If you work a salary job and don't feel up to it for at the moment, you can coast for half a day and get your shit together. On your own, that's a half a day of lost money. My brain needs breaks, and I just can't do code 40 hours a week and not burn out. I've tried. It just hasn't worked. So that downtime is a requirement, and you lose money for it.
The best part is that a decent programmer can make a moderate income working relatively little. Or you can make a lot of money if you work very hard. It's your choice at any given moment. But don't underestimate the drain of having to work for one to three people at a time, managing your time, and making sure the pipeline doesn't run dry all at the same time. It's pretty annoying/stressful when two important clients have deadlines on the same day. It's not like you can just pull in more help. Or if you can, you then have two problems - you have to go out and find the help, manage it, etc.
I don't think I could bill more than 25 hours a week and keep my sanity. But I'm not exactly a workaholic, and 25 hours a week is a pretty good living.
Milage may vary.
Also: I found it extremely difficult to date or maintain a relationship while consulting.
A full-time job offers some protection from volatility. I'm not going to pretend that nobody has ever been laid off from a full-time job, but if you work contracts you have ZERO job security. And contractors are the first thing to go in cost cutting mode.
If you go the independent contractor route, make sure your emergency fund can cover 18-24 months of expenses. Also, recognize that while the pay may be higher, if you're in the US you also are on the hook for 8% payroll tax that your employer would normally pay on your behalf.
If you go this route, you need to adjust your definition of "well off". If you are looking to keep pace with your friends working at Google and making $150k, that's pretty unlikely. But you can probably pull $60k and still meet your savings goals, and $60k/yr is more than enough to live comfortably on. And that number won't be static; some years you might make $100k and some years you might make $20k. You need your savings to be able to survive the lean years.
All that said, based on your comment I assume you have no work experience. Why would you hire yourself for a short-term contract over someone else? Go work somewhere full-time for at least a few years until you have a good answer for that question. You almost certainly have a whole lot of tradecraft to learn as well. Once you've built up some experience (and some contacts) you can think about contracting.
You are on the hook for more than just that. Federal, state and often county taxes (gross receipts, business licenses) will need to be paid. Plus you will need to acquire health insurance, fund your retirement, pay for needed business expenses, etc. Not to mention, most contracts you sign, will require that you also carry some form of business insurance (errors and omissions for example). All these things will slice and dice your hourly rate down severely.
The problem is it's easy to get worse than that add a 1h each way commute and 10 hour days, and skip vacations that's half your waking life. ~(60 * 50)/(16 * 365) And of course you need a few hours a day just for prep time and meals etc so quickly you only get free time to relax on the weekends.
This is just my opinion and I can only speak from a US perspective, but yes and no. The ones who are able to do this have already gotten a 10+ year head start and have built up a deep network from which to source work from. The ones who are starting out today are more than likely having a very tough go at it. Competition for contracts is much more intense compared to 10, 15 years ago and you really need to bring more to the table than just "javascript developer" or "wordpress consultant".
I know there exists this love-affair on HN with running off to become independent contractor, live on a beach writing code and making your own hours. I'm not saying it's impossible, but the reality though is that in the end you are building a business (even if it's just you). All the energy, time, risk and money that it takes to run a regular businesses will be just the same with running your own consultancy. The downtime you think you will have to yourself in-between contracts will be eaten up by having to find the next contract. If you happen to unfortunately live in or near a city with a high cost of living, the pressure will be even more intense.
The thing you have to understand about contracting (and really any paid work, I've noticed the same effect as a big-company employee) is that people will pay a large premium for a track record of delivering working solutions. When you first start out, your asset is "I know this programming language", your clients just want someone who knows that programming language, and you're competing with all of these people on oDesk and eLance who also know that programming language. After you've delivered successfully on your first couple projects, your asset is "I delivered on these projects and it made my clients $X", your clients want someone with a track record of delivering on projects with minimal handholding, and you're competing only with other people who have had wins of similar magnitude. The supply of these is much lower and the demand is much higher, and so you can charge much higher rates.
I would avoid oDesk type rates at all costs. You're better off going to small business networking groups and making simple brochure sites and wordpress installs for $1000-$2000 a pop.
When we reach a threshold of income and financial stability, some of us forget to evaluate why we're working.
As it turns out, I haven't reached this threshold yet so have to carry on working, but it is probably a good idea to look around and ask "why am I working?" if there's no real need for fulltime work.
I would do it once you have a steady foundation and some savings to fall back on should these contracts not materialise for a while.
Working fulltime is alright (it means you can be stable for a while) but not all of us are paid huge sums :-(
That leaves the contracting route. The issue there is you now end up a salesman. The people I know who are good contractors are businessmen first, software engineers second. They know how to close deals, attract clients,and have excellent "soft skills." They are mediocre developers. Not because they couldn't be excellent developers or were excellent developers before becoming contractors, but simply because their work day is no longer centred around engineering. This is fine if what you want is to run a business and be a businessman. Not so much if you're trying to escape the trappings of business to find more time to devote to focusing on just developing.
This is all anecdotal of course, I'm sure there are contractors who see a wide range of experiences that differ from mine.