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As a contractor, if you're taking in 800 dollars a day, and buying your own health insurance, you are not taking in 800 dollars a day. In fact, your take home pay is probably less than his (at least on the high-end of the per-diem).

1. You're paying a higher marginal tax rate on your earnings than he is on his salary. Self-employment tax is a real bitch.

2. If you're buying your own health insurance, the benefits you get for the price are undoubtable lower than the benefits he gets with his (paid for) package, or you're paying through the nose. "Group plans" are generally better, and cheaper, than individual plans.

3. Should something terrible happen to you, or should you fail to find work for awhile, you are not eligible for unemployment.

I see lots of folks swear by "being a contractor" when they're young, only to start searching for a salaried position after a few bad experiences.

When I took over my company, the absolute first thing I did was switch every "contractor" to a full-time employee. It's better for both parties.

I've been contracting for a long time, I know the risks and it's not just about the money. It's about the self ownership.

Of course it's better for the company, they want the ability to coerce the employee and hold their livelihood/healthcare hostage.

With my arrangement, I keep the same healthcare plan no matter who I'm working for or what I'm doing.

Huh?

You can basically always keep your health insurance. You just have to pay a higher premium than your employer paid for it. They aren't "holding your health care hostage", they're given you a benefit of being a part of a group; a risk pool insurance companies are willing to give discounted rates to. Get fired, or quit? Just call the insurance company and ask what it'd cost to keep your coverage as is. There's generally ALWAYS an individual plan available with the exact same benefit levels.

Health insurance used to be a hostage game due primarily to pre-existing conditions. That's becoming less of an issue thanks to new laws (and if you were employable, was never much of an issue anyway).

However, I did not mean "just" insurance. Contractor arrangements are terrible for both the contractor and the company, in the long run.

I didn't mean just insurance either.

Independence and the ability to come and go as I please is more valuable to me than whatever risk/reward calculation you're working with in your head.

Eh. Personally, I was a contractor for a long time, and I realized that the whole "independent" thing was total BS.

1. I was never independent. I had a "client", or a "contractor", I was obligated to fulfill. I only got paid if I did so, and I only got more contract jobs if I did a good job.

2. When one contract was over, I had to run out and find another one. While doing so, I was making exactly nothing. If I timed things right, I'd go from one contract to another, but that's not always possible, so I'd have a week or so of dead time where I should have been making money, but didn't.

3. If I was sick, there wasn't a team of structure in place to deal with it. I was sick. I didn't get paid. It sucked. Often it meant I had to do double-shift days to make up the lost time.

4. There was absolutely no "reward". There was just a steady, sometimes unsteady, stream of money, which worked out to about what I'd make salaried somewhere after I factor in everything.

5. As a salaried employee, I was still completely free to quit. No one could "make" me stay at a job I hated. And there aren't many (if any) legal ramifications of doing so. However, as a contractor, I might have a legal obligation (literally a contract), and the client had a completely valid way to sue me if I broke contract by not completing the work. Some clients demanded real contracts for long-term projects, and that absolutely sucked.

6. Founder spend payroll? Great. Contract abruptly ended. Scramble to find more work, no idea when I'll get paid for the money they already owe.

Being a contractor doesn't make you free or independent in any way that a salaried employee isn't.

The only way it works out is if you turn yourself into a business, and hire other people. That's basically what I did, and even now, I'm not really independent. I have employees/clients counting on me.

The only real "independence" comes from wealth that isn't generated or dependent on labor.

I prefer working with clients to having a boss. I prefer having customers to having a client. You're always answerable to someone or something, even if it's begging daddy to refill that trust fund.

I add 2 months of runway for each week I work. Not exactly a big deal.

>Often it meant I had to do double-shift days to make up the lost time.

I'm starting to develop a picture of you under-billing, if you felt obligated to do so.

>There was absolutely no "reward"

Can we just get to the part where we recognize we value different things and move on?

>As a salaried employee, I was still completely free to quit.

Except for the part where if you're the type of person to prefer working on 5, 10, or 15 different things a year as opposed to one thing for 5 years, you're penalized as an employee because you'll be seen as a job hopper. It does real palpable damage to your career as a salaried employee to quit a job.

>Being a contractor doesn't make you free or independent in any way that a salaried employee isn't.

That's plainly false.

This was always a waste of time, but now it's an expensive waste of time.

Troll somebody else who hasn't drunk your kool-aid.

I'm not trolling. I'm literally talking about my experiences as a contractor and the conclusions I've reached.

> I prefer working with clients to having a boss. I prefer having customers to having a client.

To me, it was just trading one noun for another.

> I'm starting to develop a picture of you under-billing, if you felt obligated to do so.

Projects have deadlines. This isn't a matter of under-billing, it's the fact of life.

> Except for the part where if you're the type of person to prefer working on 5, 10, or 15 different things a year as opposed to one thing for 5 years, you're penalized as an employee because you'll be seen as a job hopper.

Not really. Go work for an agency that does lots of different things. I own a digital agency, and we build lots and lots of different things every week. My creatives/engineers can jump on stuff they're interested in (we actually encourage that).

If you feel like you're more "free" as a contractor, great. Personally, I found I thought that until I realized it was nonsense.

can you really 'come and go as you please' if you are a contractor, or even if you are working on your own thing?

I do.

how long have you been contracting/how many clients have you had? imo, working for client is way, way worse (in terms of how rewarding and interesting the work is, and work flexibility) than working for a company. but hey, if you enjoy it...

There are plenty of things that are worse about working with a client but I find they bother me less than other people.

There are things that are better too.

Asserting your independence and keeping a distance is a good place to start there. Don't be another employee.

Stoicism helps.

> That's becoming less of an issue thanks to new laws

Not until 1 Jan 2014, unfortunately.

I've been contracting for a long time

You know, I had a similar career path and was also contracting at 24 with several years of experience under my belt. I get what you say because I've worked freelance most of my life, and do care bout self-ownership. On the other hand, my view of what constitutes 'a long time' has shifted substantially since I was your age (I'm 42 now). In this market, I don't think you need to worry about being held hostage; maybe it's a proxy for something else that's bugging you that you haven't identified yet.

> I've been contracting for a long time

Didn't you just say you are 24?

Ha!

I'd call 4 out of 6 years working self-employed a long time for a 24 year old.

Your snark isn't appreciated.

A long time for a 24 year old, yes.

How long did you contract for before you quit and decided it was somehow easier to found your own company?

On and off for the better part of a decade.

And let me be clear, "founding my own company" wasn't "easier". It was infinitely harder, though ultimately more rewarding for me.

I'm contracting specifically so that I can allocate time flexibly in order to found my own company.

You're essentially scorning me for taking my own path towards what you did.

Baffling hypocrisy.

I'm not scorning you, whatsoever. I was just discussing why I came to the conclusion that being a contractor makes one no more or less "free" than being salaried, in practical terms anyway.

When you try to take the high moral ground while doing the same thing you're deriding, it severely undermines your point.

4 years is not a long time in any career. 4 years might be a long time to hold your breath or take a shower. But so far as working goes 4 years is a pittance. It may seem long since youre 24 and thats fine I suppose. I'm 27, so not much older than you, and I'm really not trying to condescend. Try to think with some perspective. Also, try to be less sensitive.

Another way of looking at it is that he's trading ~$500 per day for less risk. You're in a position to soak risk, and he isn't. It doesn't make either of you irrational.

That's a fair statement, but I'm trying to fight a different sort of risk than going without a paycheck.

Care to elaborate?

I value independence and eventual ramen profitability far, far higher than the average person. A life spent working for other people instead of customers or fans is a huge risk and I'm running from it.

Just FYI, insurance premiums can skyrocket one you get older or develop serious health issues (and such health issues really can come suddenly -- autoimmune diseases, etc).

I think you've built a wonderful position for yourself, but I'd urge you to be mindful of thepotential pitfalls in the future.

A lot of the health insurance risk is changing in 2014, though, so it's actually viable to have lower coverage insurance now and plan to upgrade IFF a major medical condition happens. (yes, this makes no sense from an insurance market perspective for the insurers)

I presume this is one of the provisions in the Obama administration health care act (something along the lines of accepting people with previous known medical conditions, iirc).

I'm not too knowledgeable on the exact scenarios and how much more (if any) such people with serious medical issues would pay, but I agree with you that this is something to be cognizant of.

You sure? Since 2014 is when no one can get denied and everyone has to have healthcare, I think there's some uncertainty in the market. If the system gets too many expensive cases, and not enough payees, premiums could skyrocket.

cool story bro'

I know the point you're making, but let me make clearer the point I'm making:

He thinks he's doing himself a favor and getting what he's "worth", but that doesn't seem to be the case.

Ah, agreed - congrats on getting out of the rat race and properly compensated yourself