A Little Housekeeping pt 2

I wrote a post in January analysing my earnings progress through 2015. I said I would come back and update my progress. We're halfway through 2016 now so how am I getting on?

In January I totalled up all of the money I earned and all of the hours I worked to produce this wonderful chart:

This chart shows clear progress throughout the year but I seem to have plateaued at the back end.

I wrote a post a little while ago about my plans to invest in myself and my career as a freelancer, you can read it here. The main point was that I planned to become an Infusionsoft Certified Partner.

I completed my certification in January this year. It wasn't cheap and it wasn't a walk in the park but I passed. I can now call myself an ICP, which is shorter than Infusionsoft Certified Partner but unfortunately looks to some people like an abbreviation for Insane Clown Posse. If you've heard of the ICP (clowns, not software) then you'll know why that is a problem. If not, treat yourself to some idiocy here.

During 2015 I became more and more involved in Infusionsoft. I saw the potential for higher earnings if I became qualified so I bit the bullet and took the course. How did that work out for me? Did it help me break through that plateau at the end of 2015? Take a look at the chart below:

Yeah baby! The chart is heading in the right direction. You can see a summary of the key details in this table:

	2015	2016
Average hourly rate	$23	$36
Highest hourly rate	$32	$46

My average rate for the year to date is $36/hr so I'm consistently beating my best rate from last year. It's great to see that my investment in the Infusionsoft certification has lead to me securing higher paying contracts. To be honest, I am very pleased with my continued progress. However, I want to share another chart with you.

I have been tracking my total monthly earnings as well as my hourly rate and this tells an interesting story. I have spoken before about the variability that comes with being a freelancer and you can see the facts of the matter clearly in this chart:

Although my hourly rate has been slowly climbing, my total monthly earnings have been up and down like a yo-yo. Thankfully for me the amount has never dropped to a level that I can't live on. Essentially, a bad month is OK and a good month is awesome!

What all this means is that I actually work less hours to earn the same amount. Now, that's a nice situation to be in but what if I could manage a consistent number of hours each month? Then my total earnings would be increasing in line with my hourly rate. How cool would that be?

Not all of this is within my control. I have regular clients that provide a lot of work one month and not so much the next. However, I cannot wash my hands of all responsibility. If I was out there hustling every day for new clients then I would probably have that consistent level of work.

The fact that I am earning enough to live the lifestyle I want makes me kind of lazy about getting out there and hunting for clients. On the other hand, it does allow me time to focus on other side projects, one of which is nearly complete.

I think the lesson to take away is that my goal for the next 6 months should be to get a consistent amount of work. My side project is part of my plans to address that. I'll do another review at the end of the year to see if it was successful.

Do you have any thoughts on this? I'd love to hear them, drop me a line.

Brexit for Freelancers

If you, like me, are a UK citizen then the past week or so has been very interesting. You know, in the manner of the old curse; may you live in interesting times. I voted to remain and that put me in the (slight) minority. If you are a UK freelancer / remote worker who likes to travel then this has been a nerve wracking time. Here are a few of my thoughts on Brexit for freelancers.

Travel

For me, the number one issue is what will happen to my ability to travel. At the moment a British passport is amazing, it gets you in pretty much anywhere with limited hassle. On top of that is the right to move and live freely within the EU. Agi and I recently left Thailand and decided to try Europe for a while. Great timing!

What does the future look like? At the moment no one knows, which is a real bummer. In all likelihood nothing will change for the next 2 years at least. After that? I honestly don't believe British citizens will suddenly need visas to enter Europe. I expect we will retain the right to free movement and probably free residence.

If you can, now is a great time to get an Irish passport. Ireland is staying in the EU for sure so if you want to stay then that's a good option for you. My family are Irish but several generations back so it's not an option for me :( My mum is Scottish though so maybe Scotland can withdraw from the UK, rejoin the EU and offer Scottish passports. It's possible!

(Actually, Agi and I are getting married next year so I'm hoping I can ride the coattails of her Polish passport as a spouse.)

Money

Since the announcement of the referendum result the UK pound dropped to a 7 year low. Now, if you get paid in US dollars (which most Upwork users do) and live in the UK this is actually great news. Suddenly your dollars get you a lot more pounds, hooray!

If you live elsewhere and still use a UK bank account then now is a great time to get a bank account wherever you are. This is good advice anyway because withdrawing money from a UK bank account overseas incurs charges. It becomes especially good advice now as your pounds are worth so much less. Get a Polish, Argentinian, Thai or whatever bank account and transfer your money from Upwork, Paypal, wherever directly into it.

If you're constantly travelling then there's not a lot you can do. I know, I have travelled extensively and I wept when I looked at the ATM charges afterwards.

In the long run the pound will probably bounce back but it is worth it to take some action now.

Just a few thoughts on the situation for UK freelancers. Do you have any tips? Please let me know.

Freelance Money Management

I have been freelancing for a while now and things are going well. I thought I would share some thoughts I had recently about ways to manage your money and make life easier as a freelancer.

When I first started as a freelancer I was working for very low hourly rates just to get started. You can read the full story here. When there was a quiet week that just meant I couldn't save anything or, worse, I had to dip into my savings to get through. Over time my rate increased (see my post about this here) and I was able to start saving more. Despite this I am still quite careful with my money; some may say stingy!

I do worry about what would happen if the clients I have suddenly disappeared. This has happened in the past, clients get busy themselves and don't have time to delegate work to me. They still want to work with me, they just don't have any spare time. There's nothing you can do in this situation, no work = no money.

Agi and I love to travel and I talk about it on this blog. We don't do things on a shoestring because we aren't as young as we once were! That makes me sound really old but it's true. We don't enjoy sleeping in dorms or travelling for hours and hours in cramped buses. However, we try to make sensible choices about how to spend our money.

Transport on the road offers a plethora of options. I mentioned we don't like buses very much but sometimes they are the only option other than an expensive plane. My preferred option? Take the train if possible. I love train travel. It's cheap, you aren't trapped in your seat and you can see the countryside. Also, if you can get an overnight train then that saves paying for one night's accommodation. We recently travelled from Chiang Mai to Bangkok. Air Asia offer cheap flights but the train was still half the price. I used my phone as a mobile data point and we even did some work on the way.

Food is another big one. I don't know about you but I tend to eat at least daily. When you're in a strange place it can be tempting to always eat in restaurants. If you're in South East Asia or somewhere similar then restaurants are really cheap but you can still save money. I love eating out but when you go out for breakfast it is very tempting to have a bacon sandwich or something similar. This takes up valuable working time and adds to your waistline! Agi and I always try to buy some muesli from a shop. We keep it in our room, borrow bowls from the kitchen and have a quick, cheap breakfast. This helps maintain a routine, prevent overeating and save money.

These are a couple of the things we do to save cash for the lean times. We love the freelancing lifestyle and want it to continue. I would hate to be forced to find a job because I spent too much! Get in touch if you have any good money saving ideas.

Freelancing Frustrations

Have you ever worked a freelance job and then had trouble getting paid by your client? It happens. There is a bill going before New York City council at the moment to help freelancers get paid. That's great but not much help if you don't live in New York. What can you do if you have trouble getting your invoices paid?

I have been following this story about the potential new legislation in New York for a while. You can read the full details of the bill here if that's the kind of thing you're into. I'm a full time freelancer so obviously I approve of anything that makes freelancing more viable. According to a report from the Freelancer's Union 71% of freelancers have reported trouble collecting payment at some point during their career. The report is heavily skewed towards the US market but I think it is representative of global trends.

We here at no9to5 have had our own problems with getting payment. For the most part this has simply been clients needing a little reminder to pay their invoices. Most of our clients are small businesses who are always busy. Paying invoices is something that tends to slip down their priority list unless reminded. This is one reason that finding clients through Upwork is great. Upwork does take 10% but all payments are automatically debited from the client's account and paid to you. 10% is not too much to never have to chase anyone up.

There was one time in particular which I wanted to talk about. Back in the early days of our freelancing career Agi found a client through freelancer.com. The client wanted her to do some web research. To make this especially interesting the client produced a sex toy. They wanted Agi to research as many shops, magazines and websites as possible that they could potentially advertise in or sell to. Only the most committed and energetic of perverts could compete with Agi's web browsing history during that job!

When the job was complete Agi submitted her spreadsheet of research; the "filth sheet" as we affectionately named it. There was no acknowledgement. We waited a few days and sent a message asking for feedback and payment. We received a reply saying it was fine and payment would follow shortly. Nothing. There was no response for 2 months.

It wasn't a huge amount of money so we weren't aggressively pursuing it but after we had sent a number of requests for payment we decided to raise a dispute ticket through Freelancer. This allows you to state your case and gives the client a number of days to respond. The dispute prompted a response from the client who apologised saying that the person who we had been dealing with had "left the business". That may or may not be true, we'll never know but they did finally pay up.

So what lessons can be learned?

1. Whether you like them or not, the freelancing brokers like Upwork, Peopleperhour, Freelancer etc provide a way to dispute problems. They do cost some money but that's the price you pay for security.
2. If you have an issue with non payment don't give up. In our experience we have always received our money eventually. Make sure to keep pestering the client. You shouldn't have to but... life isn't fair.

Until laws similar to the one in New York are enacted everywhere these are pretty much your only options apart from taking your client to court.

To end on a positive note, our freelancer friends and us don't have any horror stories to share. Generally, we do our work and we get paid for it. If you are sensible with who you take as a client and avoid anyone you have reservations about you should be fine. Have you had problems getting paid? We'd love to hear your stories.

A Little Housekeeping

In case you hadn't noticed, 2016 is now in full swing so this seems an appropriate time for a little 2015 housekeeping. I recently attended a small business owner's workshop with one of my clients and read this article. Both of these got me thinking about "knowing your numbers". As a small business owner or freelancer you are often so involved in doing what you do that you don't look back and understand how you performed. If you don't know how you did, how can you know if you're improving?

The article in particular is valuable for freelancers; it helps you to work out what 1 hour of your time is really worth. Obviously this is worth knowing when bidding on client jobs but another benefit that I hadn't thought about before is using this information to make other decisions in your life. To take an example from the article:

Should you buy the nonstop flight and save two hours or get the flight with a stopover and save $90?

Being the cheap ass that I am I would usually save the $90 and spend 2 hours reading. This article made me think about things differently; if 2 hours of your time is worth more then $90 then this is not a cost effective strategy:

If you know your time is worth $80 per hour, then you should always buy the direct flight that saves you two hours even if it costs $150 more than the flight with a stopover.

There is a counter argument that you might not always have work to do, don't mind reading for 2 hours and would like to keep the $150. That is all true but it still got me thinking about how much my time is worth and how I performed in 2015.

Agi and I started freelancing in 2014 so 2015 was our first full year as freelancers. We learned a lot during the year, lost clients, found new ones and kept trying to earn higher rates.

I spent a couple of hours pulling together all of the data I had on my earnings and hours worked last year. I put all of the info into a spreadsheet (I love a good spreadsheet). The result? My average hourly rate for 2015 was $23/hour.

That was a bit lower than I expected but as I discussed in my post about How We Started Freelancing I had to start at a low rate to get my foot in the door. With that in mind I decided to look at how my hourly rate had changed throughout the year:

That's better! So, at the end of the year 1 hour of my time is worth around $32. That's good and I'm happy with that but even more important to me is that I want to keep getting better so check out the trendline:

I'm even more pleased with this trend but how am I going to continue it into 2016? I wrote a post recently about my thoughts on how to keep that improvement going through investment in yourself. I will keep this chart updated throughout the year and let you know how the trend progresses.

Have you done any self assessment like this? What did you find? Get in touch and let me know, I'd love to hear your thoughts.