Non traditional career path: the freelancer

Summary:

This post describes a non-traditional career path, the freelancer. It is focused on my experience in the UK and Europe, but it probably applies to the US and Australia too. This post is directed at young guys, or guys looking to change career, with a few years working experience or looking to plan their future.

 

Body:

There are 3 career paths you can take.

1) Become an employee and work your way to the top. There are great posts by /u/VasiliyZaitzev describing how to play the corporate game, go read them.

2) Become an entrepreneur, create a unique product / service and make lots of money. Can't advise you on that, but help yourself to other posts in this subreddit.

3) Become a freelancer - find a niche skill, and get highly paid for it.

 

• Why should you bother?

When I moved into freelancing from a regular corporate job, I went from earning £35,000 a year to almost £115,000, with only 3 years working experience. 5 years later, I'm earning £180,000 and I'm pretty sure I will be able to hit £250,000 before I retire. I work between 2 to 8 hours a day. I can take a 6 month holiday if I want, my income will drop but by less than half due to the way taxes are calculated. Yes, it's sweet, and I'm not amazing, lots of people do the same. It's like a badly kept secret.

 

• Tell me more.

Freelancing consists of taking short term contracts, from 3 months up to one or two years, to do a specific job, for a daily or hourly rate. This is the theory. In practice, depending on your niche, you can end up getting your contract "rolled over" for years on end - I've known people who have been on the same contract for over 10 years. Think about it - after 3 months in a company, you've barely gotten your feet wet and are now able to do basic navigation. Why would anyone only hire you for 3 months?

You will create your own company, and your clients will hire your company (which then employs you). This has many benefits - for example, in the UK the corporate tax rate is 20%, and the income tax rate is between 20 and 45%. So if you want to maximise your money, you will need to do your expenses smartly. For example, a new computer that costs £1200 will only effectively cost you around £576 if you put expense it through your company, as the rest of the money would be taxes if you took the money out and bought the computer yourself.

Why do companies hire freelancers? Over the years I've heard various reasons. It can be because your skill is so niche that most people will only take contract jobs as you get paid more than a permanent employee. Or like in the case of some banks, it can be because they like the flexibility of being able to fire you in a week (that's a clause in most contracts). Or they just have a project for which they are under resourced and need to hire additional people for that project only - and as we all know, every single corporate project ends up lasting 3 to 4 times what was planned in the beginning (perfect, more money for us).

As you are paid an hourly / daily rate, you NEVER do unpaid overtime (I've never done any overtime at all). Because that will cost them money. Instead, they give (and expect) the overtime to be done by lower paid permanent employees. Add to that the fact that you don't have to do any of that permie shit like performance reviews, unrelated work, attend office parties, and it's a win-win situation.

 

• What do you mean by niche skills?

My experience is in IT, but I know people who freelance in various areas, such as Engineering, Medical and even HR. In your area, think about what kind of specialist skills are in demand. For example, in the UK in IT right now you can easily get contracts for Python, Java EE and information security. Research this in your professional area. Bear in mind that you might need to move geographically, but the extra money will be worth it.

 

• What do employers expect of you?

Professionalism above everything. Keep away from office politics, show up on time, do your work professionally. You are a one man company now, not an employee. Do whatever it takes to make your customers happy, but do not be a pushover. You will be expected to be fully autonomous and manage your own time and tasks in a lot of contracts. This is perfect if you are a smart worker, it means you can easily finish your daily tasks in 2 to 4 hours a day, and have the rest of the time for yourself on the sly (stock trading, sharpening your skills, etc).

One of the tricks of the trade is to make yourself indispensable within a company. Find a niche in your niche. How can you tell you're doing a good job? The client will offer you a sweet permanent employee deal at some point. Think carefully before you take it. Do you really want to go back to the corporate ladder, no matter how sweet the deal looks? This is especially hard in the beginning, but after a few contracts you will have no problem saying no without a second thought.

 

• What do I need to get started?

Besides your specialist skill, you need to find a contract job. In the UK, use jobserve.com to find contracts. Make a professional LinkedIn profile, a great CV (use a CV advisory service) and contact lots of recruiters - some of them specialise in freelancing. It is essential to have a good network of recruiters and keep a good relationship with them. You will also need to start your own company and get an accountant (hit me up if you're in the UK, I can get a 10% discount on a good one).

 

• Why don't more people do this?

Fear. A lot of my former colleagues are dead afraid that they won't be able to function by themselves, that they will be fired after a week on the job, or that they will be out of work for months or years without finding a contract. What they forget is that if you specialise on something, someone will always hire you, if not as a freelancer, then as a permanent employee.

 

Benefits:

• Lower working hours than career paths 1 and 2

• Great pay

• Ability to take long holidays

 

Drawbacks:

• Can make you wealthy, but not rich like career paths 1 and 2

• You will climb up the corporate ladder more slowly

• Need to be constantly sharpening your skills and pay for your own training (take time off for this!)

 

This is a good career path that will give you flexibility and money, without sacrificing your life to your job. You will need to have a lot of charisma and good personal management skills in order to pull it off. You need to be fully autonomous, be able to work independently and develop a sixth sense of where the skills market is going and how you can keep up with it.