Should I Continue Working As A Contractor Or Go Full-time?

Are you debating on whether to continue working as a contractor or go full-time? There are certainly pros and cons to each method.

It's been over two months since I started consulting at a financial tech startup and I've now got to make a decision to lobby for a permanent spot, stay on as a consultant if they'll have me, or return to the world of fluffy rabbits and afternoon siestas in the park.

I have learned a TON about marketing and analytics so far, and I plan to learn a ton more for the remaining time left. It really never occurred to me to promote anything with marketing dollars since Financial Samurai has been organically grown since the beginning.

But if you can spend $1 dollar on marketing and get $1.01 in return, you should continue spending until your marginal revenue meets your marginal cost. Figuring out how to maximize one's marketing dollars is the fun part.

The only thing I have to sell on my site is my severance negotiation book. Based on what I've learned, I plan to do some promotional tests and see how things go. The book's monthly revenue is a tiny portion of my total monthly revenue even though it's the only thing I sell here. Pretty neat huh? If I focus, perhaps I can grow my book's revenue to 10-20% of total revenue. We shall see.

I think this post will be insightful for anybody who has ever had to make a decision between money, time, experience, freedom, joy, and responsibility. Let me first share five positives for continuing to work either as a contractor or as a full-time employee. I'll then share the main negative and wrap the post up with some final thoughts. 

Continue Working As A Contractor Or Go Full-time

One of the reasons why I enjoy contractor at Personal Capital is because I'm given resources to put theory into practice. I think of ourselves in the marketing department as research scientists, constantly testing new ideas to see which works best. Marketing nowadays is much more analytical with constant A/B testing going on in the background. Proving a hypothesis right or wrong is a very rewarding experience.

My time at Personal Capital reminds me of my three years going to business school part-time at UC Berkeley. I was a mid-level Associate at the start of business school who still had some doubts as to what everything meant in the financial world.

Even though going to class from 9am – 6pm on a Saturday was absolutely brutal, I was able to utilize what I learned in the classroom at work. My professors acted like consultants to help me do my job better. Give me another year of working with the marketing department and I'm sure I'll develop a strong new expertise.

Helping Create Growth At Personal Capital

As a contractor, I'm helping Personal Capital grow. Nothing is more satisfying than seeing progress after dedicating a lot of hard work. Organic traffic on Daily Capital has roughly doubled over the past three month, a solid accomplishment no doubt. Seeing over 150 social shares on posts such as Career Limiting And Career Enhancing Moves is extremely gratifying.

Working on Daily Capital is like going back in time and working on Financial Samurai in 2009-2010. But given what I know now about building a significant site plus having monetary resources for content promotion, I feel like I've got a jetpack strapped to my back. There's nothing but upside for Daily Capital, and that's exactly what I like.

Working With Smart People Is Fulfilling

I'm learning something new every day largely because I'm working with smart people every day. When I was working at home for the past two years, I felt like I knew at least 90% of everything there is to know about the online content space because Financial Samurai continued to grow.

FS's growth validated my knowledge if you will. Now I'm learning from people who are designers, analytics gurus, branding experts, and serial entrepreneurs from various backgrounds. Surely some of their knowledge will rub off and make me a more well-rounded individual.

I'm outside my comfort zone at a startup because I worked at two large investment banks who employed more than 20,000 people each for 13 years. As a contractor, I have the flexibility to work with many types of people.

But the more time I spend working at a ~100 employee, Series C funded startup, the more confident I feel about my place in the organization. I enjoy surrounding myself with people who know much more than me.

Financial Reward Is Nice As A Contractor

I would be remiss to mention that earning a steady paycheck feels good. I've been struggling for so long to figure out ways to support myself with my own two hands that I almost forgot the thrill of seeing a physical check in the mail.

Because I'm living off my online and passive income streams, I dumped my entire first paycheck into funding my self-employed 401k plan (Keogh 401k).  Once that self-employed 401k plan is maxed out, I'll then use the proceeds to methodically invest in the stock market. 

I'm an over-saver and perhaps having another income stream will allow me to spend more freely. (Read The Cure For Financial Hoarding)

Besides health care and paid time off, one of the potential big benefits to working full-time is receiving stock options. It's hard to imagine receiving a lot of options given the firm is already ~100 people large, but it would be nice to gain some type of equity and watch it grow over time.

I strongly believe in the growth of Personal Capital, and I'd probably feel remorse for not owning any equity if the company gets bought or goes IPO in the future. I'll write a post dedicated to employee stock options, but for now, I'd read Stock Options or RSUs?

In 2020, Personal Capital did get acquired by Empower Media. And the stock options I bought fo $10,000 were worth $49,500 at acquisition. Not bad! I wish I had more stock!

Developing New Connections

Building a network beyond the financial services space could lead to exciting new opportunities in the future. I worked side-by-side with one prominent venture capitalist with a couple decades of experience. I'm slowly getting to know some of the C-level folks who are themselves, highly connected in the Valley.

Of course there's my team and other people at PC as well who are all quite interesting. I don't expect anything to come out of these newly formed relationships. I just think it's nice to know people whom you can turn to for help if needed.

Biggest Downside To Going Full-Time

In the debate between working as a contractor or going full-time, the biggest downside to working full-time is a severe restriction of freedom.

The desire to experience absolute freedom is the reason why I saved so much to be able to exit the corporate world in 2012. The good thing is that I know what absolute freedom feels like, so I'll never need to wonder.

Although I'm a contractor who is working about 60% more than initially agreed upon, I come and go as I please within reason. For example, I decided to leave the Redwood City Office at 4pm one day in order to miss out on the majority of rush hour to get back to San Francisco in 55 minutes instead of 1.5 hours. Nobody cares about my hours so long as I'm getting things done. If I worked full-time, I would feel bad skipping out an hour or two before everyone else.

I'm also no longer able to spend 100% of my time doing what I think is going to make the biggest difference because I'm not the CEO of the organization nor am I working in isolation. Collaboration and careful discussion is involved before almost everything is produced. I think this is the right call. It just takes time getting used to a new system.

Finally, in the fall of 2013 I spent five weeks working out of my home in Hawaii plus another six weeks traveling around the world. Clearly, being out of the office for 11 weeks is outside the scope of most companies.

But who knows, maybe I'll be given such leeway. I'm kind of tired of travel, but what I really want is to be able to spend as much time with my parents in Hawaii as possible. If they lived in North Dakota, North Dakota I'd be for five weeks during the winter. Luckily, they happen to live in one of my favorite places on Earth.

Go Full-time All-In?

I love learning about marketing, hanging out with cool people, and contributing to a product I believe in. If I can continue to work on my online endeavors while working part-time doing something I like that's highly synergistic, this seems like a good option. But working full-time with a larger compensation package and stock options also seems very enticing as well. (I do worry if I go full-time whether my writing will suffer on Financial Samurai)

It's interesting how going back to work makes you want to earn more money. When I was away from work, my main focus was on trying to live in the moment. Money was only a byproduct of the growth of my site if I stayed consistent.

Now that I've tasted what working at a startup is like, I'm finding myself wanting more. But maybe it's not so much about wanting to earn more money, but more about wanting to be compensated based on what I think I'm worth. Content is the crown jewel for many internet-based companies. Hence, surely the chief content creator should be well taken care of don't you think?

I'm lucky to be living in the epicenter of the tech/internet bonanza. I don't know of any other person in my situation who can take advantage of such opportunity. It would be a shame to completely stop working at Personal Capital altogether. I've gotten to know everybody and understanding their systems and culture. Their free financial tools are a no-brainer to help manage your own money. Meanwhile, their wealth advisory business is competing with the best of them.

Related: How To Be A Rockstar Freelancer / Contractor

Start Your Own Business AND Be A Contractor

Being a contractor or go full-time is a tough decision. I think one of the best combos is to be a business owner and do contracting work on the side.

It's been over 12 years since I started Financial Samurai. Today, I'm earning a good passive and active income stream online. I'm currently running my online business and contracting to earn extra income, learn new things and meet new people.

If you enjoy writing, creating, connecting with people online, and enjoying more freedom, see how you can set up a WordPress blog in 15 minutes with Bluehost. You get a free domain name for one year as well. You never know where the journey will take you! Check out all the income possibilities from a real personal finance blogger in this chart. It's all about establishing your platform and brand online to gain access to potentially 3 billion+ people!

Blogging For A Living Income Example: $300,000 - contractor or go full-time
A real income statement example from a blogger. Click to learn how to start your own site!

Updates On Contractor Or Full-Time

Update 2H2016: I ended up contracting for Personal Capital from November 2013 to April 2015. It was a great 1.5 years and I'm now official an Advisor to the company. They just raised $75M in new Series F funding and are set to continue growing. I highly recommend everybody sign up to manage their wealth for free if they haven't done so already. Leverage the internet to better your life!

Update 2021: I'm loving being an independent business owner. I no longer do any contracting because I'm a father of two kids. I originally wrote this post in March 2015. In retrospect, I should have tried to get more stock options at Personal Capital given it sold for 4X. At the same time, I've had a wonderful time building Financial Samurai into a top personal finance blog. If you're debating between contractor or go full-time, really make a guess at the company's upside potential.

Check out my Top Financial Products Page and subscribe to my free newsletter to help you achieve financial freedom sooner, rather than later.

About The Author

56 thoughts on “Should I Continue Working As A Contractor Or Go Full-time?”

  1. Grisell Plasencia

    I am 49 and had been retired for 4 years, I know how you feel, I had many offers and refuse to go back to work, however I have enough income from my Real Estate investment, that allow us to retired. But I’m almost 50 not like you, you still in your 30s. Take advantage and make as much money as you can while still young, and bright.

  2. I’d say do whatever you want that will be the most fulfilling over the next year or two, and re-evaluate after a year or two. It sounds like you are pretty well set financially and will never run out of money, so I’d put money as a secondary concern after personal fulfillment.

    I’d definitely be interested in working in a start up environment, at least for a while. It sounds interesting and it’s an experience many people can’t get. Knowing that you can leave whenever the engagement loses its luster is also a nice plan B.

    1. Thanks Justin. The problem is I don’t know what will be most fulfilling over the next couple years. Everything is a chance. But the realistic worst case scenario isn’t a bad one.

  3. That’s a tough decision. If you like working there and there is a chance they won’t renew the contract I would say try to get a full time gig. But on the other hand being a contractor comes with perks. I have never made the change from full time employee to freelance consultant because I like the stability that comes with having a 9 to 5. I have a retirement account and health insurance. I know a lot of people preach about working for yourself but I’m not sure I could sleep well at night if I didn’t have a job to wake up and go to in the morning. I guess I’m just chicken.

    1. It’s not an easy decision indeed. It does take some guts to go out on your own. But I’ve gone full-circle: worked 13 years, went out on my own for two years, got a little bored, now contracting for 2 months, and here I am wondering what to do. I’ve built up my passive income streams so this is a decision of the heart.

      If I were you, I’d just do both if possible.

  4. Sam, the math is that a contract should make roughly 50% more than what you would expect as a full-time employee for incomes up to around $200,000 due to lack of benefits, etc.

    Something to think about.

  5. I was in a similar situation (minus the FI) working as a contractor when the company wanted me to convert. Ultimately it boiled down to:

    1) will being FTR allow me to accomplish more of what I wanted? – Yes (it was a new group I had the big chance to shape and they weren’t extending contracts past 2 years)

    Note that many HR departments in CA (probably entire US) still don’t like long term contractors (requires a VP signature at my company).

    If you go FTR then go part time 20-32 hr/week. You can always work more on the option of comp time (and 5 week vacations).

  6. No Nonsense Landlord

    I was an IT consultant for about 6 years. It allowed me to accumulate enough to start investing in RE.

    If you like the people, go for it. Make sure the money is there. If they really want you, they will make an offer. Look for signs they might not renew the contract, then ask for a job.

  7. Everything depends on your long term objective! Is this experience enhanced by working full time? Is the full time position different from your current position? Are you just adding hours and earn more money? Is that the objective? Will a few years of this experience help your long range goal. What do you ultimately want to do?

  8. How strange… You post this and then BAM there is suddenly this mystery potential opportunity floating in the air around me. I don’t know much right now. It could be nothing, it could be exploration into if I have the energy to deal with the chaos of a start up at this point in my career, or it could be to do some consulting on the side.

    I will find out more over lunch tomorrow but I am certainly intrigued.

  9. Can’t forget that a W-2 definitely helps when it comes to making the most of your assets. It’s a put option with no expiration, and that definitely has value for your passive income.

  10. Lots of great comments here. I like the WOOT approach. The great thing is none of your choices are bad. That’s a nice position to be in! Though I can tell this is a very difficult decision that you’re trying to make. Soak in all the feedback then update your pros/cons list, and trust your gut. It’s gotten you to where you are today so you’re making the right decisions!

  11. On an unrelated note have I just discovered that you are Sam the “Samuri” wow that is mind blowing genius :) ha.

    Anyway back on topic, love the post man, it’s refreshing to see something think through things logically, personally if I had the choice in my position I would pull up stumps and work on your blog however I feel we’re at different stages in life (I’m young and really looking to reach FI ASAP, call me a typical Gen Y’r).

    Very interesting stuff it sounds like you’re learning, shame you aren’t an Aussie plus I also may not have the experience, I’d pass you my resume, your position sounds awesome :)



    (the Career Crusader)

    1. I still have never been to Australia even though I lived in Malaysia for four years growing up. One day I’ll make it over for the Aussie open and so a tour!

      Impressed you are seeking FI so early.

  12. Remaining flexible seems to be the general consensus and I don’t disagree. Sure, the extra money is tempting, but you’ve clearly established your own businesses enough that this likely won’t be the deciding factor for you. It sounds like you’re going to be happy either way, but one option will make you happier.

  13. Recently I became a contractor after decades as an employee. As it was, a contractor position was the only opening at a company I wanted to work at, at least for a while. So here’s my thoughts.

    It is easy to get jealous of regular employees’ benefits, and equity, 401k matching, etc. But as I am being paid by the hour, I leave at 5:00 pm on the dot, unless there are other arrangements. [And if I am asked to stay late, the clock is always running.] It’s great to get out of the office when the sun is still shining. The regular employees stay late. I love the freedom to leave on my time.

    Yes there are tax ramifications. Like more tax I need to pay myself. But being self-employed, I can deduct various expenses, especially all my health insurance premiums. And while I get no employer matching funds, the limit on my retirement plan deductions (at least for a self-directed Keogh [profit sharing plan]) is much higher than the 401k limit.

    I found myself seeing how valuable my time is. When I need to go to the dentist during business hours, that is time I am not getting paid. (When I was an employee, my salary was never docked for coming in late for things like that.) Of course, not only am I not being paid for the time I get to go to the dentist, I need to also pay the dentist! And I sit there calculating how much I am money I am losing getting my teeth worked on. Oh well, it’s a necessity…

    The company I am working for has mentioned that (when the contract is over) they might want to bring me on full-time. I go back and forth in my mind about whether I want to do that, now that I’ve tasted freedom. Of course, one of major factors is the salary they would offer. Or if I stay as a contractor, I will just raise my hourly rate.

    Since I do not feel I “need” to hold onto this or any job for dear life, I have emotional freedom. And being a contractor I have other freedoms: like knowing who and what I am working for (me, and my goals).

    So while regular employees have many things, which I too had when I was in that boat, I have been pretty happy in my recent contractor life. Don’t ask me which I will choose when the time comes to choose, assuming they offer, because at this stage I don’t know. But being contractor keeps on looking better and better.


    1. Sounds like you and I are in A similar boat.

      I can empathize on your going to the dentist situation as I’ve been thinking about something similar with going for travel.

      The funny thing is, I didn’t care about not making money in 2012 and 2013 when I did travel. So why am I starting to care now? So weird.

  14. My only concern if I were in your position (a great one to be in) is that if you start working full time you may start to resent it. You’ve gotten used to coming and going as you please for 2 years now, I think that would be pretty hard to give up just for some extra cash and stock options you clearly don’t need so why give up your freedom for that?

    I think part of the reason you are enjoying your job is because of the flexibility you currently have. You clearly don’t need the money but it seems like you enjoy the challenge your current position gives.

  15. As my buddy Nate would say, there’s an easy answer to this:

    1) Pull out a coin
    2) Make one option heads, the other tails
    3) Hold the coin in your hand for a minute, visualizing the two options on either side
    4) Take a deep breath, and toss the coin into the air.

    Whichever side you’re *hoping* it lands on is the answer. No need to even look at what it lands on ;)

  16. Seems like you’re making your choice given your snarky ‘fluffy rabbits’ comment at the beginning of your post about not returning to work. Yawn.

  17. Hi Sam,

    I remember when you were contemplating joining up on a part-time basis and, even back then, I suspected that the time you spent there would expand quickly. It’s the nature of startups to ratchet things up like this.

    I’d advise to stick with being a contractor but it sounds like you’re leaning heavily to full-time. Just make sure that you’re getting paid significantly more for your increased time and get everything in writing.

    This post is a little scary for me to read since it seems really hard to stay retired.

    Good luck!

    1. Jason, I think it may be very well impossible for an early retiree to stay retired because it takes A LOT of motivation and discipline to get to early retirement. So once you’re there, you’re always thinking “what’s next.” You’re always looking for the next challenge. I don’t really know when someone who retires early will ever be able to take it easy and read books all day. I tried in year two (2013), but started to get antsy again.

      1. I think we just need a term for this second stage or perhaps third stage employment scenario. How about the WOOT (Working On Own Terms) factor?

  18. Remain a contractor and over deliver. Make them make you an offer you can’t refuse. A vesting schedule would be a significant deterrent to you walking on them.

  19. Done by Forty

    It’s a good problem to have, Sam! I generally think that the decision to leave should be more or less certain before pulling the trigger. Freedom will be there whenever you want it, but the opportunity to work in this particular setting might not.

  20. The ultimate truth here is that we are ALL contractors, even those of us hired in to a full time position. One thing I realized many years ago is that even though I don’t have a fancy title and my own business I am the CEO, CFO, and COO of ME, Inc. I have just chosen to attach myself to one client full-time with an open-ended contract that either of us can choose to end at will.

    It feels like you have an opportunity to have your cake and eat it too here. You know what freedom feels like and you have the ability to go back to that at any time you want. It also seems like you feel that you have the opportunity to contribute to something and personally grow in the process. I call that the game of win-win and that is personally how I like to play :)

    In your situation I would probably choose to go full time if I could or stay on as a contractor long term if that was another option. You still have a while to go to hit your long-term personal financial goals and this is essentially guaranteed free money that barely, if at all, impacts on your ability to continue to manage and grow your own next egg. It sounds like a great opportunity in the air.

      1. I like this perspective.

        I will add, more importantly than a steady paycheck, which you like but don’t really need, I think you should negotiate hard on equity/stock options. Isn’t that the point of working for an early stage technology company? It’s a great opportunity to risk a little time doing something you enjoy for a huge upside. Good luck!

  21. The First Million is the Hardest

    I would probably continue as a contractor. It seems like the best of both worlds.

    The points about having a steady paycheck, possible stock options etc… seem to relate back to your “one more year” post. The money & benefits weren’t a good enough reason to keep you from leaving the corporate world the first time around! I think you should go back full time if you can see yourself staying there and staying interested for an extended period of time. Or maybe at least wait until the excitement of the new challenge wears off to make the decision. There’s a big difference between working there as a contractor because you WANT to be there, and working as a full time employee who HAS to be there.

    1. I agree. Honestly if I didn’t HAVE to work and I could be a contractor, I’d enjoy it a lot more.

      1. I had a theory before I started and that was, “Work would be so much more enjoyable if you didn’t have to work.”

        I think I can answer that theory now, but I’d like to make a post of it. The preliminary hint is that my theory needs adjusting.

  22. Mr. Utopia @ Personal Finance Utopia

    My 2 cents (and it’s probably not even worth that much!):

    *I only have very limited exposure, but working at small start-ups is so way different than working for a huge, bureaucratic company. The former provides a sense of excitement. You can see the growth. You feel like you’re making a difference and there’s tangible evidence of it. The latter can very easily make you feel trapped (like a corporate slave) and wondering how and if you’re really making that much of a difference. The opportunity for intrinsic reward is usually very low.

    *You’re at a different place – in a different situation – than most other people. Most people work because we have to do it. We have to put food on the table and pay the bills. If you continued on at Personal Capital, whether it be as a contractor or full-time, you’d have the luxury of always knowing you could leave at any time if it turned out to be too much or not what you envisioned. Knowing you have that “card to play” would be pretty liberating.

    *Deep down I’ll bet you already know what you want to do…you’ve just got to convince yourself :-)

    1. It’s a loooooong way to go down to find out what I really want to do at the moment, partly because I don’t clearly know my options. Maybe I will in the next couple of weeks. I’ve enjoyed autonomy for a while now, even during my days on Wall Street b/c I was senior and managed my own little business on the West Coast. Adjustment takes time.

  23. Looks like you’re stuck between a rock and a hard place. But the good versions of both. If I was in your situation I would try to stay consulting part time and learn as much as you possibly can. Afternoon siestas sound way to good.

  24. Whichever you choose, remember that nothing has to be forever. Don’t be afraid of going full time, because if you hate it, you are financially free. You can quit. You can negotiate going back to consultant status. You are free to change your mind. You aren’t locked in to you decisions forever, just as you found that you weren’t locked in to NOT working. You were able to find this gig and pursue it.

    So, I would say, make the choice that feels right for you and if it ISN’T right, make a different choice.

    1. Thank you Dave. I think you make a killer point. I deleted some of my post last night about time commitment, but now that you bring it up, I’d like to address it.

      Whatever I do, I go in the mindset with a FIVE YEAR time horizon. Financial Samurai is an example where I finally said “let’s go” given I was ready to make a five year commitment, which is coming due this summer 2014!

      If I’m not willing to commit five years of my time, I tend to shy away from things. But perhaps I’m living in the past and the new time horizon is really more like three years given how transient so many people are nowadays.

      1. How about a full time contract for 3-6 months? You could pour full time effort into PC for a while, while knowing every month that you’d be done in the summer. Even long hours don’t seem bad when you know there’s an end coming up soon.

        1. Feels like it’s “kicking the can down the road” as they say with politics.

          I tend to be an all or nothing type of person. But, I think I need to renegotiate if I’m still working as a contractor due to working more hours than originally discussed.

  25. This is a tough decision, but I learned a lot from my friend who quit the corporate world to come work with me in real estate. He was very valuable and did not know how valuable until he told his company he was quitting. They offered him double his salary to stay and a ton of other incentives, but freedom and working for something greater then a few promotions was more important to him.

    My thoughts are to try to combine both worlds. If they are having you work more they obviously think you are valuable. Going full time takes away your freedom and gives them the power. I would ask them if you can get more perks that a full time person but stay a contractor. That may be tricky with labor laws, but I would think you could try to negotiate some more money, maybe profit sharing, but stay a contractor with a long contract in place?

    1. I support this. Why not ask if you can split your current comp to include some equity, even if it’s technically lower comp at today’s fair value. You do believe in the future, right? Maybe you can trade your work for equity and it will make working even more fun!

  26. Wall Street Playboys

    Based on our limited interactions with you and reading a ton of your blog it seems like the answer is to remain flexible.

    Think about it like this, the main reason you hated working was because of the “forced schedule” since you’re talented enough to get the job they should be okay with you being “mature” enough to handle working on your own time schedule.

    Based on the quality of writing here and the amount of time you spend on the blog it is not surprising that you are looking for more things to do. Your mind is on overdrive so you’re looking for other things to do with your massive amount of free time.


    Is that worth your freedom? We would guess that your happiness increases more when you grow your blog + personal business. So why would you let that die compared to going all in with a company.

    By working part time:
    1) you get revenue synergies (use knowledge from job to obtain info to grow blog)
    2) you get cost synergies (you won’t have “fixed” costs ie: forced to commute etc.
    3) diversified portfolio (your income will come from multiple sources and this blog won’t suffer)
    4) stable home life (no doubt you’ll be a great dad, although intense ;) and doubt that you’ll want to watch them grow up from your office… Away from home).

    Try to sell them on you working from home and simply grind for a few months proving your worth and they will unlikely care. After all it is a business and business is about results!

    Anyway that’s out 2c.

    Finally based on the comment you left on our blog… “Yahoo was the name?”

    1. Because freedom is “priceless” nothing can really compare. However, it’s good to have some sort of balance to continue to diversify. I’m a big fan of multiple income streams, and this would be a very good one. I think the biggest upside is that I’m learning new things in digital marketing that I didn’t know before. I think education is so valuable. If we stop learning, I think we really start going into a funk.

  27. Ngoc Nguyen

    To me, freedom, is the ability to live a meaningful life.

    I think you are ready to go back not necessarily because of the money nor the pros and cons. The new experience is giving you additional meaning that your current lifestyle lacks.

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