Your Work Life
How to be Your Own Boss
Myths and facts about freelancing
Working freelance is the default setting for more and more of us these days. Say you’ve lost your job and long lines are forming for any open position you might want. Becoming a consultant sounds like a good way to bring in some bucks until conditions improve–or it’s the chance of a lifetime to press “go” on a long-held dream to be your own boss.
I left a perfectly good job as editor-in-chief of a national magazine five years ago to enjoy the freedom of freelancing (I only call myself a consultant when I’m charging the big bucks). Here are the things I lost: big, black limos to ferry me around; a corporate jet to whisk me to my company’s home office in the Midwest; a substantial salary bolstered by stock grants and options and a 401(k); an assistant; a health plan.
Here’s what I gained: a free-form life in which I can knock off at 2 on a sunny afternoon and put 50 miles on my bike, knowing I can make up the work at 2 a.m. if I want to; time to volunteer at our local food co-op and a nature museum; richer relationships because now that I no longer commute more than 3 hours a day, I have more hours to spend with my friends; and, best of all, a sense of confidence that yes, I can indeed steer my own ship.
You may have noticed that what I have given up is largely money; what I have gained is largely time. In fact, I call my new career as a freelance writer one-third the money, three times the fun.
Here are some of things I’ve discovered about freelancing-the-myth versus freelancing-the-reality.
Myth: Your whole life is tax deductible!
Reality: Yes, your deductions will probably rise, but it’s definitely not a free-for-all. You can deduct things like office space and equipment and the business use of your car, but can I deduct a pricey kitchen renovation because I might write about food someday? Not likely. The key here is to become a tax expert, or, if you’re like me, you’ll hire a good accountant.
Myth: It’s worse than a day job. You’ll constantly be at your clients’ beck and call.
Reality: Actually, you have more freedom and autonomy than a salaried worker does because you have many employers, not just one. If any of them gets seriously out of line, making outrageous demands on your time, you can fire them without endangering your whole income.
Also, with today’s technology, nobody knows where you are. You can be sitting on the beach, landline forwarded, BlackBerry in hand, and everybody thinks you’re in the office.
Myth: You won’t be able to save for retirement.
Reality: If your company used to contribute matching funds, as a freelancer, you’re out of luck on that. But you can make contributions to your own retirement plan, like a Keogh or a SEP-IRA.
Myth: You’ll never get health insurance you can afford.
Reality: Roll up your sleeves and do some research, and you’ll find reasonable coverage out there. I get mine through a growing organization called Freelancers Union, which buys insurance at group rates for its tens of thousands of members. Professional associations often offer similar options.
Myth: You will be your own secretary and you will hate it.
Reality: Unless you run a bigger operation than my sole proprietorship, yes, you will be handling your own administrative tasks. But with today’s technology, they’re not a burden. I e-mail everything from contracts to manuscripts to invoices. I schedule travel, meetings and interviews the same way. It’s only a headache at tax time, and even when I was salaried, I had to assemble all my info every year. At least now I keep my accounts in good order, so it isn’t a mad scramble to decipher a bag of receipts come spring.
Bottom Line: Even if freelancing is a stop-gap measure for you–something to do while you interview for your next big gig–try to relax and have some fun with it. You’ll be networking like crazy to get assignments, meeting interesting people, learning to make your own decisions about how to spend your time (I can take the afternoon off to watch my daughter’s soccer game, then make up the time when she’s in bed).
Best of all, you’ll have a new confidence in your skills and your worth, and you answer (mostly) to yourself when you are your own boss. And remember, employees of large companies don’t call themselves wage-slaves for nothing.