I just sent my first invoice as a freelancer. It turns out that I have covered all my cost-of-living expenses (and then some) for March by working just a few hours every other day. What an amazing proof of concept.
Being paid an hourly rate and being able to work whenever (when there is work available) results in a very direct evaluation of whether I would rather do nothing, that is, watch TV, read a book, go for a ride, or earn money. It puts a direct price on my time and I can make the choice at anytime. Yes, I’m sacrificing potential income by writing this post
Throughout my life I have always been salaried and this is the first time I have been paid by the hour. Being salaried implies that my employer owns my services for a month at a time(*). However, I think this results in a certain disconnect between my efforts and my remuneration similar to how using a credit card disconnects the act of purchasing from the act of paying.
(*) Certain restrictions apply
Combine a salary with a job and we have the ideal disconnect of economical reality. Show up for work and swipe a piece of plastic to get stuff. Emotionally or viscerally it is a good approximation to say the one does not have to worry about the value of one’s time at all. Of course traditional schooling with its institutionalized conditioning (show up on time and perform repetitive tasks) and lack of instruction in money skills (what is this compound interest you speak of?) sends the flock right into this trap.
Some people regains some connection by refusing to use plastic. Paying in cash gives a tangible understanding of value. Now you have a $50 bill. Now you’re paying. Now you have stuff, but you don’t have a $50 bill anymore.
More connection is gained by hourly rates and the freedom to work whenever, but I think true understanding is gained by contracting. For a contract the estimate of your hourly value is up to you. On an hourly wage, there is little reason to go into overspeed other than giving the impression of being an effective worker. However, being paid a finite amount regardless of how long it takes gives a lot of incentive for finishing fast. In that regard it is interesting why all jobs that have a quantifiable performance metric are not contract based.
Originally posted 2008-04-01 07:38:42.