[jaredklewis]

While there is obviously some risk, in my experience it is very well compensated. If anything, I think an irrational level risk aversion means there are basically not enough good freelancers to go around and the demand/pay is high.

The standard formula I recommend to a new freelancer is (what-you-would-make-as-salary / 50 / 5 / 8 * 2) = hourly rate. Anything less is undercharging. So if you would make 100k in salary, you can’t charge less than $100/hour. This is an absolute floor.

If you follow that formula, you’ll be able to cover the healthcare, tax accountant, gaps between work, and other expenses and still make your base salary.

But the ceiling is much higher. For a company, hiring a full time employee is just too much risk. You have a few hours of interviews to determine if they will be a good match, and if you are wrong, it is an extremely expensive mistake. Likewise if things slow down, you’ll have no flexible capacity. Freelancers are a dream come true.

Also, in my experience, companies do not think of freelancer rates in the same way as salaries. Freelancers are not on the organizational chart as it were. Whereas standard HR hires and the attached salaries come with a load of political and ego driven baggage, freelancers are thought about more like buying a new office printer. If there is a need and the budget, the company will hire you and you might be making 3x what the project lead makes.

[TheAdamAndChe]

If you're able to get a salary of 100k, then you're that top 5% or 10% that I mentioned _might_ be able to do well in a hot market. There are lots of people who aren't so lucky and don't have that opportunity.

[jaredklewis]

Sure, I gave 100k as an example. But I think the same principle applies more generally. It is perfectly possible to run a freelance business charging $50/hour, just expect that your total annual take-home (after health, sales work, accountants, and so on) to be in the $50k range. As for being in a hot market, well this is hacker news and programming is a very hot market right now.

I think a lot of people have a mistaken impression that freelancing is hard to pull off. In my experience, landing a contracting gig at a big hourly rate takes roughly the same amount of effort as it takes to interview and land a full time job. If you can land a full time job, you can probably freelance.

[halfimmortal]

My 2 cents to everyone here: nowhere in the discussion did I hear of setting hourly rate based on the value you're bringing to the company. It's all about how much the other company was paying you and how much more you're worth now. It's good to be ambitious, but as a freelancing consultant - think about the value you're bringing for the client. Set your rates based on that. You bring X value, company gets 10X benefit.

[jcadam]

$100k isn't a particularly high salary for a software engineer in the US these days. Even in lower COL areas.

[TheAdamAndChe]

If you honestly believe this, then you are living a very privileged life. Be happy about that, because it is very lucky.

Those salaries _can_ be found in other areas of the country, but they are almost completely concentrated to tech hubs of the country. Lots of cities throughout the country don't have these jobs.

[jcadam]

I don't live in a tech hub. The only place I've lived that was close was Northern Virginia (for only two years) and I hated it so much I moved to Florida.

I graduated from a fairly average state university with a BSCS in 2002 and joined the Army. My first software engineering job (which was hard to land given I had gone 4 years since college doing something completely different) paid $55k in 2006. I crossed the $100k threshold in 2012.

Though, I'll admit the raises haven't been as generous the last few years, and I did have to move a few times for jobs :)

But I really don't think my life has been particularly privileged or out of the ordinary for a reasonably competent developer (and many here on HN who do live in tech hubs make quite a bit more than I).