So you're interested in departing the world of employment for a single company in favor of that of an independent consultant. Are you crazy? Or simply brilliant? You need to understand what you're getting yourself into because there are some very compelling reasons to become a contractor.

Sky's the limit.

The first thing people probably think of when they think of a contractor is the big money. Well, for the most part, it's true that the base income is higher. A contractor's salary is determined by the level of sales ability he has when he takes the job in the first place. Whether this is the elusive "market" rate or something else is dependant on his skill set also of course. Most contractor's make about 50-100% more per hour than an equivalent permanent positioned employee.

Before you think it's all rosy there are a few financial and lifestyle downsides as well. You must pay for your own health care and life insurance. You get no paid vacation or sick days. When the contract is up you don't get paid. And of course there is no opportunity for growth within the client's company or stock and options awards. All this means that contractors don't really make that much more, and in some cases they actually make less. But if you are someone who can budget for a rainy day and have an entrepreneurial spirit I believe the benefits outweigh the downsides.

From cutting edge to bleeding edge.

Let's say a company has an internal application that's been around for a long time, but they're still adding features to it even though they know it isn't going to last much longer. So the plan is to build a new system that will take care of their future needs and they want to take advantage of the latest technology. Sound familiar? This has been the case for me personally at almost every one of my contracts.

They're going to need some people to continue to massage the old system and they're going to need some people to build the new system. The two pools from which to draw are the employees who have been working on the old system and contractors who are versed in the latest technology. Can you see where I'm going with this? Employees get stuck maintaining legacy systems while contractors get to play with the latest developments in software and hardware.

This is a trend I see everywhere I go. I would say in fact that if you're not willing to keep abreast of the latest technology then your days as a contractor are numbered and you'll soon be singing a corporate tune while sitting in a dark cube somewhere trying to find the logic error buried in a stack of punch cards.

There are exceptions of course. There are a lot more opportunities to use the latest technology in a smaller company, or in the R&D divisions of larger companies. The best run projects throw employees in the mix also so they can learn the new technology. It's your job then to leave them with as much knowledge as you can while hiding the fact that you just learned it the night before.

Fun and fast-paced environment.

Since most contracts are project based there is usually a well-defined schedule of when milestones in the project are to be completed. Because these schedules are usually made by managers and not developers they are almost always woefully deficient in development time, creating an atmosphere of high energy where people want to get things done. It's a lot easier to work in an environment where you accomplish something each day than it is to work in a place where doom and gloom seem to hang over everyone and everything.

Tax advantages

Aside from the workplace benefits there are a number of tax advantages to contracting*. Almost anything that can be proven to enhance your business can be a write off. This includes a computer for your home office, office supplies, postage, internet access, mileage or the cost of a vehicle, meals and entertainment of clients, travel and lodging, books and training also. While incorporating isn't necessary there are even more tax advantages you can use if you decide to go that route.

Growing your own company

When I think of the American dream I think of two things: owning your own home and owning your own company. If you want to buy a house I can't help you, but you can own your own company right now. Opportunities to grow in a corporate environment still exist and can be found, but the chance is greater that you will achieve financial independence through investing in yourself rather than in someone else's company. And there is no thrill like building your own enterprise up from nothing and seeing it thrive.

If you really like the corporate environment and you enjoy big company politics then the consulting life may not be for you. Or you may be the kind of person who enjoys lower pay and working with older technology. Or you may be the kind of person who just wants to eek by in life and put in your 40 hours a week in your dead end job that you hate. Or maybe all you can think about is the day you can retire so you can work on deepening the butt impression you've started on your couch. But if you have drive, and if you have a passion for technology and you're the kind of person who is highly motivated to be successful, what's the benefit in being a full-time big corporate employee?

Exactly.