All the Aggravation of Employment, Without All the Perks

Hierarchy of the Self-EmployedThis is part three of the Hierarchy of the Successfully Self-Employed series.

What’s the difference between an independent contractor and a hooker?

A hooker doesn’t get a 1099.

That was a running joke in the group of contractors I worked with in my first long-term gig.

They were a cynical and bitter lot, but they weren’t going to get to me.

After years of hustling and scrambling for work as a freelancer, having a 12-month contract with an average of 25 hours a week was sweet.

contractor pyramid
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The Semantical Goodness

Many people use the terms “freelancer,” “contractor,” and “consultant” interchangeably. There are some gray areas with all types of self-employment. But based on my experience, and the many free agent types I’ve worked with over the years, I have some specific ways I define them.

A freelancer is a single person operation working on several small projects successively, or in some cases, concurrently. They may do several projects for the same client, but typically, the work is short term.

An independent contractor is also a single person operation, but one who works on long-term projects for a single client. Contracts can range from 6 months, to a couple of years, and are usually for a specific type of work. (Contractors who work through an agency are usually employees of the agency, so don’t fit the self-employment profile.)

It may just be semantics, and not every free agent falls neatly into a category, but fits a majority of self-employed people. (If you are a specialist, or a highly paid consultant, I haven’t gotten to you yet. Stay tuned.)

A Water Cooler and a Regular Check

There are many benefits to being an independent contractor.

Some of the best contracts involve a mix of on-site and off-site work. You get to work at home and have some regular interaction with other people.

Good gigs also supply regular work, so that means regular cash-flow.

Security and social needs all in one.

The Honeymoon Is Over, Let the Servitude Begin

After about 6 months, I knew undoubtedly what the hooker joke meant.

I was writing an email to a friend about being an independent contractor and had misspelled “independent.” The top suggestion in the spell-check — “indentured.”

I had become and indentured contractor.

The work was interesting, but I was just an employee, without any benefits. I had a boss, rather than a client. I had co-workers. It was starting to look like a real job.

So I did the only thing I could.

In a meeting, I told my client he was wrong. That as a company, they were wasting time and money.

I stepped forward with my expertise, and capitalizing on the reputation I had built with them, made the leap from contractor to trusted advisor.

It was time to raise the stakes… and my rate…

Hierarchy of the Successfully Self-Employed Series


  1. This is a very interesting series that I am enjoying quite a bit.

    It is especially pertinent, because I will be finished with my MBA in a few months and I am looking to start climbing the pyramid.

    These articles are great information, but I can feel they are leading to the top of the pyramid. The Apex. I will be interested in an article on how to start at the bottom and avoid ‘your mistakes’. Where to start, what to do, and tips and tricks.

  2. Happy Rock – The thing is, with the right approach, you can jump ahead. I’ll be touching on that in the rest of the series, and plan to go into more detail in future posts.

  3. Hi Tony,

    Thanks for this series, I’m really enjoying it! I always thought I was a freelancer, but it turns out I’m a contractor who does freelance side gigs.

    I’ve been looking for ways to supplement my current contract, like looking for more small web design gigs. Your article reminded me of how annoyed I get every time I look at the gigs board on craigslist (

    “We need a beautiful website with database features, rss, secure shopping cart and podcasts, in 2 weeks, for $200.” Not a joke, unfortunately! (Or my new favorite — “do the work for free because it’s a new startup and everyone’s going to make a bazillion dollars”.)

    Thanks for the reminder to focus on a higher level!


  4. What can I do if I am working for someone as a 1099 independent contractor and they do not pay me as agreed?

  5. reading this makes me wonder if i should laugh or cry.
    It is sad that I have been working for so long but, you are never too late. I will start reading the series.

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