The Psychological Trap of Freelancing | Hacker News Reader

The Psychological Trap of Freelancing

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"I went outside to get coffee and ran into three different neighbors who wanted to chit-chat. I wanted to scream, ‘For every word that comes out of your mouth, I’m losing money!"

This is a statement from someone who either hasn't been freelancing that long, or who hasn't realized that "brain down time" is just as important as raw coding hours. I've worked "for myself" for almost 20 years and for the first 5 I too panicked when daytime billable hours were derailed by "distractions". Once you push beyond that, you realize that those times away from your machine are valuable, and actually contribute to your overall well being, and your ability to code with a clear head, and an efficient mindset.

Wasting away "on salary" is a hard mindset to break. The answer is not to replace 100% of your salary hours with your own freelance work. You'll find even 50% of your previous salaried time can get just as much done, and make just as much money (assuming you price your services and value properly)

Yes, that's pretty much what the friendly article says:

> “If we’re already in the time-is-money mindset, we can reframe our leisure time as something that enables us to be more productive in the future,” says Whillan. “When we’re conditioned to think of all our time as ‘on the clock,’ leisure time feels abstract and unsatisfying. But if we tell ourselves that leisure time is another means to achieve that goal or financial outcome, that can make us more likely to take the breaks that we need, enjoy them fully, and be happier in general.”

That's interesting, because I think (I don't freelance) I'd look at it the other way: work funds my leisure, so how much must I work to fund the leisure?

Good point. But leisure is not a fixed box (for me at least).

I have been freelancing for 20+ years.

Fully agreed with OC, my clients are not paying for me to sit by the desk they're paying for solutions to problems. The more complex the problem, usually the less tapping on keyboard.

I know, some gigs are in fact just showing your face on Skype or in presence, I have come to avoid these regardless of leisure impact.

Sleep isn't fun enough to be worth 8hr every day. But we try to do it anyway because it makes non-sleep hours better. That's the sort of thing OP is talking anout.

Give it ten years, you'll change your tune.

No but you're justifying the non-work time again - I'm saying it's the _work_ time that needs to be justified (by what it allows me to do that costs actual money - okay, buy a bed, sure) _not_ vice versa.

I'd like to think that, were I not salaried, I'd work only as much as i needed in order to do whatever it was that I wanted to do with the rest of my time - not relax in a way that allowed me to work as much as possible.

Of course, in reality it's a slightly harder optimisation problem than presented, since time is a factor too, and maybe you can't afford to do what you want to do leisurely for 4 days a week, working 3, but it can be done at 3.5 each way.

My comment was re: the author's statement who was/is clearly struggling with the concept of freelance/not working on salary. The quote above is from Psychologist Ashley Whillan, and I couldn't agree more.

FYI my parent comment got 19 upvotes in a matter of just a few minutes - it clearly resonates with a lot of folks here.

50%? Even less in my case. 3 hours a day is plenty to get paid as much as I was before on a salary.

Honestly I find the time-related issue as a freelancer is having too much of it, and putting it to good use rather than just lounging around.

Do you include your self-employment tax, health insurance, and saving for retirement in those three hours as well? Or is that just making up what was in your take-home pay?

If one lives a modest life (no Ferraris/Great-Gatsby-parties), on a sensible financial management, one can have north of £/€/$1m on the side, in one decade(speaking for UK/EU/USA)(for contracts on IT/IT Sec/GRC/PM.

I think the vast majority of people would find it incredibly difficult to save ~7.5k per month for 10 years (assuming an annually compound savings interest of 2.2%), to hit 1M.

That type of savings goes beyond "no Ferraris/Great-Gatsby-parties".

Depends. If you have a SEP-IRA, half of that is pre-tax. If you've optimized your location away from California/New York on a normal tech billing regime (2x salary, maybe 3/4 the billable hours), you're almost there on tax savings alone; let alone housing expenses.

I didn't realize just how big a difference that pre-tax savings makes until recently. A couple weeks ago I thought there was an error when I increased my pre-tax savings and I noticed my take home pay only went down 66% of what I increased my savings by. I logged in and realized that the full amount I increased by was coming off, but I was saving 33% in taxes so my take home only went down 66% of what I expected.

For example, let's say I increased my bi-weekly savings by $150. Because it was pre-tax, with the tax savings I was still saving $150 but my take home only went down $100.

By the time I want that money, I shouldn't have a mortgage payment so I'll need far less money than I'm making now and my income tax should be much lower, not to mention the additional gains on a higher principle.

you done goofed if you're saving at 2.2%, he means investing in the S&P500 or the likes

While it's true the market has given guaranteed returns well north of 2.2% average for 30 years or more (the single worst 30 year period would of been higher than 2.2% average). However, when you cut that down to a decade it changes the picture significantly. There are decades where you could of actually seen a loss.

So without giving financial advice, I'd say it's more complicated than throwing it in an index fund if your time-frame is a decade.

Don't overthink this stuff. Most of the decades you wouldn't see a loss, so you're better off investing a good chunk. Keep 10 to 20% of your holdings in cash getting 2% interest if it helps you sleep at night.

I wasn't trying to overthink. But the market is volatile at the moment and the next decade is rather uncertain. Thinking you can just throw your money in and get 7% over the next decade and get to $1M may not be the best strategy.

We aren't talking about losing sleep over volatility here. We are talking about a situation where someone specifically wants to hit $1M in a decade.

The past decade was also quite volatile. So was the previous. Volatility is normal and timing the market doesn't work, so DCA in and forget about it.

I'm not suggesting one time the market. We've been in a huge bull run in the last decade volatile or not. But if you are shooting for $1M in a decade you might want to think about asset allocation more carefully than 100% in the market. That's all I am suggesting. I agree for the portion you are allocating to stocks, DCA in and don't try to time the market.

For example, I put several thousand in a Vanguard TR Fund in January of last year. It's still down 2% overall. Now on a 30 year horizon, no big deal. But for a decade that will significantly impact the compounding returns. Stocks are very volatile and may not be real desirable for a 10 year time frame.

I'm all for buy-and-hold, but you do realize that there's a group of people for which this is very hard? Psychologically, they'll have trouble staying the course when seas are rough.

It's figurative language. "1Million" in "currency unspecified" for 10 years isn't the exact price or time cost of a good life.

With ongoing contribution plans like retirement accounts, the thirty year average returns are relevant to a sixty year contribution cycle: Assuming no back loading (later contributions larger than early contributions). With a back loaded cycle, dollar by dollar thirty year averages require a greater than sixty year investment cycle.

Even a ten year average returns is typically going to require more -- a cycle longer than twenty years. Financial services are sold: caveat emptor.

You right.

Let's say a 7% annual compound interest over 10 years (which I think, is debatable). That puts you at $5,800/mo. I think my argument still stands?

Unless you started saving in the year 2000, then you would have had a negative return 10 years later.

https://dqydj.com/sp-500-return-calculator/

10 may be a stretch for many. 15 to 20 years should be achievable by many tech workers.

Once you hit your number, work gets pretty depressing. You realize you're making more from passive investing, just doing nothing.

In the UK IT contractors get paid a lot more if your frugal and have the right skills I could see saving £6k a month not being hard.

I can do 2.5k a month as a not massively well paid employee

If you don't need to pay for health insurance out of pocket or have a family, sure. This is possible.

I remember a similar feeling. Then I had a child.

Yep i would guess most freelancers would welcome and even seek some outside interaction, given that it's an isolating experience.

The problem though is how do you bill clients? If you're "working" and surfing HN you could possibly bill that, but walking around talking to neighbours doesn't cut it.

So many consulting companies would bill those hours anyway

Bill by FTE day/week/month instead. Much better for your nerves and easier to invoice.

Project-based billing solves this neatly. It also ensures alignment of incentives (ie, working faster / more efficiently yields higher effective rate, vs working faster -> get paid less), and is helpful in emphasizing value.

For time and materials projects, avoid hourly if possible; that leads to micromanagement and commodification of your skills. I recommend billing by sprints or by the week. Try to limit granularity to a day rate (w/ minimum increments of 1/2 day).

It's better from the client POV too. As a client, I have work that must be done, I want to know how much it will cost, I don't care whether it takes you 3 hours or 10 hours, and I especially don't want to hear "whoops... I miscalculated, I will need more time, gimme more money".

What is the argument that goofing on HN is more justifiable to a client than walking and talking?

I believe this is billed as "Executive Creative Time" in modern nomenclature.

What's the difference? Billing for any of these seem equally dishonest.

Charge for the project. "You logo will cost $5,000"

Hourly billing is for chumps.

Great response. I chuckled at the first 5 panicking as that's dead on. The reality, as counterintuitive as it seems, is that when you're not going full bore your work is better (read: qualitative not quantitative focus). In turn, you can charge more and people trust your ability to produce a result more. The rest takes care of itself.

The biggest problem for me was my (ex)spouse always pushing for billable hours. Every time I decided I wanted time off there was a constant nagging reminder and guilt of not only what it would cost to go and do what I want - for example cost of flights, accommodation, entertainment and food, but also the cost of the loss of income for that time off meaning that every time I was away from my keyboard it was costing me 10 times as much. There was always a reminder to "be responsible and not lose the income" which is a toxic mindset to be in.

These days I skip off work at every possible opportunity and to hell with anyone who can't comprehend my lack of will to bill every waking hour, partners and family included. I may not get paid as much, but there's so much more to life than work. Sure, I'm not billing when I could be and sure there's plenty enough work that I could bill 24 hours a day if I had enough energy and will power to do that, but I don't care. My mental health and my other passions need playtime or I'm going to flame out and never come back to this.

If you don't have a spouse that's supportive and encouraging of your need for downtime away from work, then you're caught in a double trap.

I'm happy I have neither this problem nor the ones in the article. I'm aware what my time is worth, but I'm also aware I'm making enough money that I don't have to worry about it. I'm extremely careless about money; not that I'm wasting it (the opposite, rather), but as long as there's money, I'm fine. When I have too much, I shovel it away to some place where it catches interest. I've got an accountant who worries about the details.

Recently, my son, still in primary school, had to check out a potential secondary school. My wife wasn't able to take him there, so I left early. Cost me €240 in revenue. That's a lot of money, but then again, I made more than that in the rest of the day, and I don't want to deny myself the opportunity to do these things with my son.

There's more in life than money. Sure, it's important, but only as a way to an end. Money itself is not the goal, life is. Don't sacrifice your life or happiness for mere money.

(Of course it's easy to say that when you can afford to. Not everybody can.)

I'm normally rather careless with money too... I earn far more than I need to live quite comfortably on a normal basis, there's rarely a month where I spend anywhere close to what comes in. But when I do want something, I don't think twice about buying it.

Recently I've been shoveling it into a long term project that will hopefully pay dividends in the longer term, but the jury's presently out on whether that will actually come to fruition. Time will tell.

I agree, not everyone can afford to live as frivolous a lifestyle. I've been very fortunate to have had the choices and opportunities I have to be able to make headway. I try never to take that for granted, because it doesn't take too many wrong moves and you're the one trying to scrape your way to get above the poverty line again.

Out of curiosity, what kind of work do you do?

I'm pretty much a jack of all trades.

My professional expertise and where I've spent the majority of my career is in software engineering, systems architecture, devops and test automation. In what little spare time I have I'm co-founder and instructor for an educational organic farm which means I'm often playing carpenter, mechanic and vet as well as being a full time Dad.

Would love to talk with you more. Do you blog somewhere? I have an email in my profile.

I haven't blogged in 100 years. My email is on my profile too, feel free to hit me up.

If it is, it's not visible. This is what I see: https://www.dropbox.com/s/go1ybpig05afqd6/no_email_listed.pn...

Sounds like a shitty spouse

It's easy to make a judgment on one scenario, but being unable to get out of that mindset doesn't make her a shitty spouse, it's a fear that's been brainwashed into her by her upbringing. She is more than her fears.

Thankfully though, I'm no longer in this position. I was rather more pointing out a toxic mindset that you need to overcome not just in yourself but potentially in your spouse and the rest of your families.

FWIW I don't think this has to be tied to a spouse or partner. I've pushed myself close to that place for other reasons.

I had a very comfortable childhood and watched moderately successful parents in a place which has little entrepreneurship fall apart over time. I was protected by good skills and work performance, but in combination with the financial crisis this pushed me to a toxic place as I looked to protect me and my family.

First, my father got so ill that my mom and brother had to be his caregiver. For a while the family business continued to some success, but my brother was never invested in it. I realize now that I worked my ass off to escape and do my own thing and my brother didn't have direction. Over time with the failed economy and then my Dad's death they ended up closing down the business. My brother has drifted and my mom gets by, but it's not the life they expected.

> being unable to get out of that mindset doesn't make her a shitty spouse

This is an incredibly helpful reminder that people should not be reduced to their flaws and relationships are not the mere sum of their drawbacks.

Because people are risk-averse, it's easy to focus on what's bad and take for granted what's good. So when a relationship becomes challenging, people can reflexively give up (or throw away) rather than work with and get through.

Relationships are worth maintaining and building, even when they become difficult. In some cases, relationships are worth maintaining especially when they become difficult because the relationship becomes stronger and promotes greater well-being to the degree that it has survived hardship.

Indeed they are... though in this particular case there were a bunch of other factors that caused this particular relationship to fail, but even with those considered, they don't make her a shitty person, she is more than the sum of her parts. Just because the relationship was unworkable, doesn't make her a bad person or even a bad spouse, they just make us bad partners to one another.

I have the highest respect for people like you who can make comments like these. It takes a lot of maturity and mental creativity to see things from others' perspectives, and if everyone had your mindset the world would be a better place. If you are ever in Chicago I'd love to buy you a coffee/beer and hear your story.

Thanks, if I'm ever in Chicago, I may take you up on that :)

Meh, the guy admitted he was careless with money. It's possible his spouse is not as comfortable with living paycheck to paycheck as long as things are fine (because there could be times where it's not fine). We don't know anything about their financial situation, what kind of emergency fund he has built up, or if there is any sort of planning going on for retirement.

Communicating frequently and financially planning together is a key part of a relationship. If this is lacking that does not make the spouse shitty.

Exactly

It sounds like you have serious issues with your relationship.

Had, don't worry, that's no longer a problem. Past tense.

If I were in that position, and wouldn't want to break off the relationship, I would probably try to change billable-hours to billable days (or even weeks?) I would then try to keep strict 8-hour a day work-schedule (ok, maybe even just 6 to be honest :-)

Like, I am programming in professional fashion for around 10 years, and there are hours, where I make more progress than previous days. I don't want to be fighting for billable hours.

I've been programming since I was 8 years old. Professionally for the last 25 years. I've seen entire classes and subsets of programming paradigms dominate the industry and fade to irrelevance. There's enough to keep up with, without stressing about billing. I try to carry billable days or even work on retainer such that a minimum income is guaranteed and anything over and above is billed at a daily rate.

From everything others have said, the jump from "programmer" to "consultant" is the hardest leap and one I've had considerable difficulty hurdling. My existing clients are often actively working against me to make this leap because they look at me as someone who can solve their problems in minutes and want them fixed now. It's on me to help change their mindset to one of allowing me to teach them to solve these problems for themselves.

My greatest value is in teaching them to be self sufficient. It's helping them to become more than the sum of their parts so that when they call me, they're calling me to show them what they're doing wrong and show them how to fix it, I'm not fixing it for them.

Whether you're freelancing or doing a startup, it's critical to have your spouse's support. Entrepreneurship is extremely difficult and if you're in a serious relationship, the other partner has to be ok with the ups and downs. In my experience, few are. I've seen numerous early stage startups fail when the spouse of one of the co-founders pulls the plug.

The difficulty in achieving this over a long period of time is one of the things that makes the founder's over sized equity stake make a lot more sense. You're literally putting your relationships on the line to make your company work.

They not only have to be onboard and be supportive, but they need to understand what it takes, the risks that are going to come up, the fine line that needs to be walked to balance your success, your mental health and your relationship. They need to really understand that and be capable of rolling with it.

Entrepreneurship takes a heavy toll on relationships, and I think honestly, her lack of ability to cope with the stress had a heavy influence on my ability to cope with the stress. If it had been just me with my own thoughts, my resolve and resilience would've been far stronger. Having to balance the needs of your partner makes tough and potentially risky choices ten times harder.

Reminds me of Avicii, who wanted to stop touring but his peers reminded him how much we would lose, and how irresponsible he was to turn down ”unique opportunities”. So much for his mental health

Is there a way to tackle the interpersonal problem of perception (regarding time invested in work) here by presenting a nice spreadsheet showing time worked and linking it to income appearing in the bank account? I'm not sure whether this would solve the problem rather than just create new ones, but if I was a freelancer and my significant other was suffering from misperception my first instinct would be showing them the data.

Of course, if the underlying issue is that they want you to increase your income target, then that requires a different solution.

I had the opposite experience from the author of the article. It must have been because I valued my family time over my working time.

When my son was in high school I went from full time employee to part time contractor. It was great. Since there was a clear contract I didn't have to worry about office politics or my off-work time. I focused on working hard while working and I focused on my family when not working. I took every summer off-work.

Based on UK experience a contractor (in tech) would aim to make at least 2-3x your gross as an employee and pay less tax.

> I wanted to scream

Why not just say something along the lines of, "Sorry, I work from home and I'm on the clock but just popping out for a cup of coffee - chat later.", with a smile? It's much better for your mental constitution than holding in a scream.

The real answer is to bill based on milestones instead of billing based on hours. Hourly billing in my experience is just a slippery slope to being way too conscious about time and creates a conflict of interest in that it is in your interest to take longer, but that isn't in the interest of your client. Billing off of milestones aligns interests because it is in both of your interests to complete milestones quickly. The only thing you have to watch out for is scope creep which can be easily addressed with contract clauses that address this.

"I've worked "for myself" for almost 20 years"

What were the early years like? How did you get clients, and how long was it until you started making decent money?

> "I went outside to get coffee and ran into three different neighbors who wanted to chit-chat. I wanted to scream, ‘For every word that comes out of your mouth, I’m losing money!"

That was the point of the whole article... Wrong way to look at the problem. A freelancer who get paid by project, not hourly, will never encounter this kind of problem. Hourly assignments are like being an employee but without any of the benefits.

I went from hourly, to per project, to weekly billings. When I charged hourly I ended up working A LOT more than 9-5. Per project work was good but I ended up losing a lot of prospects in the quote. Since many of my projects ran into the 20-40k range, my closing rate was 1/10 (already pre-screened, what I deemed as high quality prospects). This made me feel like crap. Instead of per project, I decided to increase the rate, so now a project may be 30-50k+, figure out how many weeks it may take me to complete it (rough idea, but this is not important) and then divide into a weekly rate. What ended up happening is me tripling my hourly rate and invoicing weekly. This was game changing for closing leads, now my rate is probably 8/10. You get all the benefits of having to work a lot less but charging a lot more. I will be honest, some days I feel like shit (who doesn't) and I don't work at all. I don't feel bad because on the days that I feel fantastic I get into the zone and knock out a TON of work and usually get ahead. Client sees progress weekly and they are happy. It helps them that they don't have to pay a ton of money in 2-3 payments and can spread it over the course of months.

In terms of happiness, freelancing definitely comes in flavors. There is the grunt work, the highly paid freelancer, the consultant and the product-based business until you go full startup or large company. I have seen all tiers. Currently I am a step short of having my own product while I figure out what that will be. You definitely need business acumen and people skills to succeed in the consultant stage. For product business you gotta go a step beyond that and either do really well as a consultant to bootstrap, or just work your ass off to get it going. My advice for anyone in freelancing now, who does not have people skills and gets latched onto hourly work, you may want to reconsider your choices. Freelancing can be highly stressful and demoralizing, unless you take the steps to go into consulting or beyond. It's a ladder, just like your corporate gig, you gotta do the work to move up or suffer where you are stuck.

There is a ton of wisdom in this comment. Others would do well to heed your advice. My experience as a consultant and product business owner has very nearly been exactly as you’ve described.

Same here, the comment summarized all the stages we've been through.

On top of the weekly invoices, I also created "subscription" invoices, which I charge automatically instead of waiting for invoices. It really was killing me last few years. I don't even want to check last year's lost invoices...

What did you use to make a subscription invoice? Stripe? Or another platform integrated with Stripe?

I am curious how you transitioned into a product. How did you validate your product?

Freshbooks and Wave both offer repeatable invoices - I'm sure other invoicing/bookkeeping services do as well.

I "Flintstoned" my small SAAS with automated monthly Freshbooks invoices until I had the time and money to get Stripe properly integrated. It meant we could get paying customers from day one with one less programming/integration headache to worry about.

Thank you! This whole time I didn't realize Freshbooks allows you to create recurring invoices that let people save their cc details. Doh!

Not OP, but I use waveapps.com for subscription billing. It was among the lowest cost option I could find, it works well, and it produces nice invoices that you can white label. Once the customer has entered their CC, you can also process incidental charges as necessary above and beyond their subscription. Most clients don't want to deal with billing either, so this just runs the card on whatever frequency you want and allows you to run the card whenever else you need to. If someone has a better suggestion, please let me know.

I am using Stripe with a self-hosted CRM software I bought (slightly modified for other reasons, but not the payment module.)

Stripe alone can take care of it. Subscription or any type of recurring invoice system would be sufficient enough to stop collecting the check. Although, it comes with nearly 3% fee, which is fine because I see it as "what if I couldn't collect one of these invoices". That 3% really doesn't hurt much at the end of the year as long as you collected 100% of your invoices. Missing 2-3 invoices can truly hurt though.

Would you mind speaking a little on your path from salary to freelance? I want to make the jump but it seems scary and I don't really have anyone to talk to about it? How are you finding work?

My start in freelancing was forced. I was laid off as part of a merger for lack of face time (fully remote, while others showed up in office so naturally they were chosen over me). It was really tough. I lived in an expensive area all of a sudden without an income. I guess the reason I did not go applying for jobs was just the sour taste that the layoff left. I felt angry, not at the company, but at myself for letting others dictate my life.

I started on Upwork. It was a bitch. Upwork is known for low quality, but I didn't have any choice. I just tried doing as best as I could for everyone I dealt with and that seemed to manifest into a 100% rating, which led to even more contacts. At one point some of the clients weren't so terrible. I think the first year I did 40k, much much lower than the salary I had, but it was enough to pay the bills. I also moved to a much more affordable area so it helped.

Having 100% rating on upwork lead to agency work. Agencies are great, if you do good work they often have a steady workload for you. You know what comes and when and can schedule more time to work on other projects, thus upping your income. If you are a developer working with an agency, this can be very rewarding if your charge your worth. I am a designer and our industry naturally caps what people think I am worth. It sucks.

At one point I was doing well enough that new clients I was taking on were willing to pay per project. It was super hard and scary, but I said bye to agency work except for 1 agency where I befriended the CEO. Per project work was really nice, but I learned quickly that if you can't sell your value (which I couldn't at the time as a "designer" and just lacked experience in this area), it can be difficult to close larger quote projects. People are just scared of large numbers. Tell someone they should pay you 50k and they run away (I am sure that other's experience may differ and people don't mind paying them that sum). I tried a bunch of things, price anchoring, huge fancy proposals.. yada yada. What happened is that I was getting burned out on huge fancy proposals and not getting anything out of them and that was the breaking point. I figured, I am done with proposals, from now on I get people on the phone, talk to them, and if they don't agree at the end of the call then I won't put any more effort. THIS WORKED.

Now the process is simple: Schedule a call, we talk, I ask you about your BUSINESS problem and offer you a business solution. No talk of design. No talk of development. What is it that is costing you money or not making you money? Let's change that.

As far as new work it's 100% referrals at the moment. However, I know that this can't last forever and at some point I will burn out (I already feel this after 3 years). My goal is a product or a product-service (have someone else do the work I offer at a reduced scope for a cheaper price). I have read about several people here on HN doing this and making a killing (by my definition). This is what I look forward to next, but it has not been easy. As a side note: if anyone is running a product service or a SaaS and started in a similar fashion, I'd love to hear from you!

I'm starting up something similar to this, low fee digital business consultancy that's at a reduced scope for quick turn around and maximum results for clients. It'd be great to connect with you! Let me know where I can contact you :-)

Had did you transition from the hourly work to weekly? Why do you think your clients are more accepting of 10K for 3 weeks vs a 20K quote?

When it comes to products do you have any thoughts on competing with big players? I have a few now, I am hoping being local will get me in the door and make the client more comfortable with me than a website offering it as SaaS.

My advice for consultants / freelancers. Setting yourself up as a general company with a name goes a long way. Not as John Doe consulting. Some larger companies don't like throwing money at a self employed consultant. If you show up as Compu-Global-Hyper-Mega-Net they treat you differently. Also people skills is spot on. Even if you do have people skills, it can help a ton to have a sales guy working for you as well.

Transitioned simply by trying something different, until per project quotes succeeded. It was hard so I gave up and decided to try something else, seemed to have worked.

My projects usually last a month or two, sometimes longer. Smaller businesses with smaller teams seem a lot more accepting of weekly invoices. It becomes a line item for them, just an expense among many (this is my guess).

In terms of products, I am not qualified enough, but if I had to guess, it's best not to compete with the mega SaaS. Position differently and find a unique niche that won't necessarily make you super rich.

As for naming, that's an interesting point. I don't know if it's true as I've seen consultants go by their name and make a lot of money. Some people simply build a brand out of their name and become well known for the work they do. Sadly, I don't have a brandable name so I went with a business name. I think there is some truth to your point when it comes to being seen as a company to do business with than "hiring a consultant".

What's the difference between "the highly paid freelancer" and "the consultant" for you?

Not sure about the OP, but to me... The freelancer is building product on their own, or mostly so. Somebody hires them to do the majority of the project. "Hi, I need a website that does X, here's $20k to build it."

The consultant is embedded in an existing team and either building some niche portion of the product OR providing some sort of training. "Hi, I need a website that does X, we're only qualified to build subset Y, here's $20k to build the remained OR train us to build the remainder."

When I think of freelancers, I think of 3 tiers: 1: the bottom of the barrel. They will beg for anything you give them and will do it for $5, or even show you a free demo (by building out part of the project, or designing it) They will bid on every project on Upwork. My guess is 80% of Upwork falls into this category. 2: Freelancer who charges a mid-range or "market rate" or even above market rate. They can't fathom that they are worth double what they are charging. 3: The highly paid freelancer - the person who decided to double their rates and "capped out" at some high rate. This person thinks he can't go any higher, he tried, but it wasn't working. Sometimes they do really well.. like a developer charging top rate and putting in 8 hours a day or whatever realistic amount of time developers work. This freelancer can make above market salary and some are perfectly fine with it.

Then there is the consultant. The person who realized that time does not equal money, that businesses pay for value, or more importantly, they want to know how much money this is going to save/make them. The consultant charges for value, at a markup. The top of the ladder make over a mil a year, the ones still learning can make very good sums of money, but its all limited by them. If they don't do the work, the money stops. This is a great place to be, but you quickly learn that you don't want to be stuck here, unless you are the top tier consultant and you love your work and don't mind the day in day out. I have not heard of too many of these, but they usually turn into product businesses well before reaching that.

If there is one thing any aspiring freelancer needs to know is that their mind is their worst enemy. Overcome your mind and you can go a lot further. I was and still am a victim of my own mind and work on overcoming it.

Freelancing can be highly stressful and demoralizing, unless you take the steps to go into consulting or beyond. It's a ladder, just like your corporate gig, you gotta do the work to move up or suffer where you are stuck.

I have one sticking point I'd love to hear what the HN crowd does to deal with it.

I'm freelancing and I find gigs that are long-term via recruiters / LinkedIn. And never directly with companies. While the pay is high, the feeling is I'm just another employee, except temp.

How do you market your skills directly with firms, and where do you go, if you're not the 'social media broadcaster' type who's on Twitter / etc. all day? I DO have people skills, I DON'T spend any time doing presentations at tech conferences or blasting myself on Twitter / social media. Do you partner with a marketing type? Or become that type?

Outsource this to a profiler/marketer to build yourself an identity Don't work under your name but create a brand even if it's just you ;)

This sounds like a really interesting idea, have you done this yourself or seen any good examples of it?

Yes, I know companies but do that very well, but they are in France and work only in French. Distinctive features to look for : small companies (2-3 is best for their focus on you, 10 max) but it's just my opinion. Once they grow, they tend to lose their initial verve. It doesn't seem to scale well.

Can somebody recommend a person or company that they like for this task? I have a company brand, good enough customer flow to stay afloat, but extra hours I could put towards more work.

We offer cybersecurity services and due diligence for financial institutions, healthcare and acquirers, so it's a pretty specialized target market.

I think the problem is that, in the U.S., recruiters have captured that market. Since they captured it, they also capture 20-40% + of the rate because of this "added value." And I say that with the maximum possible cynicism.

How do individuals compete against recruiters? Why would this marketing person take a few grand from me, when they can be a recruiter and take 20-40% + of my rate for doing nothing but the intro?

I'm a tech copywriter and have had a couple of developers reach out to me with similar needs. It was unexpected, but it's been interesting exploring the issue with them and I'm curious if other developers are interested in chatting about it too. If that's you, then please feel free to hit me up -- email is in my profile :)

You are describing that you want to want to get a job as a contractor. So apply for a job. Companies advertise that a lot, sometimes through an agency. You can't expect get the benefits of an agency without paying the fee or doing the work yourself.

> I went from hourly, to per project, to weekly billings

I have tried all three, read all the HN favourites on why value pricing is the way; tried charging for roadmapping; and yet I come back to the most stressful of day-rate (hourly by any other name), unable to break this in 15 years of technical consulting.

Why? Because with per project billing I was losing 30-50% as client expectations were different to mine. When I added 30-50% to the prices, I didn't win the jobs. I could write a spec 80 pages long (which no client would pay for) and still there were variances which cost me.

On my current $50k+ project I've got the client to bear the risk because he's the worst client for cost overruns I've had, and it's on a time and materials system. However because he has no more money than the top range of estimates, and because he wants everything and more, I feel trapped and as stressed as if it was fixed price (which it's turning out to be).

It feels like I am missing something obvious that other developers/consultants have got. I want to price on value so I'm not stressed about every minute's productivity. My clients want fixed price so the risk is stacked on me; they won't/can't do sprints (often because their board of directors won't approve it, even if they say they see the benefits); and the projects are unique systems each time, so the estimation is not accurate.

I freelance/consult because it pays well, but this way of working sucks.

Have you tried doing a monthly retainer rate?

You come up with the SOW and say: "This will take X months provided there are no surprises or delays, at a rate of $Y per month."

> My clients want fixed price so the risk is stacked on me...

The risk should be spread evenly. If you're bearing all the risk then it's not a good relationship.

The reason I did weekly vs monthly pricing is simply because it breaks down to a "smaller" amount, visually ;) But yeah.. in essence you are just asking for a monthly retainer. Also, with weekly you don't need to worry about collecting as much in case of nonpayment, at most you'll lose a week's worth of pay.

The way I've seen a large and successful agency handle fixed bid projects was to write very detailed waterfall requirements and attach a price to that. Any scope creep meant new work with new requirements and a new price tag. The key was to break the project into smaller phases and price each phase. The detailed requirements are a contract between the two parties. They have dedicated product managers help the client determine what they want and come up with requirements.

You might also just have the wrong clients. I've found moving upmarket reduces stinginess.

It may also be you just have trouble saying no to your clients and need to work on setting boundaries with them. You may not need them as much as you think.

I freelanced for a couple years, and that was how I always did it. The contract spelled out exactly what functionality was included, and that was priced on its own. I often did projects where it was assumed that the completion of one contract would immediately start a new one, but that new one was also similarly defined and priced. This enabled iterative building out of a system while giving the client the ability to judge value of each piece. I usually focused on systems that I could define a good ROI for (replacements for existing systems with high maintenance costs or requiring lots of man-hours to operate, etc) because it's pretty easy to sell almost anything to a business if you can show them that within 2 years it will have paid for itself.

What is your change request process?

> What is your change request process?

I have done everything from formal documentation of changes, requiring pricing and sign-off for every variation, to vaguer schemes.

The change request system sucks; it loses sight of why we're building the software and turns into a war of attrition.

The issue is always they say the spec is open to interpretation and they meant this, or they expect it to work this way (which is slightly different now they see it, but in scope because every single interaction can't be specified in advance). And either way they see no reason to pay.

So it ends in arguing and bad feeling; the client has an expectation that's not met without paying more and feels it's my fault, that they're paying when they shouldn't. I've lost time and much emotional energy.

I have gone as far as to have a "What's not included" section in every contract which helps, and that if it's not mentioned specifically then to assume it's not included; but it's a non-ideal situation.

Are you not maybe specifying too much too early on?

Back when I did some freelancing gigs, the general advice I got was to spec a high level, general proposal which included all the client's requirements. Broadly. Then decide on iterables, with the spec (and timeline and effort and payment) for each iterable being done prior to commencing work on it. The key being to have a working system after each update. Sound familar ;D

The client's risk investment in you not completing the project (and them being left with some obscure code and no system) is minimised. Your risk is minimized as the client actually gets to update requirements at each iteration and you get to charge depending on implementation details for those changes. And if they feel you are taking them for a ride, they have a conpleted system up to that point in time, so have the option of looking at other developers. Which also allows you to bail as well without dropping the client with an incomplete project if its not worth it continuing.

My experiences like that went well - frequent communication kept the client informed of progress, they were able to manage adjustments (cost and time to implement), and at the end of each iterable they were left with a working system (even if rudimentary in the early versions) which they could build off of things went south.

I usually got paid more out of those, and ended up doing more work for them because of the relationship built.

> Are you not maybe specifying too much too early on?

> Back when I did some freelancing gigs, the general advice I got was to spec a high level, general proposal which included all the client's requirements. Broadly. Then decide on iterables, with the spec (and timeline and effort and payment) for each iterable being done prior to commencing work on it. The key being to have a working system after each update. Sound familar ;D

This is exactly how I want to work! The pushback I get is that the company's board of directors won't sign off on a project where the total cost isn't known.

I have explained all in your third paragraph, and even when the manager/CTO/CEO 'gets' this, the board don't. Because it's beyond their understanding as non-technical, and sounds like being taken for a ride (and I get it; if my garage did this, I would expect I was being fleeced).

This is what I need to break-through.

Ya, fair enough. It sounds like you've exhausted the paths that every waterfall developer exhausts before moving on to some kind of agile framework (ex. Scrum).

Clients don't like it as much of course, but the we can do is convince them that it fits the way that everyone works better -- nobody knows exactly what they want up front, and if they do, then they're wrong because as soon as they get to use the thing the never existed before, they'll discover things that don't feel right and they'll want to change them.

But working (and billing) in weekly Sprints seems to work very well once you've convinced your client that the framework is the right way to do it. Client want a quote, but we tell them we can't really give them any sort of estimate until we see how they work (with us). So, a two week trial period is often a good way to get that going.

> But working (and billing) in weekly Sprints seems to work very well once you've convinced your client that the framework is the right way to do it. Client want a quote, but we tell them we can't really give them any sort of estimate until we see how they work (with us). So, a two week trial period is often a good way to get that going.

I like the idea of a trial period. Get them on-board with low risk to them. As this pattern of working is exactly what I want but can't get clients to do (see my reply to your sibling commenter).

A difficulty is they invariably say the last agency/project did fixed price, so do any others they're talking to, so even if your results are good why aren't you.

They don't feel safe, and it's that safety I need to give back to them.

> It feels like I am missing something obvious

I'm not sure if you're missing something obvious ..this is HARD, I totally know what you're feeling like.

I was talking with a buddy other day ago (also a consultant); I was grumbling about how clients have "urgent" projects and then proceed to sit on the project proposal for a few weeks...

His response went something like this: "look, there are reason's why consultants are called in to work projects - and those reasons are not that they are well organized, well equipped, well funded ..etc etc". Oddly, that made me feel a bit better.

Ah, yes, the "hurry up and wait!" projects. If it makes you feel better, my 9-5 for the man is full of them too. Working all weekend to come in on Monday and find out it was all in vein is no fun.

You can somewhat combat that hurry up and wait attitude by making yourself feel more scarce. I typically say something along the lines of getting booked often and quickly so I can’t make any promises on being available after one week. This puts some pressure on them to respond within a week. In most cases if I haven’t heard back in 2-3 days they are gone for good.

When I added 30-50% to the prices, I didn't win the jobs.

That smells like a market segmentation effect where you're working in a market segment where normal is "part of how consultants make us money is by reducing their consulting fees." That's common, but not universal. The solution usually better clients. Some you will have to find (and finding good clients is harder than finding bad clients). But some existing "bad clients" will upgrade because of the relationship with you...good clients value the relationship more than price. Clients who prioritize price assume that consultants are fungible to a large degree.

This is the way to do it.

The article conflates "freelancing" with "charging hourly." The problems it outlines mostly go away when you do value-based pricing, paid weekly, monthly, or even quarterly.

I much prefer hourly to day or weekly rates. When I charge a daily rate I feel I need to work a full 8 hours.

I currently use a timer app and bill my exact working hours. It's great because when the weather is nice and I want to go sailing or cycling, I just stop the timer and go.

I have a set monthly salary I want to make. If I'm on track to hit it, no pressure to work. If I'm behind, then I'll put in hours.

I found transitioning to full project billing extremely satisfying.

The main downside is not clear project requirements, scope creep and you said / I said issues.

One way I found very helpful in mitigating it is getting a prototype of the UI, with some comments about what's unseen.

Getting an "idea to prototype" thing done is not expensive in context of any 25k+ projects and gains are huge on both sides.

On the other hand, equating time (especially work time) with money helps with making sense of what money is actually worth. These days every product category is full of well presented temptations in any price range.

The correct way to evaluate a 1000$ phone, a mechanical keyboard with custom keycaps, fantastic coffee machines and barbecues and car parts and designer handbags is to put them in relation to "how many hours do I have to work for this purchase".

Your approach also helps to illuminate the day to day spending and associated habits. Rather than thinking in terms of a monthly paycheck, I can think in terms of, "How much money did I spend today and how much did I make?".

It's also arguably even better for evaluating whether it's worth trying to spent time trying to get a $20 discount...

Discounts/ loyalty cards need to be treated the same. Some aren't even worth finding in your wallet for the measly discounts they give. Many just exist to prevent you comparing prices elsewhere.

Yeah, exactly. Maybe we could all just stop spending less money, then we'd have more time. There's a well known correlation between people who make more money, tend to feel the need to spend it[1].

1. https://www.quora.com/Do-most-people-spend-more-when-they-ma...

"The wealthy tend to spend less of their increase in income than do poorer people"

I rather think that the causality is the other way... if you don't spend money just because you have it, you're going to be wealthier.

Having more money gives the option to spend it or save it. When you make $40,000, you don’t really have the option to save much compared to people making $100,000.

I think it's mostly as simple as money having marginal utility. The first $30k a person make per year goes to absolute essential (ie. food, housing). The next $30k goes to really nice the have things like better transportation, medicine, etc. As a person makes more money, each additional dollar has less of an impact on their life.

That is also true. But I don't like the original article treating "being wealthy" as the, uhm, chicken?, in this chicken-egg problem.

This is why I don't pay much attention to small discounts, especially when it requires handing over your PII. Also, a half day's work for a custom keycap set is a no-brainer. :)

A thousand dollar phone is a thousand dollars; we invented money in order to have a universal metric of value when comparing things like "working in the fields", "bucket of nails" and "cuckoo clock".

These days, most people, most of the time, can't decide to work 20 hours more in order to afford a new thingy.

If you're on salary, that's it.

If you're an hourly worker with your hours assigned by management, that's it. They are unlikely to assign you overtime, too.

If you're a freelancer with jobs coming in, you might get paid per hour -- but there will be a cap on your hours. Or you get paid per job, in which case there is a cap on the money available, and working faster will enable you to have more free time but not more money.

Very few people always have extra work available for them to do when they decide that they want to work more; those who do tend to either be financially secure or in dire circumstances.

You can’t directly increase your income by working one more hour if you are salaried . But you can certainly affect your growth trajectory by working harder/longer/smarter. You trade the marginal hour in a way that has a lagging, probabilistic increase on your salary.

> working harder/longer/smarter. You trade the marginal hour in a way that has a lagging, probabilistic increase on your salary.

I feel like that has a really poor ROI when you look at from a time spent perspective. The amount of extra hours/effort you have to put in to get a small increase chance of a promotion seems a very bad trade. Obviously I don’t have any data to back that up, but I feel that a lot of people invest a lot of effort for a minuscule chance of improved future income.

If it’s only a small increase in your chance, then yeah the roi is bad.

We have invented money, but what is 1000$ really and how can I tell if I can afford something that costs 1000$? Because I get a loan for 1000$? Because I have 1001$ in my account? What is a fair price for a phone anyway, and how am I influenced by marketing and by the people around me, by emotions?

Equating time to money is just a small start for 'feeling' the true cost of an expense, and is just a small part of understanding and managing one's finances.

What is $1000?

It's an entire month of work at minimum wage in the USA after taxes.

It's about two weeks of minimum wage work in Australia.

It's a year of minimum wage work for the government in Afghanistan.

It's less than a week of after-tax wages for an average US welder or a Massachusetts high school teacher.

It's two weeks of after-tax wages for a high school teacher in Oklahoma.

It's the monthly rent of a two bedroom apartment in Phoenix. It's less than two weeks' rent of a one bedroom in New York City, and less than one week of a one bedroom in Manhattan.

And that's why we use money to account for these things.

That only tells you whether minimum wage people can afford things. What does it matter to me if some folk have to work for a week for a premium steak?

Why would a football player care that he earns in a day yearly wage?

People buy things based on whether they themselves can afford it, not others. It's nice to appreciate your wealth compared to others but i doubt if anyone makes purchase decisions based on other people salary.

I completely agree, but would like to note a common fallacy following this logic.

If my hourly rate is $20, I might think that a $200 phone is worth 10 hours.

The thing is, the majority of those $20 I make are probably already allocated to things like rent, food, transportation and so on. If those things account for 50% of my expenses, for example, the $200 phone is actually worth 20 hours of my time. (That is, unless all my necessities are already accounted for, and I'm working 10 hours on top of what I usually work to buy the phone.)

It's important for freelancers to account for what is essentially their "operating expenses" when making purchasing decisions.

You could do it like that - subtract 'essentials' (for some definition) from your hourly rate - but you don't have to.

You could also say your rent et al. are X hours, and watch you don't 'spend more hours' than you work.

If you earn twice as much one month, you don't spent twice as much on rent, groceries, or commuting that month. You do spend more than twice as much on tax, probably should spend twice as much on savings and pension contributions, and probably will spend twice as much on living large.

So surely it's important to account for the marginal cost of spending money, but not operating expenses?

Indeed. I use something instead called "savings rate". How much per hour of the money I make is not spent in basic stuff? I also go one step further. In calculating this savings rate, i add to the 40 work hours, much more that are spent for work and/or are not actually free time: commuting, dressing for work, shopping basics, washing dishes/clothes, ... etc. From there you get the real non-free-time-cost of anything non-basic you buy. Turns out things are much more expensive than they actually seem like.

+1 this is what I also came here to say. I have mostly worked as a remote consultant in the last 25 years. My wife and I talk about large expenses costing how much of my time. This leads us to spending a lot of money on travel because we love to see new places and not so much money eating out and we own a modest but nice house.

Another thing about time vs. money: I found that it feels really empowering to turn down jobs that are not a good fit: consciously giving up money when I wouldn't learn from or enjoy a project and allocate the time to spend with friends and family or learning new things.

I've done this for 20 years. In fact, when I was out of college, I was a SDE at a top technology company. My personal motto was that I should never own a car that costs more than two months of my salary. All my other young counterparts were doing dumb things, like buying really fancy cars when our first tranche of stock options vested

Even today, I think about the cost of money in my time, since I value doing thinks over owning things. I typically justify buying nice laptops with a three year amortiziation, but cell phones, I buy cheaper ones because I've broken so many....

(And that mechanical keyboard, surely a $100 for something that will last several years while performing your job 10 hours/day is a worthy investment, if you're into that.)

Until you break the cycle. You can live a good life on 3 hrs of work a day as a developer. Working full time in today's world is complete non sense.

But people who see everything through the lens of consumption have a long way to go I guess.

"When economic necessity is replaced by the necessity for boundless economic development, >>> the satisfaction of primary human needs is replaced by an uninterrupted fabrication of pseudo-needs <<< which are reduced to the single pseudo-need of maintaining the reign of the autonomous economy." - The society of spectacle

My biggest mistake at the beginning of freelancing was that I sold more or less 8 hours a day of work. That's too much because as a freelancer you do not have vacations or paid sick days, and contract. So I corrected it to 120 hours a month, that means that:

* I can recover sick days if needed.

* I can work a little bit extra for 1 or two months to get a 1 week vacation.

* I can use the extra hours a day to do some marketing/networking/sales.

* It's easy to take half a day off and recover it in 2 or three days.

* I needed to charge more per hour to make it work, but now I'm pretty happy with it.

(Edited: Formatting)

That still seems rather high to me. I usually aim at having 3-4 billable hours per day. The rest of the time, if I'm not slacking off, I put into improving the product or sales.

Even for salaried workers, I don't think anyone would expect them to do actual productive work for more than 3-4h of programming per day (rest of the time being spent on meetings, planning, office distractions, etc).

Even in an office environment I've seen rough estimates of 5 (6 at most) 'billable' hours per day for longer term projects. The rest is admin, housekeeping, chitchat, etc.

Studies seem to support the 4-5 hours of useful work per day over long periods. It's easy to peak at 8+ for a short time (and twice as easy for personal passion projects) but it wears off.

Five hours of working on something you like, often feels like ten minutes working on something you don't.

The real benefit of freelancing is that you will tend to pick work that you actually want to do; which also means that you may indeed end up working more.

But then again, giving people more choice is not good for everybody. Some people will simply turn their lives into a freak show.

I am a freelancer, and I chose this path specifically so I could work less, not more.

For me, money is just the road to my personal and family enjoyment. If I can’t enjoy life while making money, what’s even the point of making it? The road to happiness seems obvious to me: charge more (and automate income), work less, have more free time.

I can really echo this way of thinking. I chose this role because I knew it was flexible (sometimes by choice, sometimes by chance), which means the downtime is built-into the price.

I frequently (happily) take days off to be with my daughter, and can very much enjoy the downtime when a client needs to have me out for 4-5 hours instead of a full 8-10.

The only time this thinking creeps in is when scheduling longer vacations. It's somehow easy to spread the cost of downtime over a day or week, but much more difficult to spread a chunk of vacation 'downtime' over the rest of the year. I'm actually toying with the idea of paying myself quarterly to see if I can curb this sensation.

My advice is that you find a freelance assistant who is good enough to take your directions but not necessarily able to think/do what you do.

That way you can delegate out some work while on vacation without taking too big a hit.

Yep charge more so you can work less should be the path for any freelancer. Know plenty of guys that are afraid to take holiday because 'christ look how much that non billable time is going to cost me' :-/

One thing I would like to add... I created my own solo S-corp and started on the path of contracting. I have been successful enough to minimize my payroll taxes using a solo 401k (~18k max contribution and then my company can contribute 25% of my w-2 salary). Now I am at the point where I am investigating how to setup a defined benefit plan for myself to defer 75-100k in payroll taxes. Most likely a cash balance plan.

I think most employees at FAANG don't realize how much they really give up paying CA taxes and a significant portion of Federal taxes.

Then I realize why FAANG companies don't have defined benefit plans... The tenure of most employees would not make it worthwhile.

I wish we had something like the SAG-AFTRA rate fees for programming. We don't so I guess my solo way of doing things will have to do for now.

https://www.sagaftra.org/contracts-industry-resources

Look at those rates!

Here is a good example of how you can max out a solo 401k and use a private pension plan.

https://www.watsoncpagroup.com/kb/Turbo-Charged-401k-Plans_3...

The dumbest thing in the world is working at FAANG at high salary levels. Unless your are in the C-suite you are always in a precarious position. It's not easy to justify the high salary at a competitor all the time.

The best strategy is to get good amount of revenue via a solo S-corp and minimize your payroll taxes. Hell your defined benefit plan can purchase all the FAANG stock it wants. You don't want to be the Sun employee with many stock options that are worthless in a downturn. At least you can dump your stocks and have some flexibility in your own defined benefit plan.

> The dumbest thing in the world is working at FAANG at high salary levels. Unless your are in the C-suite you are always in a precarious position. It's not easy to justify the high salary at a competitor all the time.

I don't think you know what you're talking about. An engineer making $200k+ at a FAANG can leave that company and.... probably make the same (or more) at another large tech company. Their salary is determined by basic supply & demand, if they have skills worth $200+ at one company, they'll find similar compensation elsewhere. (If it's not easy to justify their salary at a new company- why exactly is their current company paying them that much? Are they running a charity or something?)

I don't understand your obsession with payroll taxes. I'm self-employed too, everyone knows you avoid payroll or self-employment taxes by setting up an S Corp and paying yourself disbursements on top of a salary. Anyways, for an employee they're really not extremely high, so I don't understand building a whole strategy just to avoid this 6% tax. Being a FAANG employee comes with a ton of non-cash benefits & perks- the 401k match alone is probably double whatever you're losing in payroll taxes. The value of the health insurance is probably more than payroll taxes.... Sounds like you're not really properly accounting for any of this

It's not 6%. Im not talking about the employer's portion of social security taxes.

Go to http://www.esmartpaycheck.com/FreeCalculator/ Change cycle to annually (2019) and in column cp put in 250k.

the taxes I am talking about are: Federal Income Tax Withheld $61,363.50 State Income Tax Withheld (CA) $22,103.55

That's where you can make a substantial amount of savings by diverting that into a solo 401k and defined benefit plan. You need to pay taxes but you can knock that down quite a bit.

So from 250k down to 150k is your take home... imagine you can structure your business to save a substantial amount of that.

Health insurance ... ehh yea can be expensive but you can use an HSA and high deductible plan... That's why keeping obamacare laws are helpful. As long as you can get bumped off for pre-existing you are ok.

Screw the non cash benefits... Im sure many Sun and IBM employees enjoyed those same perks too. No FAANG company has a 25% match policy, they usually have 3% or some small matching percentage across the board for their 401k safe harbor provision... The same match for all employees.

People are catching on and making these calculations... Sure moving around FAANG companies might seem easy but just because company A pays you X doesn't mean company B will pay X+Z... It may seem like it in the hype but ask any former Sun employee making X why they can't find X+Z.

Options... that's where you might get real lucky. You got me there. That's something I am still learning about... But in your defined benefit plan you can just buy a basket of FAANG stocks.

Take a look at https://watsoncpagroup.com/kb/turbo-charged-401k-plans_302.h...

> Federal Income Tax Withheld $61,363.50 State Income Tax Withheld (CA) $22,103.55

I think there's some confusion around terminology- that's not payroll taxes (the 6%), that's regular income taxes. Anyways, you realize you do have to pay taxes eventually on your deferred income, right? I agree they will probably be lower rates, but you're not 'saving' yourself from these income taxes, just deferring for a few years....

Health insurance costs $6k+ for a not-great plan with a kinda high deductible (source- this is what I have). The type of HS offered by a FAANG is ultra-premium, literally everything is covered. There is so much financial value there man, especially if you have a medical emergency and actually use it- not to mention that they cover your family too. Minimum value is $10-20k and could be way, way, way higher depending on your usage or your family's usage in a given year.

Yes, FAANGs will match 401ks 10% or above (!). 3% would be poor in any industry or sector. Your information is incorrect.

Not interested in arguing with you about FAANG salaries, you're simply wrong. If you're worth $200-300k at one of them, you're extremely in-demand and worth that at a lot of companies.

I want to argue respectfully, but you have some awful weird financial ideas just based around tax avoidance (which is really just tax deferment). There is absolutely no way the tax benefits of contracting with a defined benefit plan even come close to the $ amount of the benefits from working at a FAANG, you're not even in the ballpark. More proof that taxes just make some people crazy and lead some to absolutely bizarre financial decisions (like people who commit tax fraud and go to real prison- the risk/reward there is completely out of whack)

My sanity and income both improved remarkably once I stopped trading hours for money. Now I trade results for money.

This gives me a lot of control over how I work. The client only cares about the result - X% increase in website traffic, X new leads, etc.

As long as I make that happen, it doesn't matter to the client whether I work 5 hours or 50.

I'm often done with my month's work in about 10-15 days and have enough downtime to focus on side projects.

How do you bring up the topic & structure rates? EG, if you get 80% of the way towards that 5% goal, What about 120%? etc.

How do you price based on results like this without a clear internal view of the company's numbers. Feels like it would be throwing darts somewhat.

After freelancing for a few years, I decided that it was not making me happier, since:

- It is not possible to create significant wealth by freelancing

- I work on things I do not care. I want to think/spend time on important things

- Chasing down payments is stressful

- Finding new clients requires some effort

Therefore, I decided that it would be much healthier for me to get a job that pays well and not work as a freelancer.

> It is not possible to create significant wealth by freelancing

You aren’t charging enough.

Have you considered going hourly with a staffing agency? A senior developer can charge a three figure hourly rate and if you aren't known in the industry an agency can place you at companies that can afford to keep you working full time. I've always gone above and beyond at my salaried jobs because I find the work gratifying, and I've been thrilled being able to charge for those extra hours. I doubled my yearly income when I started contracting. Providing your own benefits can be stressful and cost more when your employer isn't subsidizing it, but if you are making over $200k/year medical insurance is a relatively minor expense.

Right now, I'm thinking about applying to the largest companies of our industry in a few weeks, but can you please briefly share your experience on staffing agencies, because making $200k/year without an office sounds appealing.

I haven't worked at home since I started contracting (after a 10 year stretch of all remote work). In my experience most jobs that you get through a staffing agency are for big lumbering corporations that are completely out of touch with the industry and think that all employees are thieves and villains that must be supervised at all times. These companies are also the ones that have enormous budgets for contractors (for accounting reasons, I guess) and very little oversight (institutional inertia can keep you on a contract for much longer than it takes to finish a project, and projects take significantly longer than they should because of all the above factors). I've been fortunate that I'm mostly working on projects where I'm the sole front end developer and I get to dictate all of the technology decisions, and building something from the ground up is very gratifying, even if you have to work in a soul sucking office park in the middle of the suburbs.

> medical insurance is a relatively minor expense

Many more "expenses" than just health insurance. Retirement, health insurance, business insurance (e.g. E&O), federal/state/county taxes, accountants (you need one), lawyers (perhaps), etc...that $200K/year salary dwindles fast (assuming you can maintain that year after year).

Don't know if the equivalent exists where you live, but in France you can work with a contractor that does all the administrative work and just pays you a salary. You don't have to worry about accounting, tracking payments, business insurance, health insurance, retirement, etc. as you technically don't own a business, but you're still a freelancer, choosing who you work with, for how long, at which rate, etc. You have a salary without having a boss. I've used this system a few years ago, pretty cool.

If you charge a lot, you end up getting better clients, the kind that don't mind paying for a service that makes them a good return. Naturally, these smart people who know that good work comes at a price, are much better at paying invoices. You do great work and usually end up working with larger teams - where some members of the same team become a source of referrals.

Also, the perks of making good money as a "freelancer" is that you can pick who you work with and the types of projects you want to work on. Contrary to having to work on whatever comes along, you can enjoy your work.

This makes sense, if you got a job that you care about and like. If not, you're working 100% of your time on something you don't like.

At least with freelancing, there might be a chance that you might enjoy an odd project here and there ...

That's interesting. My experience has been the opposite on all four points.

- My total pay in the first year was about 30% higher than when salaried, and will probably be 50% higher this year.

- Most of my projects are way more interesting than when salaried.

- I've never had to chase down any payments. I've instead been chased down to invoice a couple of times!

- I have never put any effort into finding clients.

> My total pay in the first year was about 30% higher than when salaried

With or without benefits/bonuses/... factored in?

Not the person you asked, but... Yes. If you do things right and get a little lucky, you can make much more as a freelancer or consultant.

> If you do things right and get a little lucky, you can make much more as a freelancer or consultant.

In the short term, but is it reproducible for the long term? How does the 10, 20, 30 year outlook look like? From my vantage point, it seems that most freelancers have pretty short shelf life.

When started contracting (I never use the term freelancing cuz I don't work for free) I was making 4x what I made as a salaried employee. I've been contracting for 10 years now, and have averaged about 35 hours per week billable over that time. It has been very lucrative.

The problem for most folks is they just don't build the network to get gigs, especially long term ones. The freelancer that takes 2 week projects is going to flame out quickly because there's too much churn. My minimum contract length now is 3 months and that almost always turns into a 6-9 month gig in the end. And my network is large enough now that I never have to look for gigs. I turn down way more gigs than I take.

I realize I'm in the minority, but it is possible, especially if you carry yourself as a business and not just as a hired hand. When you do that, companies look at you differently, and your value to them increases.

I am at 5 years and still going strong.

Does anyone know what they'll be doing in 20 or 30 years?

I'm sure one _can_, I only meant to hint that '30% more' isn't obviously better. 30% more than base (and nothing more) would not be a good deal for a lot of people.

I have been a freelancer for 24 years, and had this problem. Here's how I solved it. I incorporated my business, and I am an employee. My corporation pays me a stable amount, so I'm not worried. When I put the business hat on, I make sure I project the yearly income and have a generous salary fund ( 6 months). No worries anymore, the most I have been without work has been 3months. If at the of the year I haven't spent my salary fund, i have extra money. Another truth one must acknowledge is that its not about how much you make , its how much you spend. When you have financial discipline the mind is free.

That sounds interesting. What are the tax implications of such a setup?

It's a common setup in Canada. I paid corporation tax once for money left over in the company account, but that is just cost of doing business for me. Once I have the 6 months of salaries, I just roll it over year over year with no more tax to pay. Salary is taxed as regular income.

The best way to freelance that I know of for stability, low stress, and freedom is to get a regular ~10 hour a week gig doing remote contract development. Change $100/hr+. No hustling really required after you find them since in my experience they want you to stay on for the long haul.

There are a lot of very small companies with less than 10 people in them quietly making good money that have a software system that doesn't need a full time developer. Or, because they can't afford a large team, are willing to hire a few developers part time to reduce the risk of one single person being the sole linchpin for the entire business.

I see a lot of people around here asking "How do I get more clients?" In the course of 8 years of freelancing, I've only had around 10 clients total because most of them have been in an arrangement like this, and they stay for a long time. I've often been the one to end the relationship for it not being a good fit for me, not them running out of money or firing me. They don't come very often, but when they do, they usually stick.

If I had to do the Upwork hustle, I'd have probably quit a long time ago. This seems to not be as true for other professions like design/copywriting/music/etc, but full time salaried development just pays too well to be a freelancer unless you want freedom. Otherwise it's just crappy employment with fewer benefits.

For a good number of years I lived in rural Indiana and worked 10 hours a week for one client at $90/hr and made plenty to live on for just myself. Now I'm working to earn more than that, but with this model it's often a matter of scaling up or down the number of clients you have.

Freelancing gives you the ability to work less than 40 hours a week, which gives you leverage over your time to create the life for yourself that you want. It's stupidly hard to start a SaaS app with a full time job, but freelancing can sustain you on 20 hours a week and then the rest of the time can be spend doing whatever you want (just work less, start a business without stress, travel, etc).

“If we’re already in the time-is-money mindset, we can reframe our leisure time as something that enables us to be more productive in the future,”

It’s a bummer that we’ve gotten to a point that in order to relax and enjoy time off we need to somehow frame it as “productive”. I think it speaks to something deeper.

This mindset is so hard to get away from. Still working on it myself as a freelancer of 8 years. I'm starting to think that happiness, work/life balance, and relaxation are all basically a mindset shift that has to be consciously taken.

As my friend recently said, "When I work, I'm typing text into a text box. When I play, I'm also typing text into a text box. What's the difference?"

Something like fear of living in poverty when you get too old to work as a programmer?

My approach so far is to:

(a) charge a high rate

(b) preferably charge for projects or

(d) leave some slack in the accounting, favouring the client

The thing is that the client is not really paying you for your time, they are paying you for the value you can deliver. Time is a very rough analog, but so far seems the best that we can do and actually agree to.

So the above leaves the time-based accounting in place, but de-emphasises it as much as possible.

I do roughly the same, and besides charging a high rate, I usually do only one project at the time for 2 - 6 months. With my clients I make a deal about my daily rate * number of days per week I will be working. I never charge more than that, except when I do a lot more work and then I communicate it in advance (or I foresee that the extra work is going over the amount of hours we agreed upon).

This is not applicable to every freelance job off course, but if you have the luxury of being able to charge a higher rate, you can make a decent living and enjoy your free time.

For years I was employed and worked 40-50 or more hours per week. I was devastating for my work/life balance, effectiveness at work and my happiness. Since I started freelancing a year and a half ago, I'm happier, work less and earn more. I spend more time with my kids and I am really (also mentally) present. I'm also in better shape (training for a marathon currently), and I'm more effective at work.

Would you guys mind speaking a little on your path from salary to freelance? I want to make the jump but it seems scary and I don't really have anyone to talk to about it? How are you guys finding work?

I found it scary. I quit my job and became a freelancer without having a paying client. That was not the best path, but my job was on a yearly schedule. It was the choice between doing another year or quitting. I quit (because of various reasons). The first two months I did not have income, no paying clients and just a vague plan of what I could offer clients. Not very comfortable.

Background: I'm a product manager, but also did front-end development, business development, performance marketing and coaching in the past. So, in theory I could do lots of things, but product management was the thing I wanted to do.

The scariest part of becoming a freelancer for me was getting clients. I had build up quite a network in the startups and tech companies in my city (Netherlands) and that helped in getting my first client. Actually, the deadline of me quitting my job also helped in really taking the step.

In terms of advice, I think it best to be determined to start as a freelancer and put serious effort in the transition between full-time job and freelancer. Some things that help: - have some savings to have a financial buffer when you don't have a paying client - be clear in what you will offer and be clear in your availability. You can then use this to talk to your network, for example: I will be doing front-end development (React and React Native) from March. - having your first paying client before you actually quit your job

If you doubt about who to talk to, you can first just talk to people you know (remember: be very specific in what you can offer as a freelancer). Sometimes you can get clients in unexpected ways, from people you don't expect. If you have the idea that you don't know enough people, try to come into contact with people that are doing the same as you and already have some experience freelancing. If talking to people and networking does not get you further, maybe there are agencies that can get you clients (for a fee). Good luck!

First step, don't call yourself a freelancer, cuz you don't work for free. The word has connotations of "temp". A freelancer is someone you bring in for a 3 week stint. A contractor or consultant is someone you bring in for a longer project. It doesn't matter that these are all basically the same person, but perception matters.

Always make the relationship a business to business one. Don't get stuck being the "hired hand". Just doing the job isn't enough, always provide more value, get involved in their biz if you can. Don't work from home, work on site, "out of sight out of mind" is a thing, and is the fastest way for a client to see you as expendable.

The best way to find work is to build a network. The best way to build a network is to get a gig with a bunch of other contractors at it. Then work hard, and be pleasant to work with. Once that gig dries up, and all those other contractors go out to find new gigs, if they liked you, they'll recommend you for openings at another client. Rinse and repeat.

I got very lucky in that my first contract was a 6 month contract on a team of 15 other contractors (at a F500 company). That 6 months turned into a year and when the money ran out, I had a network of 15 other people to lean on. Since then I've never had to look for a gig, they've all come to me.

It cuts both ways. As the author says, if you allow yourself to worry about every minute not working, you'll be mentally drained in no time.

On the flip side: Having my time tied to an hourly (actually daily) rate has saved me countless hours chasing things that weren't worth my time. Things like waiting in line for deals on electronics, or spending 5 mins driving around to find the cheapest gas or place to eat. 5 mins @ $100/hour is $8.33, far more than I'd save by spending time on it.

Even at $10/hour, the time I used to spend trying to save a buck was pretty wasteful.

The whole reason I got into freelancing was to take 3-6 months off a year. Lighten up people, you're gonna be dead soon and absolutely nobody is going to care about how many times you committed to github.

The problem described by the OP largely goes away when you stop charging by the hour.

Exactly. All you need to do is charge on 'per project basis'. But it's fare to say that not all freelancer can do this. There isn't really such thing as a 'freelancer'. A coder, a writer, a designer, a virtual assistant - these are entirely different lines of work.

It is better if you can charge on a 'per project basis' but only if you have spent time up front working on an accurate estimate and, more importantly, built in significant contingency into your price.

Often though this up front time working on an estimate can end up being for free, an opportunity cost really, if you don't win the project.

> Often though this up front time working on an estimate can end up being for free, an opportunity cost really, if you don't win the project.

Charge for a discovery phase. Your requirements gathering skills and planning for what to build have very significant value.

SO much this. Having gone from salaried employee to freelance consultant, and now to running a product-based business, I've come to the conclusion that being paid per hour is anathema to the quality of my working life.

I agree that it's better to get paid to finish a task than to spend time on a task. You have greater independence and, IMO, can provide greater value to the client. It does introduce new sources of stress, though: if you misestimate the scope or difficulty of the project, the financial burden can be sever and you have more responsibility for delivering on time. With experience, you do learn to both budget for unforeseen delays and make agreements beforehand that limit the scope of your responsibilities when, e.g., the client's spec evolves as the project goes forward.

I am a "freelancer". I have discovered that billing by the hour is the worst idea. It creates the inherent conflict. Clients start resenting how much time it took you, etc. Instead always bill per job, unless impossible to estimate. Determine value acceptable to you and the client. Agree on lump sum and let chip fall where they may. Sometimes client wins, sometimes you win, in the end it all events out. More importantly you build a base for the next job where everyone agrees to acceptable fixed fee parameters and you can correct the fee estimate. Hourly billing is really wrong in my opinion.

Fixed fee is great as long as the scope is limited.

Whenever I've hired companies to do stuff on a fixed fee basis, they typically lose due to unforseen circumstances.

One of my clients said the other day: "When working with a fixed fee there's always 1 party that 'loses'". I tend to agree, either it ends up more work than expected (freelancer loses), or (although in your experience that's less common) the freelancer learned from previous mistakes and overcharges.

In addition, the upfront cost of specifying the job is also lost. This is not always trivial to 0do upfront, as both the world, insights, etc change over time (hence many have moved away from the waterfall approach).

The biggest thing is that flat rate doesn’t do is anticipate risk. If through nobody’s ill intent a task takes 5x longer or 5x less, it’s all swallowed up by the flat rate.

That’s a feature for a productized service.

It also works for well-scoped tasks. I wouldn’t pay someone by the hour to cut the grass.

On assumes that there is always room for additional services. And unforeseen conditions.

When I was freelancing a bit over a decade ago I was making more than most people my age I knew at the time. My natural reaction was to try scale that, so I hired folks to do the work for and with me... that is when I learned first hand how difficult it is to scale a services-based business.

However, folks much smarter than me taught me another thing. True wealth is created when you reach a point where you are making money while you are sleeping - which is exactly the opposite of what I was stressing about ("I only make money when I am charging for my time"). Ironic.

"True wealth" has many meanings in life, not only finance. When you substitute all of life for finance, its a trap.

Of course if you see it in a macro sense you are right. My comment was within the context of this article:

My point was that [Time worked == money generation] is exactly the opposite way of looking at things.

This is something multiple clients of mine have told me.

They were straight up about letting me know, hiring me is great for them because they can make a crap ton of income once the product is completed.

That's the nature of things though. You make money the most money by owning things that make money.

For me it is exactly the opposit.

I started freelancing, because I wanted freedom over my time.

While I probably undercharged by a huge margin in the beginning, at least I only worked when, where and how much I wanted.

I still made 20% more than with my last employment job, so I didn't really notice.

You can't set a price tag on your time, it's way to valuable in the sense of you can't buy it back.

Spent your time wisely. You are going to die, and if you spent most of your prime time speculating in making more money, you never understood life.

I'm on salary, but I do feel similar pressure as well. Even though I'm being paid more than decently I'm still looking for additional gigs, but what is hardest on me is the feeling that I'm loosing time and a lot of money if I do not manage my side projects everyday and I do not grow constantly even though my main side thing is not designed to bring me any money I feel really bad when I'm slacking.

For those of us out there doing consulting work and charging hourly - I encourage you to check out the Jonathan Stark podcast "Ditching Hourly"[0] and also the "2 bobs"[1] podcast with Blair Ens and David C Baker.

Both talk extensively about pricing work on either "value" (best option) or a fall back to pricing "outputs" (what gets delivered) ..and they try to get you out of charging by the hour - worst case charge by "blocks of time" (ex 2 week block of time minimum).

To be clear - getting clients out of the mindset of charging by the hour is extremely difficult ..all the back of the envelope math client will do in their head results in an hourly value.

[0] https://www.ditchinghourly.com/

[1] https://2bobs.com/

As the economy moves away from traditional salaried jobs and toward contract gigs, more and more people are starting to feel like I did. Other studies found that billing by the hour — no matter how much people charged — compounded the tendency to view time and money as one and the same. Those who did so were less likely to take pleasure in leisure activities, because they were too preoccupied by the opportunity cost of their time. Again, these trends were similar across income levels.

Blah, blah, blah, the article continues. Look, freelancers have transparency. FTEs get paid that paycheck twice a month, or once in some places, but when they sign the offer letter, it never -- in the US and the UK -- really matters how many hours you work. In both places, you'll simply be expected to be suddenly put on an on-call rotation a few months after you start, you discover that the shoddy release happens Tuesday nights from 11p to 2a, despite asking three times in interviews, etc. In some places, you get 'PTO', which means if you get sick, you need to cancel your vacation which comes out of the same pool. In one place I worked, a retail brokerage with a vicious on call week, you had 15 days of PTO, which included sick time. Got the flu? Oops, no Caribbean vacation for you, sucker. We had to work weekends and holidays, due to releases and on call, with no comp time.

Even more importantly, my 40 hrs is transparent as a freelancer while your 45,50+ because you want that promotion or bonus isn't paid. But you're "passionate about technology", right? That's what you tell yourself.

That's not isolated. I have a long career of observing that, and my sucker friends who say, it's part of the job, this that and the other.

As a freelancer I make 30 pct to 50 pct more than FTE, I KNOW they want me there because they'd get rid of me if they didn't, and I'm hedged against 'oh we need you to be available, that should be obvious when you joined' entitlement.

I freelance if I can, do FT when I must.

> your 45,50+ because you want that promotion or bonus isn't paid.

Made me think of : "The new proletarian sells his labour power in order to consume. When he's not flogging himself to death to get promoted in the labour hierarchy, he's being persuaded to buy himself objects to distinguish himself in the social hierarchy."

http://library.nothingness.org/articles/SI/en/display/31

My working life changed recently after leaving my last role just before Christmas. I’ve done freelancing on and off for a few years and I just feel like the whole process of freelancing is fragmented and broken.

I’ve started digging into the issues others are facing too, and at the expense of getting berated for highjacking a thread, I’d be keen to hear what problems others have in this area? I put together a little survey here: https://adamfarah.typeform.com/to/abznqs

I did freelance work for about 2 years and I didn't feel at all like the author.

To me associating time with money was helpful, but I wasn't thinking on it 24/7. I know that when I feel tired, the most productive thing to do is have some leisure time or simply go to sleep.

To me having a price tag on my time was helpful deciding what was worth waiting for. Trivial things like waiting for a bus or taking taxi, cooking vs take out, etc.

I guess it mostly depends on your priorities and how much money you make. People living on the day or the week maybe don't have the luxury to relax

I have this same issue but instead of money I feel like I'm wasting time because I could be learning and improving my professional knowledge. I wonder if that's also unhealthy.

I've always said I could never be hourly (or freelance) because I'd never take a vacation; instead I'd just be thinking about how much money I was losing. Same would apply if I had a work arrangement where I (say) got 3 weeks of PTO but arranged for enough extra pay to cover a 4th week of vacation "unpaid".

I'm sure if I had enough in the bank, and was on a quasi-sabbatical or quasi-retirement, I could view extra freelance income as the "cherry on top", but in terms of money to pay the bills, it would be incredibly hard.

I appreciated the author's comments on paying for time saving things that make you happier (I HATE doing the laundry, but we cook almost every day), as well as the comment about dog walking.

I think this just means you have to find the joy in things you choose to do with your time. For example, I once mentioned that I feel I don't find enough time for hobbies, but a friend mentioned cooking dinner every night, working out, and a few other things that are part of my daily "routine" as things that I choose to do, things that are "productive", but in a way that we don't typically give ourselves credit for. In other words, recognize how you are spending your time, give yourself credit for the good things you do, don't take them for granted; not everyone does those things.

Attaching a dollar value to time is productive.

I do see the point though. I’m on a very inefficient board of a financially struggling non-profit. And I keep doing the math of “If we could meet for 1 hour instead of 3, the money saved by the board would pay for the deficit.” I squirm every time we spend thousands of dollars of time on fifty or a hundred dollar items. So the OP does have a point that’s there’s a downside in terms of frustration.

I sucessfully have been doing this for more than seven years: the trick is decent but fair pricing per time unit; also you have to budget and calculate a buffer realistically. Yes, you also need downtime and if you are stressing about that you are most likely billing too low or are simply too anxious/greedy (all things that can be fixed).

Enjoy the freedom, at last that's what you have optimized for.

I have the feeling as the author while I charged hourly rates. I see a tendency that more freelancers start getting money from a fixed price for a project. It helps to charge more and less work. Also, it is easier to get relaxed. You know when you should finish a project.

I shared here one research about the hourly rate of freelance developers [1]. They calculated that right now, it's about $68 of the US JavaScript freelancer. But I assume that American freelancers charge more. Perhaps, some freelancers charge fixed prices. That's why the rate is lower.

Thinking about time equals money really disturbs your life. You have to live for enjoying but not for getting money every minute.

As a lifehack, early I included my vacation/sick/holiday days to calculate my hourly rate. It helps me to have planned vacations and some days to sick without any thoughts about doing a job.

[1] https://periodix.net/blog/which-developers-earn-more-corpora...

I've been freelancing my entire life. I feel this pain.

I don't think there's much advantage in trying to sort out work vs. life time. The problem is that by stating it this way, it always makes it into some kind of conflict. In fact, if your job and your life are so dissimilar that the concepts can't coexist in your mind, you have an additional problem not related to billing.

What might work is a kind of reverse budget. Decide how many hours you are willing to bill every week/month/quarter and stick to it. You can (and should) spend your time however you think it will help you as a person, but by limiting the amount of time you're willing to put other people's interest first, you sort out a lot of ethical conflicts that otherwise you might fall into.

I know that's easier said than done, especially when you're starting out. I remember many years of billing like a banshee.

I missed my oldest kids growing up. I regret that strategy. Like so many things in life, some folks end up figuring it out by the time it doesn't matter anymore.

People who attach dollar signs to their time — or “value time like money” — tend to be overwhelmingly less happy than those who don’t, because their nonworking hours suddenly seem less important. “Free” time gets tainted with guilt because there’s a cost associated with it.

Could this be a result of people not attaching a high enough dollar amount to their time?

I tend to see consulting (described as "freelancing" in the article) as exchanging a little bit of work time for a lot of play time. It just plain pays so much compared to a salaried gig that you can buy yourself the better part of a year of downtime with just a few months' work.

So yes, the article is right that I did sometimes think of time in terms of money and vice versa. But usually in terms of "how many seconds would I need to work to afford this cheeseburger", rather than the article's anxiety about how much my vacation is costing me.

Downtime/vacation is the explicit goal of the exercise.

I value my freedom. Freelancing, which I've done off and on, is the best lifestyle I've experienced. I've never once felt bad about not working on my off-time. Rather, I've noticed that while freelancing, I'm able to have so much more quality personal time than I can have when I'm working a traditional job.

I'm a contractor, it's sometimes tempting to think this way for me too. Particularly when it comes to vacation days.

But then you have to remember you are charging more because you need to build this in. Maybe you can work those extra five days instead of taking a week's vacation, but then you're going to burn out sooner.

Indeed, as the article describes, it's not so much the stress of freelancing as the particular stress of billing by the hour.

While I/my shop nominally have billable hour rates, some time ago it evolved into projects that are estimated as the rate of billable hours plus materials, but billed on a per-project basis. The project is due for the agreed amount, whether I spend the planned number of hours, twice that, or half that.

This is decidedly less stressful for both me and the client.

I still have the stress of meeting the schedule deadlines, but I no longer feel that stress described in the article of 'wasting' minutes I'm not productive. If I take a break, it may feel that the schedule is slipping, but it doesn't feel like losing an irreplaceable opportunity cost to earn $x in that 0.2 hours.

I have been freelancing for more than 10 years and I don't share these feelings at all. I don't know how to explain the discrepancy. There was a period of about half a year when I voluntarily worked just two days a week, while my client was happy to have me full time. I do take vacations, at least a month every year. I never work on the weekends.

I think the most interesting part of the article is this:

"While time versus money anxiety may be more acute for freelancers, we aren’t the only ones who struggle with it."

It seems that the time anxiety is not something unique to freelancing but rather a symptom of a broader problem with our culture/economy/politics where business/market plays ever more central role in our lives.

This slightly ignores how hourly rates are advantageous to they buyer, and when you sell by outcome, you compete against all hourly people, who necessarily have similar ballpark skills and less negotiation ability.

Clients will often salami slice work to pay %10-20 on your quote. It is all about leverage (batna). Development work is different than say, security consulting or other design and analysis work, as it's all in the findings.

I recommend building a "Matthew Effect," where you have consistent demand independent of price or rate so that you can determine the value of a project objectively. It matters less that your rate is down than being vulnerable to a gap in demand. That gap returns you to wage slavery.

For most freelancers "consistent demand" is the hard part. I found it easier to price a service once you can estimate the type of value it will provide. For development work this is probably hard to do, but with experience and enough poking around you can learn the type of value your work provides. It helps if you can get down to the core details such as how much the product is currently earning, and how much your work will contribute. At that point it becomes much easier to sell yourself because when presented with a $ cost and a $$ profit, it becomes really clear that it practically doesn't matter what you charge because the returns are on-going whereas your work is one time. If I made a business $2 mil additional revenue, all of a sudden a 5% investment doesn't seem as hard to swallow. Coincidentally, charging a high rate leaves less of a gap, especially once you figure out your typical gaps and when they happen and budget appropriately.

I did freelance for about 4 months five years ago, and I felt that this mindset became really hard to avoid. I would end up waking up at around 7AM, start working at 7:15am, take a 15 minute break to make a sandwich for lunch, then work until 10pm.

Doing this long enough gets really depressing, and I found it difficult enough to "turn off" that I ended up working a 9am-6am regular job again.

I have to disagree with the premise of the article. Note: I've been freelancing / self-employed since 2010.

If anything, knowing that every minute can be transformed into cash has a profound positive psycological affect. You should question how to spend your time. Time is, after all, your most valuable resource. It shouldn't be anathema to be protective of it.

>If anything, knowing that every minute can be transformed into cash has a profound positive psycological affect.

It makes me think of it like a video game. I can choose when and how much I want to spend in fun stuff and how much on "grinding."

> It makes me think of it like a video game. I can choose when and how much I want to spend in fun stuff and how much on "grinding."

Exactly.

Done both.

Hated freelancing enough that it nearly made me hate programming (something I’ve loved for 31 years).

I’m happy as a high autonomy employee.

We thought of life having a serious purpose, and the thing was to get to that end, success or whatever it is, maybe heaven after you're dead. But we missed the point the whole way. It was a musical thing and you were supposed to sing or to dance while the music was being played. -Alan Watts

"People who attach dollar signs to their time — or “value time like money” — tend to be overwhelmingly less happy than those who don’t, because their nonworking hours suddenly seem less important. “Free” time gets tainted with guilt because there’s a cost associated with it."

Of course this comes from a psychology department, where people get accredited to start their own state-licensed soma dispensaries.

Is the purpose of life really to "be happy"?

When I have worked, and have charged for my time--regardless of the billing unit--I may not have been happy while doing the work, but have--far more often than not--been very proud of the result. Value was created for both the customer and myself, and the experience from each project is ammo in the clip toward the next win. And even when the result has been disappointing--still even more ammo in the clip.

Or, I could get my "happy" from Netflix and quartely trips to Disney World, then visit the psychiatrist to get my Zoloft prescription to deaden that inner-voice mocking me for wasting the hours that we only get so many of.

You're reading way more into that quote than what it actually says. "Happiness" in this context is not in-the-moment satisfaction of primal urges, it's about how you feel about your life in general, which includes what you describe as pride in your work.

Have you read the paper they linked to? How did it define "happiness"? How did it measure "happiness"? From the paper, "happiness" can be read very broadly.

I chose to read it the way that the average person I know would read it, and then I chose to reject that.

edit: And pride of workmanship is not the same thing as happiness. There have been a couple jobs where I've been rather unhappy about helping particular people out, while still being proud of how I did it.

Does anyone have recommendations for what I can read to get started freelancing? I had a very successful religious mission, so I know I have "sales" skills, and I'm a pretty good software engineer, but I feel like I spin my wheels when I look for freelance clients.

My business skills awakening was started when I discovered Kai Davis and Nick Disabato's podcast Make Money Online:

https://makemoneyonline.exposed/

Simultaneously hilarious and incredibly valuable information I had never before heard. The people in the Kai Davis sphere of influence are all pretty helpful for freelancers and consultants.

The ultimate constantly limited resource in life is time. So one should maximize most of the value out of it. Money is just one possible means toward that goal. Unfortunately, it is easy to get so attached to it, that the goal is easily forgotten...

It is your choice. You are in charge and freelancing gives you the opportunity to bill _less_ and leave space to other important things in your life for which a regular job would compete. Family time, sports, hobbies, learning new things, etc.

I have a different view. Add another column to your ledger labelled 'living a life'. Value every hour in that column above your rack rate for work. Now the whole equation changes; all the motivations change.

I highly recommend Jonathan Stark's Ditching Hourly podcast: https://www.ditchinghourly.com/

As a freelancer I find working-time the least stressful and the time between jobs the truly stressful part. Work is easy, not knowing when the work and money will come is what kills me.

My initial thought is that if you worry about losing money on a micro level you aren’t charging enough for your time. I actually feel like I can work about 50% time and be just fine.

Now consider the new "gig economy". Usually staffed with people who are in need of money more than software developers. Their guilt has got to be much worse.

Work to live, don't live to work.

That is, I believe, an accurate summary of the article.

Freelancer here. This does not ring true for me. I can see a causation between freelancing and vacation. Vacations "seem" more expensive as they are both a cost and a period of lost income.

But all those existential worries looks like an underlying issue with the person itself, more than freelancing in general. Freelancing may enhance it. But if you are more angry, less social and hence less happy, then no matter what job you are in - you should probably consider a change.

I almost always feel irritated when booking a vacation for this reason. So many days of lost income! But the funny thing at the same time is - I really need vacations and always feel better after them. Also the same thing if I need to do something during office hours (like a doctor appointment).

Yes, but it just underscores the point of how important it is to not lifestyle inflate. I am now coming to a point where I do not feel like I really need the money more than the vacation. Sure it is lost income, but will it really change my life as opposed to the time off - properly not :)

I tried freelancing for a while but it really didn't make economic sense.

there are so many other ways to make money that unless you absolutely enjoy getting reamed by scope creeps and coding, freelancing is definitely not it.

Given, there's not much an engineer can do.

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