1. You're paying a higher marginal tax rate on your earnings than he is on his salary. Self-employment tax is a real bitch.

2. If you're buying your own health insurance, the benefits you get for the price are undoubtable lower than the benefits he gets with his (paid for) package, or you're paying through the nose. "Group plans" are generally better, and cheaper, than individual plans.

3. Should something terrible happen to you, or should you fail to find work for awhile, you are not eligible for unemployment.

I see lots of folks swear by "being a contractor" when they're young, only to start searching for a salaried position after a few bad experiences.

When I took over my company, the absolute first thing I did was switch every "contractor" to a full-time employee. It's better for both parties.

Of course it's better for the company, they want the ability to coerce the employee and hold their livelihood/healthcare hostage.

With my arrangement, I keep the same healthcare plan no matter who I'm working for or what I'm doing.

You can basically always keep your health insurance. You just have to pay a higher premium than your employer paid for it. They aren't "holding your health care hostage", they're given you a benefit of being a part of a group; a risk pool insurance companies are willing to give discounted rates to. Get fired, or quit? Just call the insurance company and ask what it'd cost to keep your coverage as is. There's generally ALWAYS an individual plan available with the exact same benefit levels.

Health insurance used to be a hostage game due primarily to pre-existing conditions. That's becoming less of an issue thanks to new laws (and if you were employable, was never much of an issue anyway).

However, I did not mean "just" insurance. Contractor arrangements are terrible for both the contractor and the company, in the long run.

Independence and the ability to come and go as I please is more valuable to me than whatever risk/reward calculation you're working with in your head.

1. I was never independent. I had a "client", or a "contractor", I was obligated to fulfill. I only got paid if I did so, and I only got more contract jobs if I did a good job.

2. When one contract was over, I had to run out and find another one. While doing so, I was making exactly nothing. If I timed things right, I'd go from one contract to another, but that's not always possible, so I'd have a week or so of dead time where I should have been making money, but didn't.

3. If I was sick, there wasn't a team of structure in place to deal with it. I was sick. I didn't get paid. It sucked. Often it meant I had to do double-shift days to make up the lost time.

4. There was absolutely no "reward". There was just a steady, sometimes unsteady, stream of money, which worked out to about what I'd make salaried somewhere after I factor in everything.

5. As a salaried employee, I was still completely free to quit. No one could "make" me stay at a job I hated. And there aren't many (if any) legal ramifications of doing so. However, as a contractor, I might have a legal obligation (literally a contract), and the client had a completely valid way to sue me if I broke contract by not completing the work. Some clients demanded real contracts for long-term projects, and that absolutely sucked.

6. Founder spend payroll? Great. Contract abruptly ended. Scramble to find more work, no idea when I'll get paid for the money they already owe.

Being a contractor doesn't make you free or independent in any way that a salaried employee isn't.

The only way it works out is if you turn yourself into a business, and hire other people. That's basically what I did, and even now, I'm not really independent. I have employees/clients counting on me.

The only real "independence" comes from wealth that isn't generated or dependent on labor.

I add 2 months of runway for each week I work. Not exactly a big deal.

>Often it meant I had to do double-shift days to make up the lost time.

I'm starting to develop a picture of you under-billing, if you felt obligated to do so.

>There was absolutely no "reward"

Can we just get to the part where we recognize we value different things and move on?

>As a salaried employee, I was still completely free to quit.

Except for the part where if you're the type of person to prefer working on 5, 10, or 15 different things a year as opposed to one thing for 5 years, you're penalized as an employee because you'll be seen as a job hopper. It does real palpable damage to your career as a salaried employee to quit a job.

>Being a contractor doesn't make you free or independent in any way that a salaried employee isn't.

That's plainly false.

This was always a waste of time, but now it's an expensive waste of time.

Troll somebody else who hasn't drunk your kool-aid.

> I prefer working with clients to having a boss. I prefer having customers to having a client.

To me, it was just trading one noun for another.

> I'm starting to develop a picture of you under-billing, if you felt obligated to do so.

Projects have deadlines. This isn't a matter of under-billing, it's the fact of life.

> Except for the part where if you're the type of person to prefer working on 5, 10, or 15 different things a year as opposed to one thing for 5 years, you're penalized as an employee because you'll be seen as a job hopper.

Not really. Go work for an agency that does lots of different things. I own a digital agency, and we build lots and lots of different things every week. My creatives/engineers can jump on stuff they're interested in (we actually encourage that).

If you feel like you're more "free" as a contractor, great. Personally, I found I thought that until I realized it was nonsense.

There are things that are better too.

Asserting your independence and keeping a distance is a good place to start there. Don't be another employee.

Stoicism helps.

Not until 1 Jan 2014, unfortunately.

Didn't you just say you are 24?

Your snark isn't appreciated.

And let me be clear, "founding my own company" wasn't "easier". It was infinitely harder, though ultimately more rewarding for me.

You're essentially scorning me for taking my own path towards what you did.

Baffling hypocrisy.

You know, I had a similar career path and was also contracting at 24 with several years of experience under my belt. I get what you say because I've worked freelance most of my life, and do care bout self-ownership. On the other hand, my view of what constitutes 'a long time' has shifted substantially since I was your age (I'm 42 now). In this market, I don't think you need to worry about being held hostage; maybe it's a proxy for something else that's bugging you that you haven't identified yet.

I think you've built a wonderful position for yourself, but I'd urge you to be mindful of thepotential pitfalls in the future.

I'm not too knowledgeable on the exact scenarios and how much more (if any) such people with serious medical issues would pay, but I agree with you that this is something to be cognizant of.

He thinks he's doing himself a favor and getting what he's "worth", but that doesn't seem to be the case.