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The Psychological Trap of Freelancing

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Re: The Psychological Trap of Freelancing

#131

Post by nightski »

clojurestan wrote: post #102
balabaster wrote: post #98

Earlier quoted context omitted.

The biggest problem for me was my (ex)spouse always pushing for billable hours. Every time I decided I wanted time off there was a constant nagging reminder and guilt of not only what it would cost to go and do what I want - for example cost of flights, accommodation, entertainment and food, but also the cost of the loss of income for that time off meaning that every time I was away from my keyboard it was costing me…

Sounds like a shitty spouse

Meh, the guy admitted he was careless with money. It's possible his spouse is not as comfortable with living paycheck to paycheck as long as things are fine (because there could be times where it's not fine). We don't know anything about their financial situation, what kind of emergency fund he has built up, or if there is any sort of planning going on for retirement.

Communicating frequently and financially planning together is a key part of a relationship. If this is lacking that does not make the spouse shitty.

Re: The Psychological Trap of Freelancing

#132

Post by photoguy112 »

gk1 wrote: post #113
porker wrote: post #107

Earlier quoted context omitted.

> 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…

Have you tried doing a monthly retainer rate? You come up with the SOW and say: "This will take X months provided there are no surprises or delays, at a rate of $Y per month." > My clients want fixed price so the risk is stacked on me... The risk should be spread evenly. If you're bearing all the risk then it's not a good relationship.

The reason I did weekly vs monthly pricing is simply because it breaks down to a "smaller" amount, visually ;) But yeah.. in essence you are just asking for a monthly retainer. Also, with weekly you don't need to worry about collecting as much in case of nonpayment, at most you'll lose a week's worth of pay.

Re: The Psychological Trap of Freelancing

#133

Post by balabaster »

a-saleh wrote: post #119
balabaster wrote: post #98

Earlier quoted context omitted.

The biggest problem for me was my (ex)spouse always pushing for billable hours. Every time I decided I wanted time off there was a constant nagging reminder and guilt of not only what it would cost to go and do what I want - for example cost of flights, accommodation, entertainment and food, but also the cost of the loss of income for that time off meaning that every time I was away from my keyboard it was costing me…

If I were in that position, and wouldn't want to break off the relationship, I would probably try to change billable-hours to billable days (or even weeks?) I would then try to keep strict 8-hour a day work-schedule (ok, maybe even just 6 to be honest :-) Like, I am programming in professional fashion for around 10 years, and there are hours, where I make more progress than previous days. I don't want to be fighting…

I've been programming since I was 8 years old. Professionally for the last 25 years. I've seen entire classes and subsets of programming paradigms dominate the industry and fade to irrelevance. There's enough to keep up with, without stressing about billing. I try to carry billable days or even work on retainer such that a minimum income is guaranteed and anything over and above is billed at a daily rate.

From everything others have said, the jump from "programmer" to "consultant" is the hardest leap and one I've had considerable difficulty hurdling. My existing clients are often actively working against me to make this leap because they look at me as someone who can solve their problems in minutes and want them fixed now. It's on me to help change their mindset to one of allowing me to teach them to solve these problems for themselves.

My greatest value is in teaching them to be self sufficient. It's helping them to become more than the sum of their parts so that when they call me, they're calling me to show them what they're doing wrong and show them how to fix it, I'm not fixing it for them.

Re: The Psychological Trap of Freelancing

#134

Post by balabaster »

nightski wrote: post #131
clojurestan wrote: post #102

Earlier quoted context omitted.

Sounds like a shitty spouse

Meh, the guy admitted he was careless with money. It's possible his spouse is not as comfortable with living paycheck to paycheck as long as things are fine (because there could be times where it's not fine). We don't know anything about their financial situation, what kind of emergency fund he has built up, or if there is any sort of planning going on for retirement. Communicating frequently and financially planning…

Exactly

Re: The Psychological Trap of Freelancing

#135

Post by jameslk »

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…

The way I've seen a large and successful agency handle fixed bid projects was to write very detailed waterfall requirements and attach a price to that. Any scope creep meant new work with new requirements and a new price tag. The key was to break the project into smaller phases and price each phase. The detailed requirements are a contract between the two parties. They have dedicated product managers help the client determine what they want and come up with requirements.

You might also just have the wrong clients. I've found moving upmarket reduces stinginess.

It may also be you just have trouble saying no to your clients and need to work on setting boundaries with them. You may not need them as much as you think.

Re: The Psychological Trap of Freelancing

#136

Post by nightski »

newroman wrote: post #128
nickdandakis wrote: post #116

Earlier quoted context omitted.

I think the vast majority of people would find it incredibly difficult to save ~7.5k per month for 10 years (assuming an annually compound savings interest of 2.2%), to hit 1M. That type of savings goes beyond "no Ferraris/Great-Gatsby-parties".

you done goofed if you're saving at 2.2%, he means investing in the S&P500 or the likes

While it's true the market has given guaranteed returns well north of 2.2% average for 30 years or more (the single worst 30 year period would of been higher than 2.2% average). However, when you cut that down to a decade it changes the picture significantly. There are decades where you could of actually seen a loss.

So without giving financial advice, I'd say it's more complicated than throwing it in an index fund if your time-frame is a decade.

Re: The Psychological Trap of Freelancing

#137

Post by icedchai »

nickdandakis wrote: post #116
HenryBemis wrote: post #104

Earlier quoted context omitted.

If one lives a modest life (no Ferraris/Great-Gatsby-parties), on a sensible financial management, one can have north of £/€/$1m on the side, in one decade(speaking for UK/EU/USA)(for contracts on IT/IT Sec/GRC/PM.

I think the vast majority of people would find it incredibly difficult to save ~7.5k per month for 10 years (assuming an annually compound savings interest of 2.2%), to hit 1M. That type of savings goes beyond "no Ferraris/Great-Gatsby-parties".

10 may be a stretch for many. 15 to 20 years should be achievable by many tech workers.

Once you hit your number, work gets pretty depressing. You realize you're making more from passive investing, just doing nothing.

Re: The Psychological Trap of Freelancing

#138

Post by thisisweirdok »

HenryBemis wrote: post #104
ams6110 wrote: post #80

Earlier quoted context omitted.

Do you include your self-employment tax, health insurance, and saving for retirement in those three hours as well? Or is that just making up what was in your take-home pay?

If one lives a modest life (no Ferraris/Great-Gatsby-parties), on a sensible financial management, one can have north of £/€/$1m on the side, in one decade(speaking for UK/EU/USA)(for contracts on IT/IT Sec/GRC/PM.

If you don't need to pay for health insurance out of pocket or have a family, sure. This is possible.

Re: The Psychological Trap of Freelancing

#139

Post by maire »

josefresco wrote: post #41

"I went outside to get coffee and ran into three different neighbors who wanted to chit-chat. I wanted to scream, ‘For every word that comes out of your mouth, I’m losing money!" This is a statement from someone who either hasn't been freelancing that long, or who hasn't realized that "brain down time" is just as important as raw coding hours. I've worked "for myself" for almost 20 years and for the first 5 I too pan…

I had the opposite experience from the author of the article. It must have been because I valued my family time over my working time.

When my son was in high school I went from full time employee to part time contractor. It was great. Since there was a clear contract I didn't have to worry about office politics or my off-work time. I focused on working hard while working and I focused on my family when not working. I took every summer off-work.

Re: The Psychological Trap of Freelancing

#140

Post by icedchai »

nightski wrote: post #136
newroman wrote: post #128

Earlier quoted context omitted.

you done goofed if you're saving at 2.2%, he means investing in the S&P500 or the likes

While it's true the market has given guaranteed returns well north of 2.2% average for 30 years or more (the single worst 30 year period would of been higher than 2.2% average). However, when you cut that down to a decade it changes the picture significantly. There are decades where you could of actually seen a loss. So without giving financial advice, I'd say it's more complicated than throwing it in an index fund i…

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.
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