Making a Living as a Freelancer: Fits, Doubts and Windfalls

As any freelancer, I occasionally doubt my abilities. Not only my abilities to produce value for my editing clients or my capacity for writing engaging material for various outlets, but my ability to earn a (comfortable) living doing so.

Like any good economist, I understand that decisions about lifestyle choices ultimately come down to marginal comparisons to what my next-best option is — not just in the abstract (NASA isn’t hiring me for space travel; nor National Geographic for swimming with orcas) but realistically.

That means some things within my competence zone — banking, financial markets analysis, fund managing — disappear right off the bat: I probably could get a job in consulting in some financial hub around the world (London, Sydney, Stockholm, Frankfurt etc) if I played the hiring game right (ugh!) and submitted to office politics, long hours, annoying commutes and less-than-satisfactory job assignments. I wager that I’ll be bored, frustrated or annoyed, — socially or professionally — within a few months.

What’s left are some jobs that I’m both qualified for and would be interested in (editing, policy-oriented work, think tank research, research, publishing).

But first, the lay of the land so far.

Finances

While these are still early days where I’m trying to establish myself and get regular clients, so far the results are average. Average, because I know I can do better (quality: produce more valuable content or land higher-paying gigs) and I can spend more time working (quantity) and average, because the money is still not quite matching what a feasible job would offer (see below).

Measuring from August last year when I started doing this wholeheartedly and with no other commitments or distractions (I had been sporadically writing and doing research for about a year before that, mashed in-between other assignments), I’ve earned $13,500 in gross earnings.

As I’m still running this through the format of self-employment that my native Sweden allows (I’m looking into setting up in places with better tax treatment such as Estonia or Malta — give me a shout-out if you have experience with that), our dear tax collectors grab about $3,500 of that (the Real Nordic model: tax low-earners a lot!), for net take-home earnings of $10k — extrapolating that over a full year and including a nice little upward trend (+$25/month), I arrive at 17–18k in annual earnings. (With experience and routine and discipline I imagine I can bump this up a bit more in the future).

On that less-than-cushy lifestyle, I have a bunch of costs, sometimes rather elevated ones — a financial price I pay for the privilege of spending my days in tempting natures and stunning places. Some of those costs are also subsidized by occasionally spending time at family’s and friends’ places, people who, so far, have been kind enough not to charge me rent. In sum, my expenses so far have been a little over $11,000, but that sum includes amortization for tech and flights that were misleadingly covered by vouchers and points, making a more comparable number a little above $10,000.

Cheap credit, generous family support and booming stock markets have so far more than made up for the shortfall.

The Alternative: Regular Jobs

Googling around, I’ve seen gross salary specifications for the kind of employment I’d consider ranging between $33,000 to $45,000 a year in places as widely diverging as London, Stockholm, Sydney or Washington, D.C. — for all their differences, not exactly cheap places to live.

I turned down an offer of $31,000 in Malmö, Sweden, and was passed over for another in London of $28,000 — though the former came with lots of valuable fringe benefits that should up the value somewhat. After taxes, I’d be looking at roughly $24,000 in Malmö and $23,600 in London (those Swedish taxes again…) For comparable numbers, I should ideally add decent pension contributions and the custom of regular and above-inflation pay raises, but that’s a story for another time so I’m currently abstracting from that.

There are also some cost items that holding down a job in a high-cost metropolis impose on me that my current nomad lifestyle largely avoids: (excessively) costly housing, expenses for commuting, and, to some extent, clothing. In contrast, my commutes in Costa Rica last fall were literally five or six meters — twenty-five if you include a detour to the kitchen first. And I wore flip-flops and beach gear to work.

These costs should weigh negatively on the Regular Job scenario by at least $4,500 a year. Not to mention that food in those places are markedly more expensive than in the markets I currently shop around, so let’s make it an even 5k.

After taxes, and adjusting for higher clothing, commuting, food and housing costs, I estimate that my suitable alternatives would amount to between $18k (lowest estimate) and 25k (highest estimate) after taxes, adjusting for higher clothing, commuting and housing costs.

The Verdict: Is It Worth It?

Let’s say that a feasible take-home pay for me to aim at this year is $17,500 after taxes. That’s right in-between the range I extrapolated above and, without disasters or windfalls, quite plausible.

Similarly, let’s take the mid-point in the financial estimate of my other options: $21,500.

For an additional $4,000 extra, a rough 20% boost to my current financial standard of living, I would be giving up:

• Flexibility: including the ability to treat my increasingly invasive migraines when they emerge and ruin my day’s schedule. Other things are valuable here too, such as the ability to enjoy the sun on a weekday, take the day off and hike to a waterfall, or schedule my work so that I get early mornings off or can go for long afternoon runs, catching up on podcasts.
• Nomad gene: perhaps a subcategory to ‘Flexibility’, I treasure the chance I have to discover the world, pack-up and leave, go somewhere I’ve always wanted — and stay there for longer than a few weeks of annual leave would permit. This, too, has a social implication as I can go visit friends who live abroad much more than I would be able to under a more standard nine-to-five job.
• Work assignments: The two things that attracted me most with the world of Academia was firstly, the independence in research topics and the accompanying flexibility in scheduling one’s own work. As one of my mentors always said when I asked her for career advice: Nobody cares if you play with your data at 3 pm in the office or at 3 am at your kitchen table. Secondly, you get to emerge yourself in really exciting questions, writing and reading about the topics that interest you rather than the ones your boss assigns you.

This last one I’m glad to say, I’ve now embraced completely: I work on the topics I enjoy (finance, history, crypto, environment, money — oh, and writing cute pop-culture pieces about Harry Potter or Margin Call or The Big Short, or figuring out how wealthy Mr. Darcy really was) whenever I want to. When the weather sucks, I’ll stay in and work some more — when it’s wonderful, I’ll go explore my surroundings. If I wanna write from my bed, that’s what I’ll do; if I feel like joining other nomads in town, I’ll go to my regular writing cafés.

4k is nothing to joke about, and invested prudently and with accompanying pension contributions that adds up quickly (I’ll save that kind of life-time earnings calculations for another time).

But at these levels, it’s also not life-changing.

I love what I do and I love the lifestyle flexibility it affords me. It’s still early, I’m still excited about its challenges and I’m slowly branching out to more outlets, complementing my income streams.

I would not give it up for an effective 4k pay bump.

You can look at my choice to pursue a freelancing career as a choice of giving up 20% of my potential earnings, to free up time, energy, effort and geographical flexibility to satisfy that pesky nomad gene of mine — that endless desire to move, explore and discover new places that Nomadic Matt (of Ten Years a Nomad) always talks about. If I put that offer to a lot of people in regular jobs, I suspect that most of them would take it.

Now, is there a number at which I would abandon this experiment of mine and take up the Regular Job scenario above? Absolutely: there’s always a number. 4k is definitely not that number.

10k might be. And at 15k extra I’m definitely tempted.

Until somebody offers me that, I’m gonna stay put and write on: