Has contracting made you lose perspective on money?

[jamesbrown]

No, I only draw a fraction of the profit. The rest, money in the company, I view as freedom rather than an opportunity to buy stuff. But perhaps I've lost some perspective w/r to that freedom (I guess many are trapped in what they do)...

[ZARDOZ]

In this country on average the pay is low and the cost of living is high. People have been indoctrinated to think that because their house has been overvalued through years of bubbles they are well off. Contractors have the kind of purchase power that your equivalent permie in the US might have. Infact anecdotally a senior permie at my client could not belive UK contractors we so cheap (we were getting good rates by UK standard)

Are we lucky? I would say it's more a case of others getting more ripped off

[vetran]

Being good at something is not the same as being valuable to people. There are lots of things I'm good at which come easily to me. I work very hard to be good at something which doesn't - because thats where, in thise case, the value is created.

Physical graft is easy - animals can do it. Mindfully adding value is what distinguishes productive men from glorified animals.

And then some people are just inherently less capable. That's fine - but I won't consider myself lucky for reaping the rewards of very hard, yet mindful, work. In that situation, then it's perfectly reasonable to suggest that you are, in fact, 'so much better'. The fact of reality is that some people are worth more than others - because they are better (when it comes to addign value that people are willing to pay for).

I have an extremely capable friend who can turn his hand to almost anything yet earns < £20k.

I worked hard sure, I didn't go out on the Beers as much when I was in my teens to get my qualifications, I worked long hours in my 20's & 30's to get to a decent wage but I was lucky to select IT and with some of my Job choices.

[SpontaneousOrder]

I have an extremely capable friend who can turn his hand to almost anything yet earns < £20k.

I worked hard sure, I didn't go out on the Beers as much when I was in my teens to get my qualifications, I worked long hours in my 20's & 30's to get to a decent wage but I was lucky to select IT and with some of my Job choices.

If he can turn his hand to almost anything, then why can't he turn his hand to something that people are willing to pay for? 20k a year implies that lots of people are 'extremely capable' in his field.

[Ticktock]

My permie jobs were never great payers. I had to struggle over whether I really needed anything I was thinking of buying - I wasn't destitute by any means, but did not have any real level of disposable cash.

I always remember how lucky I am now, to be able to go to a shop and buy a coat, simply because I need a coat. I don't need to worry that, although I need a coat I can't really afford one - I just pick it up.
I don't spend much money on crap - again, I realise I'm lucky because there is nothing I really need or want. Occasionally I'll buy a new computer game. Maybe once every 18 months I'll upgrade half my computer, and do the other half at the next 18 month mark.
I avoid buying clothes unless I need them - I resent spending money just to stop other people throwing up - I still wear t-shirts I bought when I was 19 (I'm coming up 38 now), and these are just plain cheap t-shirts, or ones I got from the discount outlet in Swindon back then.

However, I am now in a position where my wife and I are in the process of trying to buy a place (waiting for vendors to find a place), which would have been impossible in my area previously, due to both saving a deposit and getting enough multiples on income.
I drive a very nice, although slightly ageing (OK, only 5 years old), car.
We took 4 holidays last year - a week in Wales, 5 days in Berlin, a week in Madeira and a week in Normandy. We used to try for a week in Wales every year and not always be able to afford it.
When my birthday / Christmas rolls around I'm at a loss if asked what I want - I'll happily take pants and socks as they're fairly cheap and at least people who insist on buying something have something to buy.

Meanwhile, my brother is permie in what would normally be a more senior role than me, works hard, spends next to nothing on himself, has massive debts and really struggles. Granted, he and his wife have 3 kids and the associated expense there, but he needs the stability that a permie job offers. If he went contracting and could find regular contracts he would be much better off, but won't take the risk.

[Zero Liability]

Being good at something is not the same as being valuable to people. There are lots of things I'm good at which come easily to me. I work very hard to be good at something which doesn't - because thats where, in thise case, the value is created.

Physical graft is easy - animals can do it. Mindfully adding value is what distinguishes productive men from glorified animals.

And then some people are just inherently less capable. That's fine - but I won't consider myself lucky for reaping the rewards of very hard, yet mindful, work. In that situation, then it's perfectly reasonable to suggest that you are, in fact, 'so much better'. The fact of reality is that some people are worth more than others - because they are better (when it comes to addign value that people are willing to pay for).

Exactly. Providing value to the consumer of your services over and above what they cost them is the key here. How hard you work to do it is incidental and at most has an effect on willingness to supply the service, which may allow you to bill more if your skillset is in low supply relative to demand. I think the focus on how 'hard' some forms of work are (which is ultimately subjective and down to individual competencies and preferences) is misplaced, and is the wrong message to send anyway; working effectively and efficiently towards the end of providing value to the consumer of your services is what matters. Perhaps watching you break a sweat may provide value in some cases, though.

[SpontaneousOrder]

I have an extremely capable friend who can turn his hand to almost anything yet earns < £20k.

I worked hard sure, I didn't go out on the Beers as much when I was in my teens to get my qualifications, I worked long hours in my 20's & 30's to get to a decent wage but I was lucky to select IT and with some of my Job choices.

For example - a good friend of mine left the Royal Marines after 8 years or so. He is a bright bloke, but only had a few average GCSEs to his name.

He trained to be a sparky of sorts - installing access control, alarms, cameras, whatever. He got a job with Chubb or something similar. He then, after a few years, started subcontracting. He earns 70k ish a year which is pretty good for a few aveerage GCSEs.

He could have trained, like another pal did when he left, to be an awsome scuba instructor. He earns alot less though - because he chose to be good at something which people value less.

[PurpleGorilla]

so I remember pretty vividly a few years back when we first moved in together and at one point had a spreadsheet where we itemised EVERY purchase and EVERY bill. I mean that literally - down to buying a chocolate bar.

Chocolate bars! That's luxury. We used to lick used stamps for our sugar fix.

Know what you mean about the spreadsheet. Tough times.

[rootsnall]

Contracting in the 90s and Y2K and having a nice gloat with your colleagues at the salaries being offered for Finance Directors in the FT

[Zero Liability]

As for the topic, the main difference for me is in controlling how you handle your company's earnings. There's a lot of budgeting involved and a lot more to think about in so doing. I am the sort of person who works off budgets irrespective of how much I bring in, though, and I quite like this control. With no permie perks like pensions, holiday pay, sick pay, ability of client to terminate at will etc, it's important to continue budgeting.