Contracting Is For Suckers | There’s A Better Way To Freelance

Brian Hood (0:00)

This is the 6 Figure Creative Podcast, episode 316

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Recently, I had a conversation with somebody who was a contractor for Dropbox, meaning that they were getting paid from Dropbox every month to fulfill on services that Dropbox needed. And they were getting $20,000 a month, which is a lot for anybody, right? Any solo freelancer, entrepreneur, anyone making 20 grand a month is doing all right. So I thought when I first heard that, I was like, awesome, keep that going as long as you can.

And the more I thought about it, actually, the more I realized this actually sucks.

And other people that I've talked to who are contractors, it's actually awful. If you're not sure what a contractor is, it's basically you are providing services to a client for a temporary basis rather than full time. Again, I'll get into more distinctions in a second, but this dude that I talked to is a lot like other freelancers I talk to that are what I consider suckered into contracting. Some might be a few months at a time. Some might be indefinite, like this Dropbox one, where there was no set end date for the contract. And if you're wondering why is this suck? Why would I say somebody who's making 20 grand a month is a Dropbox contractor, a sucker? I wouldn't say him specifically, but contractors in general are getting suckered into becoming a contractor for clients.

And it sucks because you essentially have no benefits, no pay time off, no stability, no real guarantee that you're going to have your job tomorrow. You still have a boss. You don't have a client in this case, you have a boss.

Whereas freelancing, real freelancing should be your terms.

It should be your processes, your systems that you're working through. You should have clients, not bosses, at least not a boss in the traditional sense. But this is not really what happens when you're a contractor, especially for bigger companies like Dropbox. At best, you're getting paid well, but then you're finding a new job every few months, which if you try to think through like the job search process or the contractor search process, doing that every few months when every contract ends, how much that's going to kill momentum, take away focus from either what you're doing or what you're working on. Every few months, trying to find a new job, essentially. That's at best. And then at worst is you have no idea when the contract's going to end. You build your life thinking you're safe.

It lulls you into this sense of security, thinking you're going to get that 20K a month every month. And this guy that I'm talking about, he lived in a very expensive area, had a wife, they had a house.

And so what happens when all of a sudden, that next month, Dropbox decides to just cut off that contract? I don't know if anyone, myself included, as a freelancer who had turned down a $20,000 contract every month, that's idiotic to do that. However, when you build your life around this, that has a lot of negative things that can come with it, especially when that contract dries up and you don't have prospects for projects, clients, the next contract lined up. So this sort of like high paying $20,000 a month contract is the extreme outlier. It is not the norm, it is the exception. But some other people I talked to, there's a guy that was working at a post-production studio in the video space and did that full time for several years, left that and was on a contractor basis, getting paid the same exact hourly pay he's getting at his old job, except he had no benefits.

They didn't have to pay payroll taxes. They were saving so much money, turning him into a contractor.

And that to me is the real sucker's game. When you're getting paid the same, you have no benefits, no stability, no legal protection as a contractor versus an employee. You are on the hook for all taxes. That's another big thing.

So in this episode, I want to dive into a better model for freelancers. Especially those that are pulled by the song of the siren into potential peril. If I could just do that as a few months of income, I'll figure out the freelancing thing later.

So I want to talk through a model that's more stable, more reliable, and should definitely make you sleep better at night.