I'm a VB developer that recently started doing consultant work on the side. I'm specializing in an area that's not in conflict with my current employer. My question is, at what point should I consider striking out totally on my own? I've heard when I can duplicate my current salary for at least 6 months, what's your opinion?
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That's not an easy question to answer. The answer depends on a lot of variables and your expectations.
For instance, are you hoping to 'net' the same amount of money on your own as you are with your current employer? Let's assume that's the case.
If it is, as an independent consultant, you'll need to gross about a third more to equal the same net salary as you have with an employer. For instance, if you currently make $40,000 per year, you'll need to make about $60,000 as an independent consultant to equal the same net. As an independent, you'll pay both the employer and employee share of Social Security Taxes. And if your employer currently kicks in a share of your 401K, you'll need to do that also. Plus, you'll no longer have employer provided health benefits, vacation time, sick pay, etc.
You say you are doing work on the side? If you find you are making 50% of your salary on the side (not unheard of), that's the time to seriously consider going out on your own.
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