Well, let's just say that I speak for my own 10+ years co-running Matasano, plus Patrick (my current cofounder), plus everyone I know personally who has run a contracting firm, including a few besides Patrick that also had nosebleed rates.

Generally, unless you have a team, if you're finding that you can multiply your hourly rate by 2000 and get within shouting distance of your annual gross, that means you're not charging enough.

There are a lot of good things that come from jacking your rates up, beyond just being able to make the same amount of money while doing far less work.

I must be running a public service then. We find it easy to stay 100% busy, and 2000 X rate is well north of the number this thread started with. No need to up the rate; maybe the market would support it. Working less sounds attractive though!

If you back out your hourly rate, is it within $100 of an effective hourly rate you think you could get (maybe with some hustling) as a full time engineer somewhere?

Sadly, no, I could never earn like this as an employee.

Nice. If you're billing over $2k/day, I don't get to be patronizing to you.

A pretty common strategy is to dial your rate to a point where you're consistently between 70-80% utilized, and to raise your rates some % for all new clients annually.

At a consultancy with a team of people, a utilization rate over 85% might be considered overheated, risking burning people out.

(Though if you're running a body shop you don't care about overheating).

If it was just me and a partner consulting, I'd use rates to dial utilization back to 50%.