I don't think I'm really ready to give you the keys to life or anything. I'm happy with where I'm at, but it's certainly not perfect and it wouldn't work for everyone. I'll answer your questions, though.
> But how do you make money?
I do web development, mostly. I mostly ensure that I have work by undercharging for my services ($80/hour, which is pretty competitive for a Python developer with 10+ years of experience, 6ish of them in Python). I have low expenses because I live without some comforts (I live in a shared rental). I drive a 1996 Toyota Tacoma with 248K miles on it. I rock climb. It's not an extraordinary life, but it's mine and I like it.
> And how did you get started?
Parted ways on fairly good terms with my last salary job, without any real plan.
> I'd be concerned about losing health insurance or draining savings while losing the opportunity cost of employment.
Not to nitpick semantics, but you're currently paying the "opportunity costs" of employment. The opportunity costs of employment are what you lose by being employed, not the other way around.
Health insurance is literally my biggest expense, more than rent, and I'm a healthy 32 year old guy. The US is not a good place to be a human with a fallible body. What can I say, it's a risk. Plan for health insurance in your savings. Ultimately, not being in the US is probably the best idea--we're the only first world country with a third world healthcare system.
> How sure were you that your plan would work before you took the leap?
Not sure at all. It hasn't always "worked", either, I worked at a coffee shop and drove recycling to the dump for some local businesses, did landscaping, pet watching. I've never starved, never had to borrow money from friends or family. But I'm still not sure.
Your boss could lay you off tomorrow. Tomorrow's Friday, that's when they lay people off. There's certainly a risk in branching off on your own, but don't underestimate the risk of doing the same thing you've always done.
Probably you'll be okay no matter what choice you make, even if it's a mistake. It's just your finances. Your finances matter, but there are more important things.
EDIT: I'm passionate about the GPL, but can't really afford to be Richard Stallman about it. The reason I license my free software under the GPL is that I want it to push humanity forward, not get locked off in private codebases. But that's what I do on my free time, not what I do for work. I'd love to get paid to write GPL code and maybe some day I will, but most of the code I write is closed source for companies. Maybe that makes me a hypocrite--I like to think it makes me pragmatic.
> This thread is making me realize how much the US health care system really is impacting my life choices.
Have you considered going to London/Toronto/Vancouver? There's lots of business potential in all three places, healthcare included in taxes (though not immediately--I'm not an expert but I know from friends there's definitely a waiting period in Canada and probably in the UK). You could work a salary job for a year or two to build up contacts and then branch out on your own.
The weather is simply too cold for me in those places. I need more sun, even NY is a bit rough for me. But if healthcare is a big concern it might work for you. I know people who have worked in and loved all three.
> From where I'm sitting it seems pretty extraordinary :)
Haha, well, thanks. I guess what I'm trying to say is, there isn't a script you have to follow. The typical 9-5 American dream sounds like it's a bad script for you, but what I've done might not be any better. Try stuff out, don't live in fear of mistakes, find out what works for you.
I don't know if I have a real strategy here. I just give my rate early in the process and don't make it sound like it's negotiable. Some people don't call me back, and I suspect my rate is why. I do offer a lower rate to nonprofits. I've gotten one client through Craigslist (oddly) but despite ads on a bunch of websites, the rest of my work has come through referrals.
I suspect the biggest thing is just being in a good location. I live 90 minutes from NYC and can get there easily. The majority of my clients are in NYC and I think it would be hard to get the same rate in any but a few other cities (SF, Seattle maybe?).
There are some intangibles here. I interview well. I have code samples that I think are good--I don't have a lot to compare them to, but maybe they stand out compared to other devs. I do one stack (Python/Django/React) which is in high demand. I've been told I'm easy to work with and my clients have always been willing to give me recommendations (the recommendations are confidential, but I imagine they're positive because I keep getting work based on them). My experience is with some big name (top 50) companies. There are a lot of things in my situation that might be different from yours.
In general "finding high value clients" sounds a lot like advertising, and I don't really believe in advertising. I think advertising is a distraction from providing value, and believe that if I provide value to my clients the results will speak for themselves.
I wonder: how do you know you can only make $50/hour? If you just started telling people your rate was $80 from the get-go what would shake out?
how long did it take before you got enough work through referrals? and how much does your location matter to find clients? i am unable to find any local clients but i also can't easily move to anywhere else because i have a family with school-age kids which you don't move on a whim. people keep recommending upwork and similar places, but the quality of the offers there is not good either, and i end up competing with cheap labor. all the advice i find online is about how to get better leads, but not about how to get leads in the first place.
> how long did it take before you got enough work through referrals?
First referral was 3 months in. Work before that was from a friend of a friend, and someone I met in my coworking space.
People don't generally go through the effort of finding new freelance developers unless they have at least a month of work for them to do, so I'm not constantly scrambling to look for work.
> and how much does your location matter to find clients?
I think I could find clients almost anywhere, but I think they wouldn't pay as much elsewhere. NYC has a high concentration of high-revenue companies.
That said, I've only really worked from NYC and near NYC, so I don't really have any basis for comparison.
> i am unable to find any local clients but i also can't easily move to anywhere else because i have a family with school-age kids which you don't move on a whim. people keep recommending upwork and similar places, but the quality of the offers there is not good either, and i end up competing with cheap labor. all the advice i find online is about how to get better leads, but not about how to get leads in the first place.
My experience is limited here because my life situation is very different, but here are some ideas.
1. I don't live in NYC, I live 90 minutes outside it. This means I can travel, but in practice I don't do it frequently. So if you could travel a few times a year, you might get a lot of the benefits of living in NYC or SF without actually living there.
2. Upwork didn't even let me create a profile. Maybe think about people who you've worked with in the past (at previous employers or who left your company) and see if they or their companies are looking for any freelance work?
3. Obviously your risk tolerance is a lot lower than mine due to your family, so you might try doing stuff part-time. First step would be to make sure you have proper boundaries with your current job so you're not working overtime (which I'd say you should do regardless of any of my other advice anyway). And then look for small contracts, which can build a freelance portfolio and potentially get you more work.
nr 1. is a good point. i am actually doing that, and most of my current leads come from that.
nr 2. is something i heard frequently, but always leaves me at a loss. i just don't have enough past contacts to get anything out of that. it requires me to keep in touch with friends and colleagues remotely, which is something i find very hard to do.
for nr 3. i'd take a part-time remote job in a heartbeat, if i could find one. all jobs i have seen so far are full-time and not a good fit.
i forgot to mention, pretty much all work i got in the past few years was referrals. there just weren't enough of them. which means my referral network is not strong enough and i see no way to make it larger other than getting work elsewhere.
I've given this some thought, as I'm trying to figure out what to do with myself. I think I'm going to try this after my current startup sells or fails.
What I think I would do is reach out to anyone I know and let them know that I'm open for business and looking for clients. All of my employment jobs have worked that way, so I think it's probably a good first step for consulting too.
After that, I'd probably contact companies with job listings and offer to help them as needed with an hourly rate. They can always keep my number in their contact list in case they get into a bad spot and have trouble finding devs later. I know there's good job boards on SO, AngelList, and the monthly HN thread. I've been at plenty of companies where we wish we had an extra dev to get us out of a bind or pick up some extra work without committing to a full time hire, so I assume most small companies would be happy to be introduced to me, in case I'm needed later.
Then there's upwork, toptal, and a few others. Those sites really sketch me out because it seems like a race to the bottom, and it seems like it'd be harder to build relationships with clients when you're one of thousands that they picked from for this particular task. After all, they can just dump you and get another from the same web interface. Maybe I'm wrong about this and should give them a try.
This thread has really made me do some hard thinking about what I want in life, and I think I could put in another year or two and become semi-retired, take some time off, and then try to do a little consulting work and see how it goes. I've been paralyzed by fear to try, because I'm not sure if I'd be able to go back to employment if I fail. But after reading all these replies, that seems like a level of risk I should be willing to accept.
I also secretly hope (though I have no idea if it's true) that if I had a few months off work, I'd start building something so interesting than YC would want me. I don't actually know if I'm capable of that, because I've never had the time to experiment and find out, but that seems like a worthwhile attempt just to know what my actual capabilities are when unconstrained by work.
Also, I know this thread is getting old now, but I'd just like to say (in case anyone checks back) that I appreciate the replies here so much. I've never had so many people understand how I feel before. And reading all of the different life experiences that people have shared makes me realize that there is hope for me to do something else, and that I might not be trapped here until I'm dead, which is how it seemed before I started talking about this.
> But how do you make money?
I do web development, mostly. I mostly ensure that I have work by undercharging for my services ($80/hour, which is pretty competitive for a Python developer with 10+ years of experience, 6ish of them in Python). I have low expenses because I live without some comforts (I live in a shared rental). I drive a 1996 Toyota Tacoma with 248K miles on it. I rock climb. It's not an extraordinary life, but it's mine and I like it.
> And how did you get started?
Parted ways on fairly good terms with my last salary job, without any real plan.
> I'd be concerned about losing health insurance or draining savings while losing the opportunity cost of employment.
Not to nitpick semantics, but you're currently paying the "opportunity costs" of employment. The opportunity costs of employment are what you lose by being employed, not the other way around.
Health insurance is literally my biggest expense, more than rent, and I'm a healthy 32 year old guy. The US is not a good place to be a human with a fallible body. What can I say, it's a risk. Plan for health insurance in your savings. Ultimately, not being in the US is probably the best idea--we're the only first world country with a third world healthcare system.
> How sure were you that your plan would work before you took the leap?
Not sure at all. It hasn't always "worked", either, I worked at a coffee shop and drove recycling to the dump for some local businesses, did landscaping, pet watching. I've never starved, never had to borrow money from friends or family. But I'm still not sure.
Your boss could lay you off tomorrow. Tomorrow's Friday, that's when they lay people off. There's certainly a risk in branching off on your own, but don't underestimate the risk of doing the same thing you've always done.
Probably you'll be okay no matter what choice you make, even if it's a mistake. It's just your finances. Your finances matter, but there are more important things.
EDIT: I'm passionate about the GPL, but can't really afford to be Richard Stallman about it. The reason I license my free software under the GPL is that I want it to push humanity forward, not get locked off in private codebases. But that's what I do on my free time, not what I do for work. I'd love to get paid to write GPL code and maybe some day I will, but most of the code I write is closed source for companies. Maybe that makes me a hypocrite--I like to think it makes me pragmatic.