog post, I explore what I, and many individuals, grapple with choosing a traditional W2 job versus embarking on the journey of entrepreneurship with their own small business. Each path presents a unique set of advantages and challenges, catering to different aspirations, lifestyles, risk appetites, and psychological flexibility. We'll delve into the pros and cons of both options. There is a third option that I share as I used my W2 employment as a bridge to solopreneurism! 



W2 Job: Steady Income, Limited Autonomy


What is a W2 employee?

A W2 employee is the most traditional form of employment in the United States. It is where an employee works for an employer who tells them when, where, and how to work. They are paid by the employer using a W2 tax form.




Stable Income

One of the most compelling aspects of W2 employment is the assurance of a steady paycheck. With a predetermined salary or hourly wage, one can rely on regular income to meet financial obligations and plan for the future. Whether you are paid weekly, bi-weekly, or monthly, you can make a plan for that money. 


Benefits Package

Many W2 positions offer a comprehensive benefits package, including health insurance, access to FMLA or PFL, mental health, retirement plans, paid time off, bereavement or jury leave, and other perks. Let us not forget potential smaller perks like an annual bonus, long service bonus, discounts on gyms, phone services, etc. These benefits can significantly enhance your overall compensation package, and overall wellbeing, as well as provide valuable security. Most of us may not even optimize these wonderful benefits for lack of knowledge or interest. 


Predictable Schedule

Unlike the often erratic hours associated with entrepreneurship, W2 jobs typically offer a predictable work schedule. This stability can facilitate work-life balance and allow one to manage personal and professional commitments. 


Minimal Financial Risk

Working for an established company shields employees from the financial risks inherent to starting a business. There's no need to invest personal capital or take on debt, reducing the potential for financial stress and uncertainty. You get the benefit of a steady paycheck. 


Established Values

A W2 anchors you to the organization's values, and how the company wants to service or interface with its customers. Essentially you work within the organization, mission, and values and live them out in your daily tasks. 




Limited Autonomy

In a W2 job, there is less autonomy and decision-making authority compared to small business owners. Company policies must be adhered to and employees answer to superiors, which can restrict one's ability to innovate and pursue personal ideas. 


Limited Growth Potential

Advancement within a traditional employment structure is often contingent upon factors such as seniority, office politics, and organizational hierarchy. This can hinder ambitious individuals seeking rapid career progression and greater control over their professional trajectory.


Fixed Income

While the stability of a regular paycheck is reassuring, it also means that employees are constrained by their predetermined salary or wage. There's limited potential for significant income growth unless accompanied by promotions or salary negotiations. Sometimes, you may not receive a wage or a cost of living increase. 


Job Insecurity

Despite the perceived stability of W2 employment, there's always the risk of layoffs, downsizing, or restructuring, particularly during economic downturns. Employees may find themselves vulnerable to sudden job loss, which can disrupt their financial security and livelihood.


Small Business: Freedom, Flexibility, and Financial Uncertainty




Entrepreneurial Freedom

Perhaps the most enticing aspect of owning a small business is the unparalleled sense of autonomy and control. Entrepreneurs can chart their course, make decisions that align with their vision, and pursue their passion projects without corporate constraints.


Unlimited Earning Potential

Unlike the fixed income associated with W2 employment, small business owners have the opportunity to reap the full rewards of their efforts. Successful ventures can generate substantial profits, offering entrepreneurs the potential for unlimited earning potential and financial independence.



Running a small business affords individuals greater flexibility in terms of work hours, location, and operational practices. Entrepreneurs can design their schedules to accommodate personal commitments, pursue interests outside of work, and achieve a better work-life balance.


Creative Expression

For many entrepreneurs, starting a small business is an avenue for creative expression and self-fulfillment. Whether it's crafting artisanal goods, providing specialized services, or developing innovative solutions, entrepreneurship allows individuals to bring their unique talents and ideas to life. 




Financial Risk

The path of entrepreneurship is fraught with financial risk and uncertainty. From initial startup costs and ongoing operational expenses to fluctuations in revenue and market conditions, small business owners must navigate a myriad of financial challenges that can jeopardize their livelihood. 


Financial Anxiety

Financial anxiety means being concerned about your money situation such as when will your next paycheck come to figuring out how to navigate both business and personal essentials and needs. As a small business owner, there will always be money worries. According to the Bureau of Labor Statistics, nearly 20% of all businesses will close within a year. Another worry is the continued cost of services and goods increase. Here is a blog post that helps you deal with financial anxiety. Here is another blog post about turning stress into money gratitude



Long Hours and Stress

Building a successful business requires dedication, perseverance, and a willingness to put in long hours, especially in the early stages. Entrepreneurs often find themselves juggling multiple responsibilities, dealing with high levels of stress, and sacrificing personal time in pursuit of their goals.


Lack of Stability

Unlike the predictable income of a W2 job, small business owners may experience irregular cash flow, seasonal fluctuations, or unexpected setbacks that can disrupt their financial stability. This uncertainty can be unsettling, particularly for those accustomed to the security of traditional employment.


Limited Resources

Small businesses typically operate with limited resources, whether capital, manpower, or technological infrastructure. This can pose significant challenges when competing against larger competitors with greater financial resources and economies of scale. You are likely to find yourself the CEO, the CFO, the accountant, or the Head of Marketing as well as providing the service or putting out the product. 


Summarizing a W2 and entrepreneurship, the choice between a W2 job and owning a small business ultimately boils down to individual preferences, priorities, and risk tolerance. While a W2 job offers stability, benefits, and a predictable income, entrepreneurship provides unparalleled freedom, potential for growth, and creative fulfillment. By carefully weighing the pros and cons of each option, individuals can make an informed decision that aligns with their aspirations and goals for the future. Whether pursuing the security of traditional employment or the excitement of entrepreneurship, both paths offer opportunities for personal and professional fulfillment.


My Story: Bridging W-2 to Soloprenuerism


I have referenced my Money Story in previous blog posts but overall it is steeped in financial scarcity, fear, and anxiety. Those thoughts were more prevalent earlier in my life as I emerged as an adult with very little financial literacy and money-avoidant tendencies. However, despite that fear and anxiety, I had a burgeoning entrepreneurial and adventurous spirit but approached it cautiously. Over time, I challenged those limiting money beliefs sought out different opportunities, adapted to new environments, worked on being grounded, and built mental balance, essentially building my psychological flexibility.


Building up my entrepreneurial spirit

 When I entered graduate school after living in Ecuador for two years doing development work, I knew one thing...I did not want to do the same job over the next 30 years. Landing a Master of Social Work took some time and contemplation. Ultimately, it met my primary criteria while still allowing me to be of service to the community. Immediately after graduation, I left for New Zealand to live for a year having acquired a Skilled Immigrant Work VISA. It was a great experience and gave me experience working in a different health system and with different cultures. One of the key differences between New Zealand and the United States was that health insurance was not tied to your job, it was universal and paid for through taxes. Residents and citizens had more choices when it came to starting their businesses. They did not have the stress of paying for health insurance.


Expanding psychological flexibility

 Living and working abroad expanded my psychological flexibility, allowing me to adapt to different approaches to work, ways of living, and societal values. I had to put myself out there to befriend colleagues and others. It also allowed me to see the different opportunities to engage in work. That is where the seed was planted to work for myself. One of the cons of New Zealand at the time was that they did not have a retirement system, only some years later would they introduce the KiwiSaver, which mirrored a 401k/403b option for Americans. Not working towards retirement weighed on me. 


Returning to the United States, I established myself in a clinical role at a hospital while re-adjusting to living in the United States. I was very excited and looked forward to pursuing my clinical license. This step started my bridge to starting my own business.


Reaping the benefits of W2 employment

 There is no denying that understanding and optimizing your benefits in a W2 job and saving and investing in yourself whether through work or personal vehicles sets you up for choices later on. Leveraging the benefits, I used my job at the hospital, working full-time, at first, and then moving to a part-time position. With years of savings underway, a supportive husband, and a more flexible schedule, I opened my private practice while retaining my medical insurance, 403b + pension contributions, PTO, and all the other benefits the job afforded me. I retained a consistent income and could work up if I needed to. This allowed me to develop my business, navigate a variable cash flow, develop my processes, and build my referral networks. For me, this was the ideal situation. It alleviated my financial anxiety as well as gave me a chance to build psychological flexibility as a small business owner. 


Navigating the Health Insurance Landscape

A key piece of the solopreneur journey is health insurance. This is fortunately not an issue for our family. I give thanks daily that through my husband we still can access health insurance. It is not completely covered as it was through my position but the costs are manageable for my family. Working with other small business entrepreneurs who do not have access to health insurance through a partner, most have sought health insurance through the Affordable Care Act Health Exchange.  


Feeling Anxiety and Stepping into the Unknown

 It took about 6 months to start talking about leaving my W2. Then it took another few months to decide my departure date. I thought I had worked through all the emotions surrounding my departure but I still teared up when I told my boss. Departing a job or career that you love and are committed to is a grief process and you should give yourself the time and grace to process. Again, there remains financial anxiety but I have been practicing financial gratitude to help me in times when things feel overwhelming. I have often thought about the support I provide to my clients and how I had to apply the same grace to myself. 


In summary, the journey from W2 employment to being a solo entrepreneur will look different for everyone. I realize that not everyone will have the same options or support as I have had during my journey. That is what makes the world so unique. I would love to hear about your journey or if you find my story relatable or resources supportive. I cherish a community that grows together despite limiting beliefs we may have. 


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About the Author

In her 20-year career as a medical social worker spanning multiple countries and hospitals, Mariah had the privilege of holding space for patients and their families during life's most critical moments. Despite the difficulty of retiring from such a fulfilling role, she has transitioned into her next chapter with grace and determination.

Retiring from her role was not a complete departure from her passion for social work; rather, it marked a shift towards entrepreneurship. Over the past six years, Mariah started Koru Financial Therapy and Next Gen Wealth and Wellbeing, nurturing two small financial well-being businesses, leveraging her expertise and experience to support and empower individuals in managing their finances.

Mariah shares her insights and experiences in navigating the complexities of career transitions, specifically exploring the dichotomy between traditional W2 employment and entrepreneurship. Through her blog posts, she delves into the advantages and challenges of each path, drawing from her journey to provide valuable perspectives and guidance.

 As Mariah continues to share her insights and experiences through her blog, she remains committed to building a supportive community where individuals can learn, grow, and thrive together, regardless of the limiting beliefs they may face.




Questions: email [email protected]

Mariah Hudler, MSW, MBA, CFT-Iā„¢ is a therapeutically informed financial wealth & wellbeing coach. She works with individuals, couples, families, entrepreneurs, groups, and organizations to make Wealth & Wellbeing a joyful part of life.

Disclaimer:Ā This blog is for education only. PleaseĀ consult with aĀ qualified professional when you have any questions about your personal financial, tax, or legal situation. Information contained in this post is for informational purposes only and not intended to replace professional advice.

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