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The Psychological Trap of Freelancing

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Re: The Psychological Trap of Freelancing

#151

Post by rburhum »

mistrial9 wrote: post #112
rburhum wrote: post #111

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…

"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.

Re: The Psychological Trap of Freelancing

#152

Post by icedchai »

nightski wrote: post #147
icedchai wrote: post #140

Earlier quoted context omitted.

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.

Re: The Psychological Trap of Freelancing

#153

Post by bonestamp2 »

porker wrote: post #107
photoguy112 wrote: post #28

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…

> 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. Wh…

What is your change request process?

Re: The Psychological Trap of Freelancing

#154

Post by bonestamp2 »

photoguy112 wrote: post #75
system2 wrote: post #74

Earlier quoted context omitted.

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?

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.

Re: The Psychological Trap of Freelancing

#155

Post by pwaai »

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.

Re: The Psychological Trap of Freelancing

#156

Post by mistersquid »

balabaster wrote: post #109
clojurestan wrote: post #102

Earlier quoted context omitted.

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 familie…

> 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.

Re: The Psychological Trap of Freelancing

#157

Post by twic »

hackathonguy wrote: post #39
UweSchmidt wrote: post #17

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 ho…

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, unles…

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?

Re: The Psychological Trap of Freelancing

#158

Post by momirlan »

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.

Re: The Psychological Trap of Freelancing

#159

Post by andyidsinga »

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/

Re: The Psychological Trap of Freelancing

#160

Post by ngngngng »

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.
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