> If the reason you want to move from a permanent salaried position to contract work is to make more money, don't. This may be correct in some cases, but it's

> If the reason you want to move from a permanent salaried position to contract work is to make more money, don't. This may be correct in some cases, but it's not universally true. 1. Yes, there are a lot of things contractors must do that salaried employees don't, but activities like developing and maintaining a portfolio and invoicing don't have to be a drag if you set up efficient systems and processes. 2. Pricing strategy is really important. If you're seeking an hourly rate of, say, $120 but only 50% of your time is billable, you might want to consider the possibility that you'd net more by reducing your hourly rate. In a lot of cases, contractors who struggle with billable hours don't realize that trying to maximize the rate they can get one or two clients to pay will often minimize billable hours. With the right rate, you can attract more clients more easily, allowing you to diversify if you so choose. You will also find that clients want to send you more work instead of getting you in and out as quickly as possible. 3. You don't need to have an "identity" to get business. Unless you're trying to be the top gun for hire who bills $200/hour with no resistance or limit your work to the most interesting or cutting edge projects, there are plenty of opportunities out there that don't require you to be "known." If you have a solid portfolio of work, are responsive and can communicate well, you can acquire clients without a Coca-Cola like branding process. 4. The reason self-employment is criticized from a tax perspective is that most people don't do three things: educate themselves, keep good records and hire a good accountant. As a self-employed contractor, your legitimate business expenses, including home office use, are deductible. Additionally, half of the amount you pay for self-employment tax is deductible as well. Throw in the ability to set up a solo 401(k) where you can contribute up to $17,500 of your earnings as an elective deferral plus 20% to 25% of the profit of your business as a employer profit sharing contribution, and being a contractor can actually be better for contractors at a certain point. 5. If you're constantly surprised by clients cutting your hours or ending the relationship without warning, you're not managing your client relationships well. Period. > The salaried employee agrees to work for less than the market rate, and in exchange the employer agrees to subsidize your down time. In other words, you don't have to worry about constantly finding the next thing to do just to get paid. You get to focus on the work. There are no guarantees when you're a contractor, and it isn't for everybody, but let's not pretend that salaried employment is a risk-free proposition either. At the end of the day, no employer is going subsidize down time in perpetuity. If there's nothing for you to do, or the value that you're creating doesn't exceed what you're being paid by a wide enough margin, there's no reason you should assume that your job is safe. If anything, this is the great lesson you learn from being a contractor: time is money. If you want to be paid for your time, and paid fairly, your time eventually has to be seen as having the capacity to create monetary value for the person or company you're serving.