
Ask HN: Achieving financial freedom through freelancing - yasbhagchandani
I am working as a full time freelancer from around 7 years now but it&#x27;s been major ups and downs in terms of income which never led me to achieve financial freedom.<p>Is there a good way to earn good amount and achieve financial freedom?
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theworld572
Financial independence comes down to simply earning as much money as you can
while spending as little as possible.

As to how to earn the most money you can, I think that depends a lot on your
personal circumstances. But if freelancing hasn't worked out for you then I
guess the other options are to get a permanent job or to start your own
business. Its impossible for me to say which one is the best option for you
though.

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sethammons
Define financial freedom. To me, that is the point where I can choose to no
longer work and retire. Some call it your FIRE number, and there is a whole
subreddit on it. I wouldn't expect that in 7 years of anything. I'd have to
pocket, after expenses, like $800k a year to achieve financial freedom in 7
years. Another interpretation of financial freedom is escaping living from
paycheck to paycheck. That can be hard, but requires that you pay yourself
first and make more than you need. Over time, you have a warchest to smooth
out bumps.

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Yvonne_McQ
I would say to achieve financial freedom, it's necessary to control your
finance. You should be responsible for all your spendings and maybe have some
special notebook to write down the incomes and spendings to understand how
much you could spend and for what. If you can't deal with your finance there
is no matter how you are working freelance or at office.

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saluki
Freelancing does seem to be feast or famine. A lot of it is your network and
happening to connect with the right person at the right time to get good
projects.

For financial freedom in freelancing you need a long run of really good
connections and projects. Even then you need to keep that pipeline
full/moving.

I think the key is finding a way to sell products/training and/or a SaaS or
productized service. You're really only going to be free when you aren't
depending on a handful of clients for your lively hood.

So I would spend 80% of your time on client projects and 20% on your own info
products, productized service/SaaS.

I'm just starting doing this myself 80/20\. It's always a challenge to keep
your own products moving forward. So hopefully setting aside 20% to really
focus on my own SaaS will allow me to get this launched in 2020.

Here's some inspiration:

DHH Startup School
[https://www.youtube.com/watch?v=0CDXJ6bMkMY](https://www.youtube.com/watch?v=0CDXJ6bMkMY)

[https://www.indiehackers.com/podcast/098-adam-wathan-of-
refa...](https://www.indiehackers.com/podcast/098-adam-wathan-of-refactoring-
ui)

[https://www.startupsfortherestofus.com/archives](https://www.startupsfortherestofus.com/archives)

[https://saas.transistor.fm/](https://saas.transistor.fm/)

I know success stories are probably few and far between but this is doable.
Having revenue coming in that isn't tied to the hours you work is a game
changer.

Right now you have to sell your time for money, but build something that earns
you money while you sleep.

Charge for hosting and maintenance, automate something valuable to your
clients. Sell info products/courses. Create a SaaS.

Check out Rob Walling's stair step approach, in startupsfortherestofus.com

Good luck in 2020.

~~~
odonnellryan
One day a week is an awesome idea. I've been trying to work on one of my
projects more often, and I think I'll start giving this a shot.

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danieka
I think freelancing can be a good way to achieve financial freedom and I'm
considering doubling down on this approach. However I think an essential
element is using geographical arbitrage. So while continue working for western
wages you move to a country with a low cost of living. If I want to work in
Europe I might consider Egypt or Morocco, or if time differences aren't a
problem, probably SE Asia. Achieving FI through work requires you to be really
thrifty, I think you should be saving 60-80% of your income to reach FI in a
reasonable timeframe. [1]

The other thing is that I think you should look at more advantageous tax
setups. Look into flag theory. With it you can reduce your tax substantially.
In Sweden, where I live, I have to pay about 50% of what I invoice in taxes.
So by not paying taxes and keeping living expenses the same I would
automatically save 50% of my income.

For me personally, I "like" paying taxes, so I probably wouldn't be looking at
the most extreme setups. What I would consider is running my business through
an Estonian company as a way to defer taxes. In Estonia the company tax is 0%
on profits you leave in the company and reinvest, on profits that you take out
as dividend the company has to pay a 20% tax. So you can say that the company
tax is deferred and instead of paying it the same year as earning the money,
you pay the tax when you take the money out of the company. I would take out
as little money as possible from the company keeping most of the money in the
company, un-taxed. Investing money pre-tax compared to post-tax makes a huge
difference on return. Once I had built up enough invested capital in the
company I would over time stop working and take out the profits from my
investments as dividend. Then I would of course have to pay taxes, but at that
point I think it's something that I can afford. So it's more of a tax
deference scheme than a tax planning scheme. Also, an Estonian company is
super easy to setup, and to many it doesn't feel as shady as BVI, Cayman or
UAE.

Of course, IANAL, and this is stuff I read on the internet from people that
may be just as misinformed as me, and which country you're a citizen of plays
a huge role. For example, for a Swede it's very important to found the
Estonian company after moving out of the country, otherwise you could have to
pay taxes to Sweden on all dividend from the Estonian company for the next 10
years, no matter where you live.

[1]
[https://networthify.com/calculator/earlyretirement?income=50...](https://networthify.com/calculator/earlyretirement?income=50000&initialBalance=0&expenses=25000&annualPct=5&withdrawalRate=4)

~~~
shinryuu
Though, even for a company you do pay taxes where you spend most of the time.
So if your main presence is in Sweden you would pay taxes in Sweden. On the
other hand, if your main presence is in estonia you would pay taxes there,
irrespective of whether it is a Estonian company or a Swedish company.

~~~
danieka
You're right that my answer is incomplete. In these matters the devil is truly
in the details. And my answer to your point is: yes, but it depends. And you
have to look up the local tax laws to see if the company could be said to have
a presence in your country of habitation. And whether that presence comes with
any taxes.

In Sweden there are specific criteria that have to be met in order for the
company's income to be taxable in Sweden. So if you don't meet those criteria
you shouldn't have a problem. Those criteria are quite narrow, so this setup
would not work in Sweden.

