You just don’t hear about millionaire freelancers. The big thing these days — the status we tend to aspire to — is the six-figure freelancer. There’s a big difference between earning six figures and hitting that seventh figure, but is it enough of a difference to keep freelancers out?
The short answer, at least as far as my own anecdotal experiences and annoying questions to creatives with especially lucrative practices seem to show, is that freelancers just don’t break that sort of barrier. Few enough can hit six figures, let alone keep going up.
Running the Numbers
The problem is the number of billable hours in a year, along with a ceiling for rates that freelancers hit.
Assuming that you take off two weeks a year for time off, you’ve got fifty weeks left in which you can earn a million dollars. That means you have to earn $20,000 every week without fail. (If you’re not going to take any vacation or sick leave or anything, you only need to earn $19,230.77 each week.)
Going with an expectation that you’re earning $20,000 a week simply because the math is easier, you’ve got to earn $4,000 a day, five days a week. That means an hourly rate of $500.
Oh, and I’ve very generously assumed that all the hours we work are billable — that some how we’ve created a magical marketing machine that brings us clients immediately as we’re finishing up with each project.
Who Can Charge $500 per Hour?
The simple truth is that while I know many freelancers who have broken the $300 per hour mark, I can’t think of anyone I know that actually charges $500 per hour. I’ve seen a couple of websites for freelancers who charge that much, but based on their clientele, I’m not sure that they’re really getting that rate on anything resembling a consistent basis. That fact, combined that when I ran the numbers, I was really optimistic — basically assuming 2,000 billable hours when most freelancers actually bill closer to 1,500 hours in a given year — puts that millionaire mark out of reach for us.
There just aren’t that many clients who value freelance work enough to pay $500 per hour. You might be able to make that number work if you bill per project and work both fast and well. But a lot of the clients I work with would laugh in my face if I quoted that high a rate. It takes a celebrity level of branding (or at least some internet fame) to get that number.
Just How Out of Reach is the Million Dollar Mark, Really?
There are some ways to bring it back into reach, though. But they require straying from pure freelancing: you can’t just offer your personal services on an hourly basis. You may even need to change your title from freelancer to something a little fancier.
When you can subcontract out parts of projects, you can add up more billable hours without working them yourself. When you can sell products that don’t require you to spend time with every customer, you can earn money beyond your services. It’s only when you’re limited to the number of hours in the day that you can’t make the math work.
Of course, reaching that seven figure mark will require a hell of a lot of work. But it’s not something that I believe is out of reach any more. And I’d like to think that a lot of the problems that go along with working for yourself — like figuring out health insurance — get a lot easier when you’re making that kind of bank. I’m going for it.
Image by Flickr user Michael Lehet