[ayoubElk]

An alternative scalable way is to switch from a full time job to becoming a freelancer/consultant and set your own rates.

In order to be able to land high paying projects as a consultant, you would need to showcase your skills somehow (open source, portfolio, etc...). This can happen later on though and as a start the easiest way would be to ask for referrals and make it known to your network that you're looking for consulting opportunities.

Making this transition though would imply that you'll need to think about it as a business instead of a job, and start cultivating new skills i.e. communication, marketing, sales, etc...

[k__]

This.

Freelancing is a good option.

250k a year is 20k a month, for 12 months a year.

20k a month is 1k a day, for 20 work days a month.

How to make 1k a day? Write 2 technical articles.

Btw. as a freelancer you could end up paying less taxes, because more things are deductible. This could mean, you can end up with the same money after taxes without making 250k a year.

[Lordarminius]

> Write 2 technical articles.

How do you monetize technical articles at the rate of $1k / article ? Most firms wont pay that much.

[ghaff]

Freelance writing these days is not very lucrative. Personally I won't touch it for less than $1/word (so about $1K/article = ~ 1 day). Which, if you do the math and account for all the unpaid time needed to be in a position to write a $1K article still isn't a lot of money.

[ayewo]

The technical articles can serve as highly effective ads to lure your potential customers. The kind of technical writing that will leave no doubt in the minds of your readers that you demonstrate deep expertise in the technologies you are an expert in.

Here's an example https://burke.services/segment.html taken from https://burke.services/

[ghaff]

This is generally true of writing in tech whether articles or books. You can usually make more as a side effect (or as part of a salaried position) writing than you ever will with someone paying you directly.

[k__]

This.

If I write an article that shows how your SaaS integrates with <POPULAR_SERVICE_OR_FRAMEWORK> then this is worth much more than $500.

[k__]

$1k / 2 articles.

[username223]

> How to make 1k a day? Write 2 technical articles.

The going rate for a technical article written in ~4 hours is $500? That blows my mind. I'm not saying it doesn't happen -- I've only done non-technical articles -- but that it's hard for me to imagine it being profitable for the publication.

800-1000 words produced from scratch in 4 hours, including research, editing, and graphics, is going to be garbage one step above what you'd find in a content farm. The same derived with minor modifications from an existing article will be little better than scraped content.

[ghaff]

As someone who does a fair bit of writing, I'd say a 1,000 word article is more like 1-2 days depending on research (including perhaps attending an event/interviews), administrivia, editing, procrastination, etc.--and can certainly take more than that. Not that I'm generally working freelance, but I'd certainly expect around $1K as the bare minimum. Which, if you do the calculation, probably only translates to about $100K/year best case before expenses, etc.

And, yes, a lot of publications pay less than that which is why you see a lot of writers with technical knowledge working for product companies doing content marketing and related.

[k__]

Yes.

It's also a question of expectations.

I have many clients who publish anything I write without any questions.

[k__]

Clients often approach be because they've read my articles, which means they have a rough feeling about my skillset.

If they offer me to write an article about something I already know, I don't have to do much research.

Writing 1k words takes around 1h if the outline is good, so I have 2-3h hours time to do research about things I already know.

[menomatter]

A lot of companies now do consulting in W2. Is it still the same in terms of favorable taxes as c2c or 1099?

[indymike]

W2 means you are an employee, so no, the tax situation will be different.

[menomatter]

Technically true. But I do consulting and some agencies put me on w2 with no FT benefits at all. https://www.accountingtools.com/articles/what-is-a-w-2-contr...

[nickjj]

> Btw. as a freelancer you could end up paying less taxes, because more things are deductible.

But you're also paying a lot more in base taxes and lose out on a bunch of bottom line income. I've been a freelance worker for ~20 years and recently switched to a full time position to mix it up.

Your employer pays half of your social security taxes but as a contractor worker you need to pay both ends, that translates to about an extra 7% in taxes. On $235,000 income (let's say you wrote off a total of $15,000 in the year) that's an extra $16,450 in taxes.

Your employer usually matches 3-4% of your salary into a 401k which is yours without any vesting period. On a 250k salary that would be $7,500 at 3%.

Your employer usually pays your health insurance. The absolute bottom of the barrel worst insurance you can get will cost you around $450 / month if you're a contract worker or $5,400 a year. There were even years (2016-2017 I think) where if you didn't purchase your own insurance you ended up paying thousands of dollars in fines.

Your employer may contribute to a number of nice to haves like tax free stipends for internet / phone bills as a remote worker. Let's call that $1,500 a year for everything combined (some of which is direct money in your pocket and some are services you might have access to).

So in the end being self employed results in paying an extra $16,450 in taxes and you net lose $14,400. That's a total of about 30k less. You also have the extra burden of filing quarterly taxes or you pay fines. You'll likely end up having to pay for an accountant too which will be another $500+ / year (not included in the above totals).

Yes, as a freelancer you can deduct a portion of your home office as business rent, computer supplies and other things you need to do your job but for a remote worker there's really not as many deductions as you may think.

I'm not saying doing contract work or being self employed is bad but I think it's important to be aware of these extra costs and things to think about.

There are some tax perks of being self employed too, like being able to fund a SEP account. For most self employed folks you can put 20% of your income or up to 58k in 2021 into this account. It's somewhat comparable to a 401k in the sense that it's a tax deferred account, AKA any amount you put into there will be taken off your income taxes today and you will pay taxes when you start withdrawing the money at about 60 years old based on whatever your income is then.

So in our example above if you had 250k income, wrote off 15k and then maxed out your 20% into a SEP for another 47k you'd really pay income tax on 188k. Keep in mind as a salary worker you'd have 19.5k into a 401k so it's mainly a benefit of about 27.5k of extra income that you're tax deferring.

Note: I'm not an accountant and I might be calculating things incorrectly but it's in the ballpark of a few percent.

[mypalmike]

One way to reduce your tax load is to contract through your LLC, pay yourself a salary from that, and get taxed as an S Corp. It helps to hire an accountant who knows how to handle most of this for you.

[karmajunkie]

yeah i was coming here to suggest this. LLC with the S-corp election will save you ass-tons in taxes. the paperwork isn’t worth it until you get to around 100k in consulting income but from there on you can basically cut your SE taxes in half (although technically you don’t pay SE taxes with this setup, you’re paying yourself as w2 so their employer taxes)

[nickjj]

> yeah i was coming here to suggest this. LLC with the S-corp election will save you ass-tons in taxes

Where did you hear that? No accountant I've ever spoken with mentioned it's worth setting up an LLC to save money on taxes as a typical set up where you're a solo developer who runs their own tech business.

I mean, paying yourself less of a salary through an LLC is going to result in paying less income tax but it's not a system where suddenly you're paying way less in taxes AND you get to keep the remainder to do as you please right now as if it's some type of easy loop hole.

There's also regulations around single employee LLCs around all profits being taxed as income for the owner.

[karmajunkie]

i did it for years. You don’t pay employment taxes on dividends/distributions, just income taxes. so you’re still paying taxes on those but you’re saving 7.5% on the employment taxes side. maybe “ass-tons” is over selling it but coupled with business deductions you can take you can save quite a bit.

the IRS may take a closer look at you if you’re taking less than half your revenue in W2 income but otherwise it’s perfectly legitimate.

[edit: the S-corp election is key. look into that.]

[sersi]

This was the way I did it, I worked as a freelancer charging 1k a day based on me having both nice specific skills and language skills that are uncommon. eventually some of my clients approached me to work full time for them.

[tyingq]

Keeping in mind things like self-employment tax, health insurance, sick days, vacation, 401k matching, liability insurance, and so on.

That is, don't take your billable rate * 2080 hours/year and compare that as apples-to-apples.

[ghaff]

Furthermore, relatively few consultants have an endless stream of work that allows them to just work as much or as little as they want to each week. And, even if they do, some non-trivial percentage of even their working time is going to be non-billable hours related to administration, education, running errands, etc.