Finances & Money

I made a major career choice today

I guess this comes at an appropriate time since I just wrote about “Career Planning“. A coworker from my last contract who runs his own company had contacted me a few weeks ago about an opportunity with a major “world banking institution”. The big thing about about this contract was that I would work as an independent contractor. I would be my own company. So I sent my resume along and waited to be called in for an interview.

First: The Cons

Well, no benefits, I would have to register myself as a corporation and I would have to hire an accountant to handle the business, and I would have deal with a whole lot of risk because the contract is only for 4 months, and I would no longer getting biweekly paychecks.

You see, independent contractors get paid every 30-45 days, sometimes even longer if the client doesn’t have their act together. We have enough to cover us for that long, but then again, the contract could suddenly end at any time, much like it did with my last contract. Then what would I do?

So basically, I have to quit my stable job, with all its benefits, go on Stacie’s insurance and worry about what happens during and after those 4 months.

Next: The Pros

The biggest pro for this whole job change is ALMOST DOUBLE MY CURRENT INCOME! Some of you know I make a good salary now (for the D.C. area), and we’re paying off our debt at a decent clip, so just imagine if my hourly rate nearly doubled. However, it’s only for a 4 month period…for now. In reality, there’s a likelihood of winning the next phase of the contract which starts immediately after this one and continues for 2 years.

Additionally, I DO have Stacie’s benefits so I wouldn’t have to get my own medical or dental. I would control my hours (to a degree) and would be working on pretty exciting things. I could still ride the metro to work, or choose to work mainly out of our home. I can deduct my home office legitimately, as well as many other expenses.

The Decision

There are more positives and negatives about the job, but I had to make a decision tonight so I wouldn’t leave my friend hanging. The client has already accepted my resume even without an interview, and they want to start next Monday. However, since we need to get cleared and have a drug screen (which we would each pay about $700 out-of-pocket), we couldn’t possibly start that quickly. So what did I decide to do?

I decided to decline the offer. I may feel bad about it in a couple months, but then again, I may be vindicated if the project collapses. Either way, it just wasn’t the right time in our lives considering some shake-ups at my wife’s job, my schooling (and that I would owe $10,000 back to my employer for tuition), and the general risk. If it was longer-term with a few more deliverables to fill out the time, then I might have taken the job. But not right now.

However, I do still have other leads through this friend for some positions actually very close to our home, as well as other leads through an old boss. I’m not unhappy with my current job, just bored, and I don’t want to close the door to other opportunities simply out of loyalty or fear. I’m not actively looking for a job, so it’s good to know that I’m still “desirable” when I’m not trying.

About the author

Clever Dude


  • I suppose 4 months is a little short.

    Still like you said, knowing that you command such a price in the market place would have given you a nice feeling.

    I am sure an even better opportunity is just around the corner.

  • Contracts are a tough thing to tackle sometimes. I work as a recruiter in the IT industry. Short term is especially hard to do if you don’t have the ability for flexibility.

  • Richorlin, the difference between a salaried position and an independent contractor is pretty drastic. You have to consider the cost of benefits received by your company as well as who is bearing the risk (your company mostly if you’re an employee, but YOU if you’re on your own).

    The main reason my pay would be so high is because of the risk of the position. Also, the client has a lot of money to spend and thus the negotiated billing rate is pretty high. So high, in fact, that two of us would split the total rate and I would be making the lesser of the two!

    Overall, though, I think I’m making what I should given my experience, skills and the area. Sometimes I even think I’m overpaid because I don’t really do that much, but I still get the job done.

  • Deciding to strike out on your own is something only you can decide to do, but given your situation I can see why you made the decision that you did.

    I moved to the DC area in 1999 for a job, and I’ve always been a W2. Last October, an old boss of mine tracked me down for a 1099 contract (1 year with option to renew).

    Give up my 2 mile commute for a 23 mile one around the beltway? COBRA my insurance? Pay my own quarterly estimated taxes? Blasphemy.

    For me, it ultimately came down to working with (not for) a boss I really like, an opportunity to learn something new, and a project that’s trying to cure diseases. More money is nice, but that wasn’t what sold me.

    I could probably write a whole blog about being self-employed. There’s a lot of stuff on the internet(s), but never those important questions you need answered…

  • Honestly, in DC, you have to make triple your regular salary as a contractor to make the risks worthwhile most of the time, especially since the contract rarely employ you for a full 12 months. You’ll end up netting about say, double your salary, and then you have to pay out 12.5% in self-employment taxes, etc. The other upside is the ability to write off a lot of expenses, but the steadiness of a paycheck can really ease your mind.

    I’m all for big risks, but if this is the right decision for you, I am sure another opportunity like this will be available again.

  • I think that makes sense. As long as they have good work for you and you get the benefits like the classes and such it seems like a good choice right now. Maybe when your debt is paid off and you finish your degree. 🙂

  • I often think about looking into becoming an independent contractor, but of course I would need to find a client first. 🙂 I don’t know what your current work situation is, but compared to consulting, there is one major difference besides the benefits. As an independent contractor you typically get paid for overtime, while as a consultant, I don’t. That one reason I often think about moving to independent contracting!

  • I wouldn’t feel bad about it. I was recently in the same position as you are. I was offered a contract position that nearly doubled my current salary. But working as a contractor means you generally don’t get any benefits.

    If you don’t have a spouse to piggyback insurance off of, buying your own health and dental insurance can quickly eat into your increased earnings.

    Like you, I decided to stick with my day job. The security of a bi-monthly paycheck with amazing benefits from a Fortune 500 are hard to beat. Even if it is half the pay of a contract position.

  • Well I’m currently taking some time off from my contract legal work as well. Contract work definitely pays A LOT more but there’s the obvious unpredictability…although less so if you know how to roll from project to project. I’ve worked full time before and never enjoyed the trapped feeling I always had…

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