Ramit Sethi weighs freelancing versus staying employed. His advice: keep your full-time job while you build a side business, save 12 months of expenses, and land 3 to 10 paying clients before you leave.
I have a question here from Jackie in Atlanta, Georgia. Pretty interesting one. She asks, financially, is it wiser to work for yourself as a freelancer or contractor or to work for a company that offers healthcare benefits, 401k, etc. I'm at a crossroads and the thought of leaving my company both thrills and terrifies me. I love this question because I have thousands and thousands of students who I've taught how to earn more money on the side. Many of them have actually taken their skills, quit their full time jobs and have gone full time on the stuff that they now love. Well, let me talk to you about the issues because you can actually make more money working for yourself sometimes, but there's a trade off in security and there's a lot of things to consider. So here's how I think about it. If you work for yourself, you often have the potential financially to make far more than you could ever make working at a full time job. Right? You can also hire other people, you can scale things out, etc. As you learn more and more, you can do that. Many of my students have raised their rates and from low numbers like $10 an hour, to high numbers, $50 an hour. And many of them have also gone from decent numbers like $25 an hour to over $100 an hour. So potential for growth is massive. On the other hand, if you don't luck out and you don't get things right, sometimes some months you may have no clients. So you want to be really careful about that. Working for a company you have more security, but there's a basic limit to how much you can make. Okay. And those numbers are very, very gradual. With some of the freelancers that have done my course and all my stuff, they, they've gone from like 25 to $125 an hour in like three months. Okay. Not typical, but it happens. Here's what I like to do, actually. I like to encourage you to stay at your full time job and do two things in the meantime. So you're continuing to just exceed expectations at your job. One, you're putting away as much money as you can in a savings account. I would try to give yourself at least 12 months of emergency funds because you know if you start off and you don't get a couple clients, maybe dry, you want to have some money to get yourself through that hump. The second thing is I like to encourage people to actually start something on the side. That's why my course is called earn 1k on the side. I found that in my research, people believe that if they want to earn money, they have to quit their job and start the next Google nonsense. They can actually start something on the side, five to ten hours a week. My goal is that if you decide to leave your job, you already have at least three paying clients, ideally 10. That way you don't jump out of your job and into this cold, harsh world that says like F you, there's no way for you to make money. You already have people that are paying you. You know you have value. So that's a way to really mitigate risk. You're continuing to get the security of your job. You're funneling tons of cash away into your savings account. You're also working on getting clients, and there's tons of free material out there as to how to do that. And by the time you get three to 10 paying clients, you can decide, hey, am I ready to do this full time? This is a path many of my students have done, and I hope it's something you'll consider for yourself as well. Thanks for the it.
