Side note: the "equity/benefits/stability of being a salaried employee" are somewhat overestimated.
1. Equity has risks associated with it that are discounted during good times but become painfully obvious when the business cycle turns. Think Google or Facebook are great companies with bright futures? You can buy their shares without having to work for them for 4 years.
2. If you're working as a high-end consultant, you will easily be earning enough to create a tailored benefits package for yourself. For instance, you can set up a self-directed 401(k) and defer up to $18,000 of your salary (2015 limit). Your business can also contribute up to 25% (or 20% if you're a sole proprietor) of its profit as a profit-sharing contribution. All told, you can stash away up to $53,000/year pre-tax in a 401(k).
3. Stability is an illusion. Most salaried employees are at-will and can be terminated at any time for any reason, or no reason at all.
By the way, any advice for salaried engineers who'd like to start consulting? Anything you wish you'd known or things you'd do differently in hindsight?
This is true, but you need to look at who they actually are. The majority of folks who become fabulously wealthy off of equity (read: owning a piece of a business) are the folks who start those businesses and manage to hold on to most or all of the equity.
Most of these businesses are obviously not in tech, but if you want to filter out non-tech companies, the power law distribution of equity-derived wealth in Silicon Valley still doesn't favor employees, even those who join companies early on.
It's basically like being paid in lottery tickets. Fine so long as the rest of your salary is enough to pay the bills, not fine if you depend on it for your retirement, and either way, some of us would prefer the well defined payout of cash.
It may seem hopeless, and indeed many other factors do make good product companies fail. But when other factors do NOT intervene, then the remaining value does depend on your execution.
Many if not most technology companies want their expertise institutionalized, especially when it comes to the most complex aspects of their business. This is where they create the most value and have the greatest opportunity to build competitive advantages. There is no incentive to outsource their high-value work to somebody who is going to be gone after a few months.
This is why companies like Google, Facebook and Apple are willing to lavish the most desirable candidates with significant cash and equity compensation.
> Also, as an engineer, I would prefer to work on a new project every couple of months.
Become a consultant. You may be able to make a lot more money, but:
1. You may find that there are no opportunities to work for the type of companies you'd like to work for because they don't hire consultants in any real volume.
2. Limiting yourself to two or three month engagements will exclude many of the lucrative opportunities, which typically demand multi-month if not years-long commitments.