Freelancing is great if you've built up a network of professional contacts who appreciate your work and will both contract you and recommend you to their network when someone is looking for work done. You typically get paid a far higher hourly rate than if you are working full-time - my contract day rate amounts to nearly double my full-time day rate.

And presuming you keep delivering, impressing people, and gaining more skill and experience, it just goes up and up and up.

Like anything else, it is much harder if you are on the bottom rung.

Your double hourly rate for contracting might be gross, and after taxes (covering both sides of FICA), health insurance, and other employer-provided benefits, the net delta could be smaller.

In any business to business contract, don't be afraid to negotiate aggressive payment terms. I learned that the hard way with my first client being net-15. The higher the payment takes the settle, the more trade credit you are offering your client, increasing their PAYDEX score while messing with your cash flow. Ask for at least half up front.

Or hire a factoring company to take the risk out of it for you. Some banks provide this service. Sure, they take a percentage, but for a one man band, it's often worth the pace of mind to offload this work to a professional.

It's like any other business - you don't want to put all your eggs in one basket - either with suppliers, clients/customers, or employees. Optimally a freelancer will not be stuck with one client.

The hourly rate is greater for a reason.

Yes you work on sales to get the contract. Then often you must continue the sale to use the hours. Some people thrive on this. But it can be exhausting.

A lot of freelancers are just people doing one year contracts. In that context, that isn't too bad as engineers are constantly moving anyway.