Consider Contracting and Freelancing

by Kevin Mulligan

Your job isn’t permanent. Even if you are good at your job there is no guarantee that you won’t receive a pink slip. The economy is changing and many companies are slashing costs to remain in the black. Simply put, you have no guarantee that you will have a job tomorrow.

One of the first lessons in investing you learn is to diversify. Placing all of your investing eggs into one stock is a recipe for disaster. The same is true of your employment and income. You must protect yourself through diversification of income.

One potential step in that direction is through contracting.

Earn Side or Full-Time Income with Freelancing

The beauty of diversifying your income streams is you don’t have to jump in head first. I’m not telling you to quit your desk job to be a starving artist. You can pick up one project every six months just to get a taste of what it is like.

What I am encouraging you to do is this:

  • identify your true skills
  • identify opportunities to put those skills to profitable use
  • maximize your earning through negotiations

Your true skills might be something you do on a daily basis or it might be your favorite hobby. Freelancing and contracting are like any other job, and  doing something you enjoy will help make the project not seem so much like work. The result of doing something you enjoy is more satisfaction and better quality results because you’re doing something you enjoy.

Looking to perform freelance work or hire a freelancer? Read this oDesk review to see how you can find and hire freelancers to perform tasks for you, or how you can bid on jobs as a freelance worker. There are thousands of job opportunities available.

Pros and Cons of Freelancing and Contracting

If you are an unemployed worker or you are looking for another source of income, then I highly encourage you to take a contract or contract-to-hire position.

Pros of contracting:

  • You are unemployed — this is a job — as we’ve discussed in the past you should take almost anything that earns you income
  • You only get to keep a job if you are good
  • It can turn into a “permanent” job
  • Is a foot in the door
  • You can earn more money as a contractor or freelancer

Downside of contracting:

  • You only get to keep a job if you are good
  • You aren’t truly “a member of the team” and can sometimes been seen as the first to go (although sometimes smart employers cut perm employees first because of the cost of benefits)
  • Depending on the contract you may have to do your own taxes

Take at look at the list. I think the pros far outweigh the cons even if you are a “permanent” employee.

The real kicker with contracting is you must be good at that skill. Contracts are amazingly efficient at determining quality in a short period of time. If you are simply average at your job the client will not be willing to pay a higher rate for your services. And why should they when they could hire another average person for less?

The Only Way to Be Un-Fireable

I mentioned at the beginning of this article that even if you are good at your job you could still be pink slipped.

Want to be in a situation where you cannot be fired? There is one simple solution: be your own boss. This is the ultimate extension of contracting and freelancing. Take your skills to the point that you make the decisions — what clients to take on, when to go on vacation, and how much effort you must put in to meet the client deadline.

Again you don’t have to rush out to start two companies right this second. First evaluate your skills and the value the market sees in those skills. Then pick up a contract or two to get a taste for freelancing. Use those first few projects to build a great reputation and before you know it your income streams will be as diversified as your investments.

Published or updated February 26, 2014.
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1 Financial Samurai

These are good tips, and actually should be done while you are working so that just in case you stop, you’ve already got a head start.


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