Contract is a instant no for me. I've done the math and haven't found them to be competitive long term after what the above commenter mentioned (and that's before all the headaches of actually getting paid). Most of my peers feel the same way.
The main problem with contracting is lack of career path and random, not very interesting projects where the contractor has little say.
The downside of employee life is non-technical meetings, personality trainings and yearly reviews. They make me feel like a kid.
I also miss the luxury of buying VAT-free tax-deducible gadgets.
Like what kind of gadgets ?
The critical thing is to get a pipeline of folks you know that send work your way. So rarely idle. That was done by working 15 years in the field in a variety of companies. I keep in contact with many old colleagues and remind them I've got bandwidth.
I never made more money than I do contracting now. I've never had to 'chase down money' - never had a bad check, never been stiffed. Had some late checks for sure. Probably due to the quality of my contacts.