Asked by Anonymous
Currently 28 this year. Considering at a potential job switch from a regular full-time role to a freelance role. At my current role, I draw around $6k per month which is around 70-80k per year. It's kind of stable job with employer CPF + insurance + leave etc. As for the freelance role, potential earning is around 2 or 3 times of that for 6-9 months of work. Since it is a freelance role, downsides are 1) extra uncertainty; 2) no medical, health benefits, leaves. No sure what else to consider
Is money the only factor here?
There are a lot of things to consider -
1) how did u calculate this “potential” earnings? Is it the average pay or only the top 1% of the industry drawing this pay?
2) which role would you enjoy more? Or does it matter? Are you just doing it for the money?
If its you’re very confident of the earnings then you don’t really have to worry about the “uncertainties“.
At 150k per year you can more than cover yourself with health benefits etc. Just requires proper financial planning.
I started my career as a freelancer, took up some full-time positions in between and returned to life as a freelancer. In almost every situation, my income as a freelancer was higher. But the truth is, I never chose life as a freelancer for the money (although that was a bonus). I decided to be a freelancer for the freedom. The danger is, once you're used to that life, it becomes a little difficult to return to a full-time job because even though I eventually got a full-time offer that pays me over 2 times my freelance income, I turned it down because it wasn't what I wanted to do and exchanging my freedom on top of that is just not worth it for me.
With 2-3 times higher income, you can easily cover your own medical and insurance. Employer CPF for a $6,000 salary is only about $1,000 which is more than adequately taken care of in your $12,000-18,000 freelance income. You can continue to contribute that amount to your CPF if you choose to.
If you're worried the freelance work may just end in 6-9 months, perhaps some of the things you can consider are:
1) is the freelance gig related to what you eventually want to do or
2) is it a stepping stone to what your eventual goal is
If the above is the case, I find that it places you in a better stead. Even if you decide to return to full-time positions later, not only would the freelance work benefit you financially in the short-term, it also places you in a better position to negotiate for better salary given the experience it offers. But do note that, you'll be in a position to negotiate for better salary than what the companies want to offer and not necessarily than what you're getting as a freelancer.
I reckon you're good at what you do since someone is willing to pay you that amount for your services. Besides, if you're paid 3 times your current salary, a 9-month gig would mean you're getting 2 years worth your current salary. At 28 years old, after the 9-month gig, you're still under 30 (yet you have pocketed an amount that you would be getting if you continue work till 30 at your current job). And being under 30 means you're still very marketable. In my opinion, even if it takes you 1 year to find the next job, you're still financially ahead than if you were to stay in the current position.
However, if it is not what you see yourself doing in the long run or is unrelated to whatever you are or will be doing, are you willing to take the risk to see how this gig pans out?
Ultimately, look at what you value more in life and make decision based on that and not just the monetary aspect.
This article might help.
I use it to assess occasionally whether I should have switched to something from 9 -6 as well.
Personally I would chase down that freelance role after nailing down your insurance and emergency savings. You only live once, and you can have a good financial planner help you in those areas that you'll lack (uncertainty, benefits, etc) - especially because they experience the exact same things as you.
You could drop me a PM if you'd like some help or just to talk.