Freelance or not to freelance that is the topic.

Hi guys.

I am in a situation in which I really feel a freelance route might be best. I am currently working for a intermediate company, making a very good salary, but also doing freelance work for my old company making a lot of money also.

The company I am working for are equally happy to pay for my services as a freelancer. Not only do I have this income, but also other personal contracts.

I think the only concern is loosing the employment stabability I guess having not taken that leap.

Has anyone here done it. Or is a freelancer? What would the perks be and perhaps the disadvantages, I would really appreciate some advice or direction, as its forever playing on my mind.

I guess its having the balls to go for it.

Please let me know your thoughts.

Trev

i currently work for a company, but also do freelance work. i like to know that no matter what, i have a steady paycheck coming in. i also like the benefits and what not. i just consider the freelance work extra play income.

I currently freelance and work for a company and go to school and take care of my wife and kids. It's hard work, but something I enjoy doing. The disadvantages of freelance are obvious (IMO). It's not always a steady paycheck, no insurance or any other benefits, no time off with pay. The advantages: work from home, you charge your own price, you get extra experience and can add that work to your "portfolio", and you can work for multiple different people. My suggestion is to do both if you can keep up with it.

Thanks for your replies guys, all good.

Yes its a tough one.... I have so much portfolio work, but because its all done in the companies I work for, its a bummer when wanting to show it all off due to copyright and all that.

It is crazy but I am actually in some cases making more money freelancing, but then again it does have its ups and downs.

Will give it some thought

T

I'm in a position now where I am still working (technically speaking) for my "employer" pulling in a weekly paycheck but am freelancing to supplement my income. I do have the benefit of working @ home and doing stuff on the side while being readily available for tech support. I've been wanting to jump head-first into just freelancing but am finding that the opportunities out there are "in office" which, unfortunately due to my location, are out of the question... So, it obviously has its benefits if you're in a position and location to be able to do so... But it also has it's drawbacks if you have to travel a long distance.. Just my feedback!

Hi Trevor,

I have been consulting for almost 19 years now... during that time I have worked as an FTE for a couple of start-ups, as well as one of the world's top national laboratories. Here are my $0.02, FWIW:

PROs:
* IF you live in the states, or your country supports this sort of thing, you can incorporate (an LLC works very nicely for this) and sub-contract to your clients. This means they will pay you the FULL amount of your hourly rate (no taxes taken out) and you will get a Form 1099 at the end of the year.

What's cool about this is let's say your rate is $100/hr. and you work a typical 40-hour week. You will make, in your pocket, $4000 a week. If you were an FTE on W2, you would fall into approximately a 67% tax bracket, which means your weekly take-home pay would be around $2700.

Now, at the end of the year, you will have to pay self-employment tax, plus all of the tax you would owe, which seems scary, as a full year of $100/hr work is $200K, and your tax debt would be somewhere around $75K.

HOWEVER... as a corporation you can write off just about ANYTHING you do (you know that $15000 trip your took to Fiji? That was a board meeting, which is mandatory for a corp., and fully tax deductible!). There are two things that are great about this: 1) all of your expenditures are from pre-tax dollars, and 2) you get to keep ALL of your money until the very end. Think about the $1300 difference above between the 1099 and the W2 employee. If you are W2, the government gets to take that $1300 and do what they want with it (let's say that is January). In the 1099 scenario, YOU keep it and do what you want with it until the end of the tax year, and by that time you can easily show business operating expenses enough to offset that to nearly $0.

* You are your own boss, which is good and bad, because you get to set the rules, work hours etc. But you also have to go dredge up the work. So, if you are even CONTEMPLATING working as a consultant, start NOW, BEFORE YOU LEAVE YOUR CURRENT JOB, and make relationships with technical recruiters! They will supply you with the vast majority of your work, and if you get 3-5 of them in your pocket, you can literally go from job to job with very little downtime in between.

CONs:
* In relation to the 1099 issue above, you do expose yourself for a potentially huge tax debt at the end of the year, so be sure you understand what you are doing and HIRE A TOP-NOTCH ACCOUNTANT WHO IS WELL VERSED IN THIS SORT OF BUSINESS.

* Downtime can be killer. I will reveal more about myself than I probably should here, but hopefully it will help you out. If you are American, you probably have the disposition to make your monthly needs rise with your rising income. When I was at the top of my game in the mid- to late-90s (I was considered one of the top 3 OO architect consultants in the country), I was making around $400K a year. 1099. Which meant every two-weeks we were depositing around $17K in the bank. Seems like a lot of money, right? Well our monthly nut went from $3000 to about $25000 during that period (bigger house, cars, etc), and, to make a long story even longer... we went through a $212,000 bankruptcy 2 years after a major dryspell, when the .COM industry crashed.

Point is, BE CAREFUL WITH YOUR NEWFOUND POWERS! To quote a wise man (Stan Lee), "With great power comes great responsibility".

* As a 1099 employee, you will have to provide your own "benefits". You cover your health insurance, etc. And vacations never get paid. With the headhunters you can work as a W2 and get benefits and such, but oftentimes, you cannot work for more than one at a time...


These are some of the possibilities and pitfalls of the consulting world. Hope that is helpful!

Chris

Thanks for sharing Chris! A Very Good write-up and well versed. BTW, the procedure wasn't too bad at all and recommended. I will be back in the saddle within a few days ( a weeks time )

Thanks, Matt. I appreciate the kind words.

Glad to hear about your op, and that it wasn't too bad. How's that ice feeling????

I iced all of the weekend, so the it wasn't too bad. I even iced last night and loaded up with Ibuprofen (1000 mg) Ice really isn't as bad as you think. The first moment can be a shock but after that, it is A-OK. I just asked my wife not to tease or tempt me... LOL

Good deal.

Was she ok with that?? I have to ask my TO tease and tempt me... j/k