Thursday, September 8, 2011

Living Off Freelancing (Part 1 of 2)


I filed my resignation from my last regular job almost two years ago. I got a 6-month consultancy account for another agency. Even without getting another project for 2010, I knew that I could live off that money for one year.

I remember the relief I felt when I signed that contract. ‘I am free!’

I was done with waking up at 8 a.m. every morning. I was done staying on my desk even if all I had planned was to increase my Spider Solitaire winning percentage to 80%. I was through enduring meaningless yet obligatory office events, from Christmas parties, to general assemblies, to ISO audits.

I can spend my time working on projects that matter to me. I can spend a long weekend at the beach and it is okay. I can be there while my daughter is growing up.

No more arguing with supervisors who would not accept my ideas.

I was free!

Based on some of the reactions of the people who found out that I am working freelance, it was common that they envied the control I had over my time. Maybe that is also the same with you. So I thought I would share some of the nitty-gritty details of the freelancer’s life.

Some Realities

Freelancing can be a very frustrating life.

It would differ per industry, but I spend a lot of time writing proposals and meeting with potential clients. From my experience, this phase takes a lot of time. Some of the projects I got this January came from meetings and discussions I had with clients as early as September last year.

Since a consultant/individual contractor is not a regular item in a company’s operations, my payments tend to get delayed. Several projects paid me a month after my deliverable was submitted and accepted. And worse, when a company is in a crunch, my item is also the first to get cut. Probable project termination is also a part of the deal.

Another truth is (or maybe this is just for me), I have to be prepared to face a lot of rejections or failed negotiations. There was a deal where a client and I already agreed on the starting date but we could not agree on the rate.  It was most probably because I botched the negotiations. Argh.

And there lies another source of frustration in freelancing. Every fault or misstep is solely attributable to me. There are no narrow-minded bosses, no inflexible administrations, and no incompetent officemates. It is just me. I learned to shrug it off. But I would not deny that I spent days blaming myself for being so stupid.

Aside from the actual operations of a freelancing career, there are also external factors that add difficulty to this track.

I did not expect it, but I actually felt lonely in my first year of freelancing. Yes, I work wearing pajamas and I could go shopping when malls are empty. But I missed having officemates to share a long lunch with. I adore playing with my daughter, but it could drive me crazy not having a conversation with someone who can put together three straight sentences of more than three words each for 8 hours. There are not many freelancers in my circle of friends, so there are not many I could drag to go swimming at Ace Water Spa on Monday morning.

Another problem is it is hard to determine if I am making progress or not. When I was in an organization, I could predict where I should be at a certain time. I knew how long it would take me and what skills I needed if I wanted to be a Director. I can peg myself against my peers – Am I doing well or not? Am I meeting my targets or not? It is harder to do that when freelance.

The operational difficulties I mentioned are factored in our family’s financial plans. I really understand it when other friends are hesitant to make the shift to freelancing because of their fear of irregular income.  If I did not prepare well, things like contract delays, payment delays, and project termination could have led us straight to credit card debt.

To be continued in Part 2--freelancing money tips!

About me: I am a friend of Investor Juan and one of the early readers of his blog. I have contributed here previously. I finally started my own blog, but it is not about personal finance. I write about the topics involving my work namely, government, technology, and society. I think IJ can do a better job than I do in discussing finance, so the best I could do is to contribute here when I am writing something about money. I hope you found this useful.

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