I'm a contractor so it's relatively simple for me to do this, I'm in a lucky position in that I can afford to not work 8 hours, but personally I can really see a huge benefit.
I'm now a contractor in the very real sense. I use my own computer, I work generally when I want to (I set the total hours at the beginning of any month and choose what hours to work when within that framework).
In terms of pay, becoming a contractor means my pay went up and I can work 4 hours a day and do as well as I was full time, though I do try to work more like 4.5 - 5 hours a day (gotta pay that mortgage down).
What this means is that I generally only work when I'm motivated and "feeling it", the rest of the time I relax, learn, program, climb etc. It may seem like I'm expensive at > 2x what I was on when full time, but I think I'm giving way more for the time I put in, eg. no % of an 8 hour day spent being tired or "slacking". For instance I stopped the clock to read HN :) I'm also way happier than I was before.