The Ruby Freelancers Show 045 – Employment Vs Freelancing

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Panel Eric Davis (twitter github blog) Charles Max Wood (twitter github Teach Me To Code Rails Ramp Up) Discussion 01:41 - Employment History 06:58 - Perks of Being a Freelancer Variety of Job Areas Choose Your Work Flexibility & Freedom 15:22 - Paycheck Security Unemployment Contractors Vs Employees 20:54 - Coast-Along Employees 21:50 - Health Benefits 23:34 - Marketing & Selling Providing Value to a Company 27:27 - Business Skills 29:37 - Self-Direction & Motivation 32:48 - Loans 34:51 - Going Back to Work (after freelancing) Picks Free Agent Nation: The Future of Working for Yourself by Daniel H. Pink (Eric) Powermat Home & Office Mat (Chuck) Une Bobine (Chuck) Transcript ERIC: Hold on, I got to shut my door. My dog opened it and I don't want the cats to come fly in here. [Are you a busy Ruby developer who wants to take their freelance business to the next level? Interested in working smarter not harder? Then check out the upcoming book “Next Level Freelancing - Developer Edition Practical Steps to Work Less, Travel and Make More Money”. It includes interviews and case studies with successful freelancers, who have made a killing by expanding their consultancy, develop passive income through informational products, build successful SaaS products, and become rockstar consultants making a minimum of $200/hour. There are all kinds of practical steps on getting started and if you sign up now, you’ll get 50% off when it’s released. You can find it at nextlevelfreelancing.com][hosting and bandwidth provided by the blue box group. check them out at bluebox.net] CHUCK: Hey everybody and welcome to Episode 45 of the Ruby Freelancer Show! This week on our panel, we have Eric Davis. ERIC: I had tea to drink! CHUCK: And I'm Charles Max Wood from devchat.tv. This week we're going to be talking about the Risks of Freelancing versus Fulltime Development. The general idea is that -- I get a lot of people that we talk to and basically the idea is this that they're like "well, I would go freelance because it looks like you'll get a lot of perks, but I just can't stand the risk". To me it just doesn't feel as risky. So we're going to talk about that; talk about some of the what's and why's and maybe why freelancing is or isn't as risky as being a fulltime employee and some of the other things that related to that. I'm a little curious Eric, what is your kind of your employment history? ERIC: I worked when I was in high school, just normal high school type jobs. Went to college, did some college jobs like delivered pizza, that sort of thing. And then right after college, went to work for a software company and actually got started there in technical support, then went to testing, and then went to software development. So I was like going through and by the end of it, I was doing desktop software development, wasn't in a mobile at the time. I did all the web development, manage all their servers, manage their network, and so I like had my hand in a lot of pies by there. Then after that, we moved and I started my own company. CHUCK: Wow! After college you worked for one company and then went freelance? ERIC: Yeah, pretty much. In college, I'd say freshman year or maybe sophomore year-ish, I got heavy into like reading about entrepreneurship and all that. I've actually started 2 or 3 businesses. I didn't know what I was doing and basically, looking back at it now, it was stupid for me to do those. But I learned enough at that time and figured out that I like running my own business. And so basically most of the jobs that I had were just stop gaps to pay the bills and to learn more and tell I was actually felt confident enough that I could actually run my own company. CHUCK: Yeah that makes sense. So my work history is somewhat similar. I worked in high school, too, I worked at grocery stores as baggers and checkers, and whatever.

Transcript

ERIC: Hold on, I got to shut my door. My dog opened it and I don't want the cats to come fly in here. [Are you a busy Ruby developer who wants to take their freelance business to the next level? Interested in working smarter not harder? Then check out the upcoming book “Next Level Freelancing - Developer Edition Practical Steps to Work Less, Travel and Make More Money”. It includes interviews and case studies with successful freelancers, who have made a killing by expanding their consultancy, develop passive income through informational products, build successful SaaS products, and become rockstar consultants making a minimum of $200/hour. There are all kinds of practical steps on getting started and if you sign up now, you’ll get 50% off when it’s released. You can find it at nextlevelfreelancing.com] [Hosting and bandwidth provided by the Blue Box Group. Check them out at bluebox.net] CHUCK: Hey everybody and welcome to Episode 45 of the Ruby Freelancer Show! This week on our panel, we have Eric Davis. ERIC: I had tea to drink! CHUCK: And I'm Charles Max Wood from devchat.tv. This week we're going to be talking about the Risks of Freelancing versus Fulltime Development. The general idea is that -- I get a lot of people that we talk to and basically the idea is this that they're like "well, I would go freelance because it looks like you'll get a lot of perks, but I just can't stand the risk". To me it just doesn't feel as risky. So we're going to talk about that; talk about some of the what's and why's and maybe why freelancing is or isn't as risky as being a fulltime employee and some of the other things that related to that. I'm a little curious Eric, what is your kind of your employment history? ERIC: I worked when I was in high school, just normal high school type jobs. Went to college, did some college jobs like delivered pizza, that sort of thing. And then right after college, went to work for a software company and actually got started there in technical support, then went to testing, and then went to software development. So I was like going through and by the end of it, I was doing desktop software development, wasn't in a mobile at the time. I did all the web development, manage all their servers, manage their network, and so I like had my hand in a lot of pies by there. Then after that, we moved and I started my own company. CHUCK: Wow! After college you worked for one company and then went freelance? ERIC: Yeah, pretty much. In college, I'd say freshman year or maybe sophomore year-ish, I got heavy into like reading about entrepreneurship and all that. I've actually started 2 or 3 businesses. I didn't know what I was doing and basically, looking back at it now, it was stupid for me to do those. But I learned enough at that time and figured out that I like running my own business. And so basically most of the jobs that I had were just stop gaps to pay the bills and to learn more and tell I was actually felt confident enough that I could actually run my own company. CHUCK: Yeah that makes sense. So my work history is somewhat similar. I worked in high school, too, I worked at grocery stores as baggers and checkers, and whatever. I think I did some call center jobs, too in high school. And then in college, when I was in college I actually started out doing custodial when I met a guy who is working for the university in the I.T department. He went and told me who to talk to and where to apply so I went and applied and then worked in a network corporation center at BYU, that's Brigham Young University in Provo, is where I went to school. And I worked there for like 2 or 3 years and then the server management team that set up the servers for the different departments as well as maintain them at the OS level, my friend had been hired over there so he stuck his neck out again and got me hired over there. So by the time I graduated, I had been doing I.T for probably 4 or 5 years and I got a job working for a company out here called "Mozy" who debut online backup when I was hired on as the second tech support guy. And then as things evolved, they eventually wind up running the tech support department; I had about 30 techs working under me, so I was kind of on the track to go in the management. And while I was there, they weren't pretty -- they weren't start up the mode and so every penny counted. And so what happened was we asked them for tools because we gotten covered in the Wallstreet Journal and the company was growing like crazy. Sometimes excesses is both a blessing and a course, and it was very much the case there. They just couldn't -- they were spending all their money trying to keep up with demand. And so they didn't buy the tools, so we started programming them on our own and that's how I really got into programming. I graduated in Computer Engineering so I've done coding, but most of my focus in college was on hardware. So anyway, I did that for a while and so I was both building the tool and managing and training the tech support. And the company got acquired; I got tired of it - the politics. And so I moved in to QA because the politics were much more bearable there because you were just the tech doing the job over there. And at the same time, I was hoping that it get in the management or into programming. So I was there for six months, put out some job or some applications, I got an offer for programming jobs so I went there and I bounce from that job. I liked that job, but they ran out of Rails works so they laid me off. So I went and worked to another company for a year, and I hated them! So I started looking around for another job, wind up working with David Brady at a company up in Salt Lake City. I was there for about 6 or 7 months and then they laid me off. And the reason that any of that's important is just because if you think about that, you're going to understand where my point of view is with fulltime employment versus being freelance. Because I went freelance after that and things had worked out pretty nicely for me. I hope that kind of gives you an idea where both of us are going to come from when we talk about this. ERIC: [inaudible] Timeline wise for me, I think I worked at that software company for 2 years, it might have been 3, and then I've been doing my business since, I think 2007. So that's about like 5 1/2 years right now. CHUCK: Yup. When I got laid off in 2011, September of 200 -- no, it might have been 2010, I don't remember, but it was one of those. So I've freelance for a year and a half or 2 1/2 years, however that works out. Anyway, let's talk real quickly about the perks of being freelance before we talk about some of the risks. ERIC: One perk that kind of made me go freelance and do that was..if you work for a company, typically you're going to get experience in what that company does. If you work for like a big company like say IBM or whatever, you might be able to move departments if you want to change like what [inaudible]. They're going to have a server area, they're going to have stuff for web, stuff for mobile. But if you work for kind of a mid-size or small company, most of those don't do very much or kind of specialize on what they do so you're not going to have as much opportunity that you get into like completely new areas. And so for me, the company I worked for they basically did mobile stuff before smartphones were really out. And so they were heavy on the mobile and they had some desktop side, so I got into the desktop side even though I didn't know it. I've came into as a web programmer and so their web stuff was just basically like marketing sites, there wasn't much to it. So my area of growth in the web site was very very capped, like I couldn't do very much there, and so I grew into the desktop and the kind of I.T infrastructure. After I left there, I was like kind of look for another job and I say like "well I'll try freelancing and see what I can do" and the whole point, I had this written down somewhere, too, was I want to work with a bunch of different companies so that I have exposure to different companies; different company products, different software development processes, tools, different teams, styles, all that, to kind of get an idea what works, what didn't work and kind of get more like a more broader experience than I've worked in mobile games for 5 years or something. And so that's kind of the...I guess the underlined draw of freelancing for me is that you can work for a variety of different people, teams, processes, and technologies. And it can change from month to month, depending on how your clients are. CHUCK: Yeah I've seen that, too, though I have to say that in some of the places that I worked, they had myriad technologies and things that you can move around in. When I was doing QA at Mozy, their back-end was written in one technology and worked off of certain principles and then their front-end technologies with the web interfaces, and then the clients for sending files back to the back-end. All of those were different and so you could get a pretty good mix. However, what you're saying as far as development goes, yeah the same guys were working the same layers all the time. And so if you were a Windows client guy, you are working in the Windows client; you weren't touching the Mac client, you weren't touching the back end, you weren't touching the restores capabilities or anything like that. ERIC: Right. And if you ever like if you want to go from the Windows to the Mac side, you could, but you'd have to start over; and it would be a multi-area process where with freelancing, you can kind of do that transition a bit faster, just depending on picking up a new client. CHUCK: Yup. The second job, I was also at -- I was working for a consulting firm. And see, you kind of get that a little bit, but you don't get the say as to when you move on; you don't get the say as to which projects you get put on. And that's one of the nice things about the freelance; being freelance is you get to pick. If you only have one person asking you to work for him and you need the money, then I guess you don't really get to pick. But most of the time, you can kind of gear your marketing and things toward things that you want to be involved in. And you ultimately have the say as whether or not you take the job where in the consulting firm, you really don't. But yeah, the rest of my jobs it was one app, one large app. You can get as much variation as the technology allowed and the needs of the company permitted. So yeah, I totally agree with you there. One of the other perks that I really like about being freelance is that I can work wherever I want, whenever I want. I had some jobs that were kind of like that, but they mostly want you around when the rest of the team is in. And if you're freelance and you’re working a contract where it's just you or maybe just you and one or two other people, you can usually coordinate things that you can work whenever you want. ERIC: Yeah, I get the two of them and it is that I have like location flexibility like as long as I have high-speed internet, I can work; but time flexibility is not as easy. Most of my clients' HYPE meetings with them or they have different schedules, and so I kind of have to conform to their schedule for the most part. There might be some things like I could do couple of hours of development late at night if I need to take like an afternoon off, but I can't really like REALLY time-shift my things too much just because I do a lot of really closed one on one work with my clients. CHUCK: Yeah, I found that it depends on the client for me. So some of them, they want to be able to call you in the middle of the day, like you said the HYPE meetings, and some of them all they really want to do is dump requirements into a bucket, so that bucket could be your pivotal tracker or red mine or something. And then, they just want to seem cranked up on the other end, so the only real time sensitive thing issue clarifying those requirements. And most of the times, you're working on one thing and clarifying requirements or something else. So you could stay out of it that way. ERIC: I had a client like that. He was actually based in Europe so we had a really -- West Coast [inaudible], I can't remember the difference in time, but he would call me when he's ending his day which should be early in my morning, or I'd call him when I'm ending my day which should be early his next day. And so we were just starting to kind of plan stuff, but for the most part he just basically had a bullet-enlisted "here's the order of things to do", and we just used email and stuff like that to kind of keep in touch about details. CHUCK: And I found that that's kind of nice so I've talking to a fellow in Australia. And so early afternoon here is like first thing in the morning there, and that's been kind of nice because he can get up and he can start the day by talking to me about some of the prospects that we're working on. And then he goes on his merry way, and he's doing sales while I'm having dinner with my family and going to bed. And so it can work out kind of nicely to have that kind of a time shift. ERIC: Yeah. And like I said, it depends on your clients, depends on how you have it structured. But you do get a lot more flexibility versus like here in the office from 9-5. CHUCK: That is also one of the risks, I think, that come into freelancing a little bit. Because due to that time shift, you may or may not be the right fit. But -- I kind of want to start tying this back to fulltime employment, at the same if you're trying to get a fulltime job. I mean it's the same kind of deal; you're just trying to get hired fulltime instead of trying to get a contract. Am I misconstruing that at all? ERIC: I'm not sure what you're saying. CHUCK: So for example, if I'm 8 hours off from somebody, that's about what it is from here to Europe, then it may work out great for them. Or they may need that "high-touched Europe when I'm up", you know you're online when I'm online, and so it may not be a good fit. But it seems like it's kind of the same thing when you're trying to get hired for fulltime job - you have the same challenges. ERIC: Yeah. I kind of look at it as...when you're freelancing, that's not that you can work anytime you want and work anywhere you want, it's kind of a scale of how flexible are your time and your working environments. If you're working fulltime for an employer, they might be half across the world, and they want you to work during your normal business hours just like for support coverage. Or you might be able to work for an employer remote where they don't care where you work, as long as you work. And I mean that's kind of the corporate policies or whatever the company saids up. I just found in general, freelancers tend to have and skewed more towards more freedom than less freedom, which is more on the employer side. CHUCK: Yeah. They kind of arrange things so that it meets their desire for whatever level of freedom or flexibility they want. I do want to jump into one of the other things that a lot of people bring up, and that's that they have the security of a paycheck every week or every other week. Well, that's the big one; and that they don't have to go and find new work or kind of the two big things. So how do you usually address that? Or how would you address that. ERIC: A lot of times I don't, because it's hard for me to be able to kind of understand it. But the way I look at it is, I don't know of the exact term, but the actual employment is kind of how like employment works in America where the employer or the employee can terminate the agreement at any time. Basically that means, if you're a fulltime employee, you could be fired for whatever reason. There are different laws like discrimination and stuff, but you could basically lose your job at any time. And when you're freelancing, you have the same thing like you can get fired by clients at anytime for almost any reason. The main difference is, when you're an employee, you typically working for one company. You might work for two companies if you're moonlighting or you have two part-time gigs, but for the most part, developers work fulltime for a company. So that means that's very similar to a freelancer that works for one client fulltime. Now that happens a lot and I know couple of freelancers who can do that, but most freelancers kind of do multiple clients at any given time. So if one of their clients fires them, they might have 3 or 4 other clients that they still are getting work for. So it's kind of like a diversification of kind of your income from employment and stuff like that. If you're an employee, all your eggs are in one basket with this company that hired you. When you're freelancing, you might have eggs in 6 different baskets based on your clients. CHUCK: Yeah. I do want to bring up (that) there are two things that I think you can kind of make an argument for fulltime employment being more secur -- I hate that word secure, but more...whatever, secure I guess, than freelancing. And the two things are basically these: first, if they let you go you can collect unemployment; and if you're a freelancer and they let you go, you are lucky, you don't get unemployment. But like you said, you can arrange things so that for the most part if you get -- if you lose the contract, then you can move on to the other contracts that you already have. And hopefully, you have other work in your pipeline and so you can just make it up, it doesn’t' really affect you financially. The other thing is this that, I found that a lot of companies, unless a freelancer is adding a TON of value such that they're kind of the indispensible person on the team, the company is tend to be more likely to let the contractors go than their own employees go. But those are the only two things. And like you said the unemployment really -- that can be mitigated just by how you would market yourself. And the other, there's really nothing you can do about it. ERIC: Whoa! I mean that thing of unemployment -- I haven't formed the exact numbers because it's quite in the US bay, every employer pays (is it 7), no every employee pays I think 7%...no that's something else, okay never mind. Every employer pays (unemployment insurance), so there is a cost of a, I don't know if it's a percentage or a flat-rate or whatever, I can ask my wife, but -- CHUCK: I think it varies from state to state. ERIC: Yeah, I think it varies from state to state and also like industry to industry and -- I mean it's an insurance. So it's going to be completely case by case basis. But every employer pays for unemployment insurance. And basically what they're doing is that's money of that, if you think about it, they're taking out of the employee's paycheck like they could've given that to the employee, but they're not because it required by law to pay it. So basically, at employees getting this insurance policy that if you get unemployed, you're going to get some benefits. And in exchange for that, they're getting a lower amount of income. So if you'll look at it like that, as a freelancer, your clients (are) not paying for unemployment insurance, so they're giving you the full amount of money. What you should do if you want to mimic that is you should take a certain amount of money and put that into same account as your own unemployment insurance. And we've talked about this as the emergency fund. And realistically if you do that, then there's basically no difference between the two. If I remember unemployment insurance, you don't get much of a bonus other than what the employers pay like I think the state or whatever. They don't add very much value to it, it's only (the) employer that's paying you. So in my mind, that's almost a new point. I mean the less you have no savings and you don't have any kind of financial thing built up to do that, then okay maybe unemployment benefit could be something good, but that's like a worst case. If you're really trying to do a good job, you shouldn't get fired or let go unless the company is going under. And if they go under, I don't know if they can pay their unemployment insurance at all. CHUCK: Yeah I think if they go out of business or -- I don't know if they can bankrupt their unemployment responsibilities, but yeah if they're not in business anymore, then they're not paying that anymore. So, that's interesting. I didn't really think about all of those different considerations, but yeah -- ERIC: There's one benefit I can think of for being an employee instead of a freelancer. And personally I don't agree of it, but I can see it actually works. In that ways, if you're kind of a coast-along type of employee, where you're not doing a lot of great work, 5:01 you clock out, as an employee you can kind of ride that for a significant amount of time, if not your entire life. As a freelancer, you can't. Because you're probably charging a lot more and the clients (are) looking for results. And if they see that this freelancer is just coasting-along, they'll fire them. So that's kind of a benefit I could see for the fulltime employment side, but that's not really something to be proud of, in my opinion. CHUCK: Yeah, I agree with that. And I've seen people who were just there to collect the paycheck. And if they're actually get work done, well, bonus for the company. So yeah, that's definitely something there. The other thing that I hear some people talk about is like health benefits and things like that, but again, I found that I make enough more as a freelancer to be able to just pay for my own benefits. ERIC: Yeah. And we have our own personal plans, too, like we're not on a group policy or anything. And are we actually compared what we're paying and what benefits we get to my wife's plan, and her employer, they do a pretty good amount. I haven't seen any other employer that pays as good benefits, and our personal plan was still a better value for us. On the other side, it's...I don't know how it's changing, but in the US there's a lot of changes with the medical and insurance stuff that could change in a year. And if you want to base a long-term career decision on just a cost of things, you kind of need to take a look at that because that could actually really affect your decision. I've heard theirs going to go a complete open thing where they're really is in group plan and if that's the case, then the whole benefit of being an employee goes away. CHUCK: Yup. It's a little different for me because I have a chronic -- I have type 2 diabetes. So when I tried to switch on to another plan, all the insurance company is kind of "whoa, whoa, whoa!" But I mean, I'm paying the state for my health insurance. We're paying for my wife and kids to be on their plan. I think we're paying less than they were taking out of my check; at any of my other jobs, for all that coverage, it's just really interesting to see that. So, what it seems to come down to for most people when you really talk (to) them through this, is whether or not they think they can market themselves. ERIC: Yeah. I mean, in case someone doesn't know, my wife is in HR. She's been in HR for longer that I've been doing developing, and so I see a lot of the like the employer-employee side, but from what the actual employers are doing, And basically, if you really see the "think" of business, they're not going to hire an employee unless hiring that employee cost them less than the employee brings in, as far as additional revenue. So if you are an employee, you could kind of think like "I'm bringing in this much for the company". If you're bringing that much, in theory, as a freelancer you could charge less than that make the company a profit and possibly make more than your actual  employee salary. So you have to look at the full relationship of "being an employee; being an employer and the market that all of us stand". CHUCK: Yeah. And it does vary from market to market. I've heard different markets, say different things. I think the rule of thumb I hear the most of in it is that the emloyee should make the company a 100% more than the company is paying for them. But I think it really varies by industry and company. ERIC: I think it's double because at least 15% direct for sole security, stuff like that; benefits I think are about 50%. And so then you're looking at maybe 20 or 30% more for kind of the profit side of it. And so yeah, I would say double as pretty much close to where you can think of. CHUCK: Yup. And so when it comes right down to it, if freelancers didn't work out for companies, then this is the other thing that I think people don't really get: is that they've only work for companies that only ever hired employees. But if freelancers didn't work out for the companies that hire them, then we wouldn't be able to find work. And so there is a benefit there and really what it comes down to is you've got to provide the service and make it worth it to the companies that hire you to effectively pay for your work. And if you can do that on a consistent basis, then you've got a business. And people are happy to pay you for that. ERIC: Yeah. I mean it's a value just vacation, like sure you might cost say $100 and only make the company $50, but you're not going to be able to operate for very long like that because (they) worried about...that you're not worth the $100, just kind of get a round. But if you charge the company $100 and make them $1000, you're going to be swamp the fork like you're going to be fighting people way of sticks. CHUCK: Yep, absolutely. And the other thing that I want to make sure that I iterate to a lot of people, who were talking about some of the stuff just drive home, is that you're not going to be the perfect fit for every company. And so some people think "well, I went out and I tried to get some moonlighting business or something, and they wouldn't hire me". Well, maybe you're not great at sales, maybe you're just not a good fit for that company, you just kind of keep working it. And don't fool yourself because the benefits you get from being a freelancer come from hard work. And hard work is hard. So you go out and you do the sales, and you do all the marketing and you do everything else that you have to do, plus serve your clients. Sometimes that takes a lot of time, and it's tough another times; you know it really pays off and you can kick back for a little bit. It just depends on how you structure things and how you want to make things work. But the cool thing is, you can pretty well set things up to master (the) lifestyle you want, you just have to figure out how to give enough people what they want. And then, how to manage the money and other things so that you can get what you want. ERIC: Yeah. That's kind of a fear that a lot of people harvest. Like they might know the technical skill of like writing Ruby or working in Rails, but they don't know the business skills. So they're like "I don't know how to do accounting; I don't know how to market myself". Those are valid points, and that's valid fears if you don't want to do freelancing. I can't remember [inaudible], but the rough number it said, I you can bill 50% of your time as a freelancer and spend all my 50% on the other things, like that's considered good. But realistically like your technical skills, even programming and all that, those are all learned things. Like you can learn how to market, you can learn how to do sales, you can learn accounting. And like you said, it just takes hard work, and time. You're going to screw things up here and there, but realistically each time you screwed up, you're going to get better at it. And so that's something to kind of think about. The nice thing is, I'm experiencing this right now, as a freelancer, I can kind of balance the ratios of my things. So right now, I'm doing probably 80 or 90% of my time as for development. Like I'm really focused on some client work and so I'm not doing much marketing. But in a few months if I decide "Okay, I want to do more marketing", I can put more emphasis on my marketing stuff, less some client work. And then typically, November December, I focus a lot on accounting just because of tax season. But see like I get to pick when I focus on different things; it's not a manager or someone else above me saying "Okay you're going to work on Accounting all this next week, and then after that you're going to work on Marketing. It's like I actually have the choice and I can have a reason behind it. CHUCK: Yep. Yeah, I don't really know that there' anything else I want to add to that. I mean, you pretty well hit it right on the head. One thing that I do want to say is that I'm kind of focused in the same proportions. And I'm looking forward to when I can kind of transition into some of that other stuff that I need to get done. But for right now, you know it's paying off for me to spend 90% of my time focusing on doing programming for my client, and then being able to spend the other 10% running my business and making things work that way. So -- ERIC: Yeah. Well, there's two things I can think of that even if freelancing might be like a good financial decision for you, you want to think about these things, too. It's basically around as in like a good personal decision. The first one, it talks people talk about it in length about getting started of freelance, some it's going to cover [inaudible], but it's the idea of if you know you have work to do, you're kind of self-motivated enough to do the work, or you're going to put it off to the last minute. And that's comes back to as an employee, typically you have a manager or someone above you that tells you what you need to do, and you do it or you'll yelled at. Well, for freelancer you have a little bit of that of clients, but you have to kind of direct and do the work yourself. And so if you're really good about that self-direction, freelancing could be good. If you're not, then freelancing might not be the right thing or you might need to work on changing your skills and your personality to have more of that self-direction. And that can include like you uses of like getting things done or whatever. The other thing which kind of like what we talked about a second ago is, if you're a curious person that wants to learn and know about anything and everything, freelancing is really good for you because you'll get bored or something and want to jump and learn something new. So you might pick up Rails, some Rails internals, and then you'll like "okay I'm bored of this, so I'm going to learn some Java script", and then "I'm bored of this, I'm going to learn a little bit about marketing". That sort of thing, when you're a fulltime employee typically you'll have to do at night or it takes a lot longer for you to kind of say "okay, I'm going to switch from (like you said earlier) like from the Windows programming to Mac programming. If you're freelancer, you can pretty much as do that whenever you want as long as you have the time to do it. So that's kind of -- that's how I am; I'm curious about pretty much anything at everything in the world. And so freelancing works good for me because I can take that time out to try new ideas, and explore, and be curious. CHUCK: Yup. I've seen that myself. Again, that flexibility to "okay, I'm interested in this, I want to do this, I want to learn this", and you figure out how to fit it in. I mean most of the time my clients are people who need my help. And they need it in such a way to where I can actually work with them. They're not driving me to work in a certain way or at a certain time for a certain amount of time. And so for the most part, if I really want to pick something up, I just do it. I just do it and make the time and make it happen. ERIC: Yeah like maybe 9 months ago I guess from right now. I've been doing Rails for couple of years, but like I want to get more into Java scripts so I've spent a few months, dabbling with some more Java scripts more than what I've been doing and took a look at knockout, played around with knockout a bit. And then ended up like me dabbling and learning about knockout was a big factor in one of the clients that I have right now. But if I never was curious about knockout and stayed just in Rails, there's a chance that I wouldn't have work for this client. CHUCK: So are there any other risks or impediments that people bring up to you regarding going freelance? ERIC: There used to be a risk when you were, not necessarily freelance, but self-employed about like getting loans. So in the US, if you're trying to get a house, most banks won't lent you unless your business has been around two years or so, or you have like a ton of cash on hand. It's a risk kind of criteria for the bank like if the company goes under, and you lose your income, you won't make your mortgage, DoF take your house back. So that used to be the case. I don’t' know if it's still as big or a factor as it's used to be say 10 years ago, but that's kind of something to watch out for. A way that kind of prevent that is to have a lot of cash or have good work history where as nice and solid before that, and then the other thing such as run your business for more than two years. And that could be even running on the side just to get the two years up and then do it fulltime after that. CHUCK: One thing that we went through, because we bought this house when I was employed fulltime, but we refinanced it about a year after I went freelance. And so, wasn't as established as they wanted it to. But all they really asked me for was a copy of my bank statement. All they wanted to see in there was that I was getting deposits on the semi-regular basis for enough money to cover the mortgage. And as soon as they had that information, it was not a problem. ERIC: Yeah. I mean I bought this house I guess halfway through my freelancing career. Basically at that point, I got like 2 or 3 years of history and I'm like "here's all my tax statements like this is what I made, this is what I spent. And they looked at that, look at my history and also we had a business [inaudible] so I had a personal emergency fund that, wasn't a lot, but it was a couple of thousand. And so they looked at all that and then like "okay, you know if this business goes under, or if the business stops for like a quarter for some reason, this applicant still has cash on hand to pay the mortgage". And so they were completely fine with it and there really wasn't an issue other than point together more documents from my accountant. CHUCK: Yup. One other thing that I want to bring up, this is more along the career track as opposed to maybe some of the financial risks, but one thing that I've seen with freelancers is I've seen some go back to work, like go back to a "real job"; go back to fulltime employment. And what I've seen happen is that they go back and they wind up being some of the wizbang top employees that wind up at that company. And the reason is not because they're necessarily better programmers, in some cases that's true, in some cases I'm not sure that it was, but the real win was that they understood what it took to run a business, or at least they had a better idea than when they left and went freelancing. And so the company got the benefit of somebody who understood that "Hey, I have to contribute to the bottom line; the company is trying to do these kinds of things and expand in these ways, they need this kind of performance in this kind of work done in order to make it happen". And they could make meaningful contributions to the company both in coding and in other ways because they understood really what it takes to make a business successful. And I've also seen some of these guys move up into like CTO roles and things like that, and again, it's the same thing. They're not just the technical expert, but they're technical expert who can speak to the people that they're dealing with -- the CEO, the other managers, the people below them, stuff like that because they've had to develop those skills as a freelancer. ERIC: Yeah. I mean it's strategy. If you're just doing just programming, you're basically doing day to day work. If you're doing management, it's tactical stuff like you much planning out like a month in advanced. But if you have to run your own business, you really got to look at larger picture things like how am I marketing, what's going to happen, and when are stuffs going to dry up. And that's the more strategic things that sea-level executives have to deal with constantly. And if you were running a company, you're doing freelance for a little bit. And went back to fulltime employment like you have more of that in most employees, you can also just pick that up by just reading and actually kind of looking outside of the bubble of this is what I do every day. Like my wife is actually really good at the strategic stuff even though she's never ran a business. CHUCK: Are there any other topics that we should cover as part of this episode? ERIC: One thing I want to say is we're both freelancers, so we're obviously biased. It's always great to have new people do freelance because they might give us work, we might give them work or at the very least, it's we can talk-shop with them. But if you're comfortable and happy doing fulltime employment, you don't have to leave it, you could stay there. This isn't like a black and white; one thing's right, one thing's wrong. Thing is you got to look at yourself and figure out what you want. And another thing is, you can also kind of moonlight. You can do freelancing on the side, whether you have an ambition to turn it into a fulltime thing or not. But you can get some good experience just from working a couple of hours a week and kind of running a company. CHUCK: Yep, absolutely. Alright, should we get into the picks? ERIC: Sure. CHUCK: Alright. You want to start this out? ERIC: Yes. So I didn't have one in the beginning, but based on the topic I've thought of one. It's a book called "Free Agent Nation" by Dan Pink. I don't know how old it is, looks like 2002-ish, but I read this a while ago. And it basically outlines a lot of things of like what he saw as far as kind of people leaving the big corporate workforces and working as freelancers or just solo entrepreneurs. And it's bit dated-down, but if you actually read it and know kind of the environment, you're going to see that lot of the stuff he said in there actually came true and actually is exactly how it is. One thing is like how Kinko's becomes the third home where everyone goes to Kinko's to use their printers and stuff instead of having an office or working for the big corporate headquarters. And a lot of people do that and a lot of people work at Starbucks and coffee shops and stuff now. It's an interesting book; it's pretty easy to read. You can probably get it used, looks like there's a good condition also, but I've had it recommend. I think I bought 2-3 copies of it because I enjoyed it so much. CHUCK: Cool! Alright well, I've got a couple of picks. The first one is something I got for Christmas and I picked this on some of the other shows, but it is a "power mat". And a power mat is one of those induction charge up your device kind of thing. You have to have the power mat door, is what they call it, but it's the adaptor that sits on the pad and then threw inductants or whatever you may call it. ERIC: Magic! CHUCK: Yeah, magic! Or magnetics. It charges up your device. You can get phone cases for most of the phones out there, for the power mat, they don't have one for the iPhone5 so I haven't charged that up but I've charged up just about every other device I have off of the power mat. It's really super nice. I actually just ordered a couple more doors because my wife got me the one that has 3 pads on it, and it only comes with one door. So anyway, I like it. I think it's really nice. It's flexible enough to where I can just charge up whatever, and then I can take the door off of whatever it is and then take it with me. So I've been doing that with my Kodak Zi8 camera, I did it with my speaker, I have a Bluetooth speaker that just charges off of the wall outlet, I've done with my iPod, and a bunch of other devices. So I think it's a cool gizmo and I'll put a link to it in the Show Notes. The other pick that I have is something that I got at CES called "Une Bobine", I guess. It looks French, U-N-E-B-O-B-I-N-E. It's basically a flexible stand for your iPhone or iPod, and what it is it's got a synch cable in it. So you can charge your phone, or charge your iPod or whatever because it has the 30 pin connector, which again won't work for my iPhone5, I've ordered an adaptor. ERIC: Yeah, it's French for a coil. CHUCK: Yeah. But anyway, it's nice because you can just plug in your phone and you can kind of position it wherever you want, and it's kind of cool. So I saw that at CES, they actually gave me a free one in full disclosure, and so I've been playing with it, I've been really happy with it. So you can check that out. The company that makes it is Fuse Chicken and you can find them at fusechicken.com. So anyway, those are the two things I'm going to pick. I've got a few other things to share but I'm going to save them up for next week. So yeah, I don't think I have anything else. If you want to learn Ruby on Rails, I'm teaching a course in March. It's basically a good way to get unlimited access to me to help you learn Rails, which is way cheaper than paying my coaching rate which at this point is $150 an hour. So if you want to learn Rails, you want to have full access to me, you want to sit down all of the lessons and get digital copies of them and all that stuff, you can go to railsrampup.com. And do you have anything you want to announce, Eric? ERIC: No. But if someone signs up for that, can they heckle you live? CHUCK: I believe so, yes. ERIC: That might be worth it just there. [Chuck laughs] CHUCK: Yeah. Well then be in on the call so...I'm sure they can. Anyway, well if that's it, then we'll wrap this up. We'll catch you all next week end. Thank you all for listening. ERIC: Alright. Take care!

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