12 startups in 12 months, here’s my first!

Last month I decided to start spending my nights and weekends building startups, in the style of Pieter Levels. Although it is already June 3rd, I am today launching my May startup, Marginal Revolution Books! It is a website that allows you to browse every hyperlink to a book on Amazon ever posted by the blog Marginal Revolution.

My site is aimed at people like me who are superfans of Marginal Revolution. I personally subscribe to the RSS feed for the site and read through almost every post. I’ve read dozens of books I heard about from the site, and I often go back and search through the archives when I’m researching a topic that Alex and Tyler (the site creators and authors) post on.

I hope the site is useful to people like me out there, and I’d love to hear your feedback! As a once and future digital nomad, creating these kinds of passive income projects is what will enable me to become independent from jobs and consulting clients.

Online discourse

The pitchform-wielding mob attacking Paul Graham has crystallized my fear of posting writing on the internet. I know I’m not the only one who feels this way–other people have expressed the same concerns to me in face-to-face conversations.

This overwhelmingly negative atmosphere causes fewer and fewer new ideas to be expressed, and only very thick-skinned, battle-ready writers to stick it out online. We’re living in a downward spiral of simple, made-for-facebook posts, written so readers can quickly scan a piece, and share it approvingly or “hate share.” There is no spectrum of opinion: you’re either with me, or you’re a racist, you’re sexist, you’re scum who should lose your job and have your life ruined.

It’s not that people are stupid, but in this part of life they’re just lazy. The world is full of horror and injustice, while most of us are lucky just to make rent, much less change things for the better. Who has time to figure out what’s really going in a dispute? Just blame President [Bush|Obama] for everything, close facebook, and get back to work.

There are levelheaded people posting rational, thoughtful stuff, but the bombthrowers get more attention, more likes/shares/pageviews. And being targeted by a mob can have real-life consequences. So from now on I’m going to stick with writing about travel/expat stuff and tech stuff, and (unfortunately?) leave all heavily-policed topics to the pros.

Chiang Mai is the best place I’ve ever traveled to

If you know me you know that I’ve been to dozens of countries, lived abroad, and have arranged my life so I can travel as much as possible. Of all the places I’ve been, Chiang Mai is my favorite. I’m here right now, and this place is simply amazing. I’ve never been anywhere before that has everything– perfect weather, low prices, friendly, happy people, decent transportation system, reliable internet and electricity, great nightlife, I could go on. Despite all these amazing qualities, there is more to Chiang Mai than just a list of good qualities. The place just has a great vibe. I’m naturally a stressed-out guy but this place just puts me at ease. I wish everyone could come here and see what I mean.

One of the first things I noticed in Chiang Mai is that Thai people are stoked to be here. They are always smiling. This place is like if you took the Hawaiian islands and filled them with Midwesterners. Happy people in paradise. Not everyone speaks English, but I’ve met a few Thai people who lived abroad in the US or UK and we were able to have a good conversation. They realize that northern Thailand is a natural paradise, it’s not too crowded, and Thai food is a wonder of the world. Every Thai I talked to was satisfied with their station in life, which is definitely not true among my friends back home in the West. When I walk down the sidewalk, so many people say “good morning!” For the last week I’ve been going to the same soup place for lunch, and the people who work there now recognize and make jokes about whether I like spicy food. I love it.

As one expat explained to me, “in Thailand, the answer is yes.” Do you want to drink imported beers from all over the world? Head over to the expat neighborhood Nimman for a wide variety of bars to choose from. Would you like to to rent a furnished apartment with full kitchen, balcony, flatscreen TV, strong A/C, and swimming pool? For all that I’m paying $27/day, and I didn’t even negotiate the price or get a monthly rate (where you can save 40%.) You want a massage? (The real kind, nothing shady.) That’s available on every corner. Of course there’s amazing Thai food, which is legitimately one of the world’s great cuisines, but did you expect cheap food from virtually every country in Asia? I didn’t. It’s easy and cheap to get around the city, and there are uncountable excursions of every kind you can go on. And if you need some time in a big city you’re a short flight from Bangkok and Kuala Lumpur, and a slightly longer flight from Hong Kong.

You can travel around Asia very easy from here: the airport is centrally located and Air Asia flies here. (Air Asia tip for the taller folks: pay $25 for the extra legroom seats. It’s a game changer.) You can easily travel over land to Myanmar or Laos, which many Westerners do to leave Thailand for one minute in order to renew their tourist visa. And if you feel the need for the first world, there are direct flights to Singapore.

The weather is amazing every day. I go swimming in the pool in my airbnb’s apartment complex every day while looking at a beautiful mountain. That’s after reading about 12 inches of snow in Chicago.

There is a huge, huge community of people bootstrapping online businesses here. I’ve definitely met a lot more people here who are cashflow positive (or at least they claim to be and sound like they have a clue.) At other coworking spaces in Asia I’ve met more people who, I’m sad to say, I don’t think are going to make it. Here’s different. When I say you can live on $1,000/month here, I mean you will live a comfortable life, with your own nice apartment, eating delicious food at outdoor restaurants, with reliable electricity and internet access. If you are selling to the West it’s not that hard to make $1,000/month. Even if you’re American and you have to pay 40% taxes, and fly home twice a year, a $20,000/year income gives you a nice life here. Try to let that sink in.

The food is awesome, and cheap. I pay 40 or 50 Baht (USD$1 ~= 35 Baht) for a nice meal. There are so many restaurants and food stalls to choose from that it’s overwhelming. Thai food is a wonder, and other cuisines are available in abundance. If you are willing to pay 200-300 Baht you can get western meals like a hamburger and french fries, or beer imported from Belgium.

The only downside of Thailand is that they are strict about visas! Unlike Malaysia, where Americans can just show up and get 90 days, in Thailand by default you get 30 days, which you can extend for 30 more with a trip to a government office. A lot of westerners took advantage of lax enforcement in the past and now we’re all paying the price.

I’ve also heard bad stories about the smog when burning season comes around in March. During that time the advice is to head south to the shore for a few weeks, or take the chance to leave Thailand for a while so you can spend more time here when the weather is good.

In the end, my advice to anyone is to just come here. If you’re a digital nomad and need to work, check out the coworking space called Punspace in Nimman. If you’re on vacation, fly here and relax for a while, it’s a great launching point for lots of excursions. If you’re on a fixed income, come here and improve your quality of life. I’m seriously questioning everything I though I wanted out of life with respect to living in expensive western cities right now.

Got any questions about digital nomad life? Send me a message! If you don’t have my contact info just tweet at me @LinuxFan2718

What I’ve been reading 2

  1. The Quants: How a New Breed of Math Whizzes Conquered Wall Street and Nearly Destroyed It, and Dark Pools: The Rise of the Machine Traders and the Rigging of the U.S. Stock Market, both by Scott Patterson. I don’t know whether the author really understands how high-frequency trades are executed, since he never gets down to the nuts and bolts of trading. Instead, we’re treated to analogies straight from a sci-fi thesaurus: Wall Street is under attach from “a dazzling matrix” of “high-octane trading robots” etc. The book is also weighted down with speculation of people’s inner thoughts and imagined conversations. Feel free to skim the fluff.
  2. Flash Boys: Not So Fast, by Peter Kovac. The best book on high-speed trading I’ve read, since it was written by a former practitioner. Needless to say most people who can profitably trade do that instead of writing books, so we’re lucky to have his perspective. Kovac walks us step-by-step through specific trades, which is really the only way to discuss trading. Not perfect, since Kovac glosses over real concerns about trading rules, but the structure of the book is a straight rebuttal of Flash Boys, not a full defense of HFT.
  3. Trading and Exchanges, by Larry Harris. This is a manual for future trading professionals written in 2002. I found reading it at the same time as the others made them easier to understand. Be warned: this book is extremely boring and doesn’t discuss recent order types like “Hide Not Slide” that are the source of much controversy on Wall Street. Despite the high level of concentration reading this book requires, it pays off big time when reading the financial press, books, etc. No amount of analogies can replace fundamentals.
  4. A High Frequency Trader’s Apology by Chris Stucchio. Clear writing by another former practitioner (and statistician), replete with example trades. Do read the whole series, and the informed Hacker News comments.
  5. Digital Gold: Bitcoin and the Inside Story of the Misfits and Millionaires Trying to Reinvent Money, by Nathaniel Popper. The author lacks basic understanding of some fundamentals underlying the bitcoin protocol, but in this case it’s ok, since this is a human interest story about the characters involved in bitcoin’s early days. Entertaining but don’t expect accurate technical info.

What I’ve been reading

This post is modeled after Tyler Cowen’s similar posts on his blog Marginal Revolution. (Sample post). I’m a big fan of these posts because a very short, opinionated description of a book is a great way to find out whether or not I’d like to read it.

  1. The Third Coast: When Chicago Built the American Dream, by Thomas L. Dyja. A history/lamentation of Chicago from 1945-60. Very uneven. Some chapters mention so many non-famous people without any explanation that it’s like reading a phone book. Other chapters are like a good college course called “Chicago 201”, if you’re already familiar with the basic events of that time and place and subject. If you’re only reading one book about Chicago, don’t read this one. One better book is American Pharaoh, a biography of the first Mayor Daley, whom Dyja dislikes strongly but benefits from a detailed biography.
  2. A Song of Ice and Fire, by George R.R. Martin. For the second time, I read all five published books and the released chapters from Book Six, The Winds of Winter. I don’t like fantasy novels but I couldn’t stop reading this. The second read-through is very rewarding because you already know the main plot and characters and can focus on secondary events, and try to puzzle out what happens next. Enjoyed quite a bit but not inspired to read any more fantasy, although I will finish the series when new books are released.
  3. Fluent Forever, by Gabriel Wyner. Considering how many languages he speaks, it is surprising how wordy and convoluted Wyner’s writing is in his native tongue. This book doesn’t know if it’s a beginners guide to modern language study techniques or a lengthy defense of Wyner’s ideas and techniques that aren’t widely accepted. Some chapters should definitely be skimmed, not read.
  4. Imperium, by Ryszard Kapuscinski. The author is more famous for The Soccer War. As a travel writer he has no peers. He wrote in Polish, but the translations are excellent. When I read this book I’m either laughing out loud, or eagerly soaking up his stories. Would have been an amazing person to meet. This book is about his travels in the former USSR at various times in history, including 1989-91.
  5. The Martian: A Novel, by Andy Weir. Weir published this book chapter by chapter on his blog. The book is half non-fictional detailed science about a Mars mission he created for the book, half sci-fi story. The writing shines bright when writing about physics, chemistry, and other technical subjects. The hero aside, the characters feel wooden and amateurishly done, but it really doesn’t matter. This is one of the best sci-fi stories I’ve ever read.

How much does it cost to spend 30 days in Bali remote freelancing?

My living expenses for 30 days in Bali were US$1,892. (Only $34 more than the “nomad cost” of $1858 nomadlist.com lists for Ubud, Bali.) That includes:

  • $855 of ATM withdrawals. (Food, rides, tourist excursions, bar tabs, entrance visa, SIM card)
  • $35 in bank fees
  • $290 for a month of coworking at Hubud in Ubud
  • $63 for clothes appropriate to the tropics
  • $643 for lodging. (I always had my own place with en suite bathroom.)

The above total doesn’t include flights. I spent a total of $1741 on flights for this two-month trip to Asia.

  • $758 for Qatar Air from Barcelona to Bali,
  • $85 for AirAsia from Bali to Singapore
  • $898 for Air China from Singapore to NYC

I spent more money than you need to and was pretty comfortable in Bali. I ate in restaurants every day, drank beer, ate ice cream, went to cafes, went on guided excursions like a hike up Mount Batur, and rented nice places with air conditioning and a western-style en suite bathroom in convenient locations. On the other hand, you can certainly spend a lot more than I did in Bali. There are beautiful resorts there, gourmet restaurants, nightclubs, and other such things.

My digital nomad “to do” list: I need to change my bank account to get rid of foreign withdrawal fees. (I still have the same checking accout from when I was under 18 years old!) I need to get smarter about frequent flyer miles. (A hacker friend helped me jumpstart my American Airlines membership to Platinum status, I’m going to work to maintain that.) I need to pack appropriate clothes for the weather where I’m going.

My tips and warnings for a remote worker in Bali

The number one most important thing to understand about Bali is that the internet sucks there. It has slow speed, low thoroughput, and it works intermittently. My workflow was to always have my phone plugged into my laptop, and switch back and forth between wifi and the tethered phone, but there were still times when it was unusable. I was happy when the speed got above 100 KiB/s for a while. Also, when the power goes out for an entire day (which happened to my Airbnb and the entire surrounding neighborhood), it’s a little hard to get anything done. If you need reliable internet, don’t go to Bali. If you do come, get familiar with command-line tools for downloading files in such a way that the transfer can be resumed if it fails partway through. (e.g. `wget -c`)

Bali doesn’t have any public transport to speak of. By far the most popular method of transport is low-powered motor scooters. I met a lot of expats who’ve wholeheartedly embraced these scooters, personally, scooters and motorcycles are not for me. Bali intersections generally don’t have traffic lights, there is just a huge mass of scotters and a few vans gradually going past and around each other. Despite this, I never saw a single person get road rage or act impatient. Balinese people are seriously the most chill and relaxed people I’ve ever met, and I’ve visited over 25 countries on five continents. If you like the idea of riding around on a motor scooter, they are very cheap to rent and the fuel is cheap too. I prefer to walk, and the sidewalks were pretty dangerous (lots of steep, unmarked holes) and often times non-existant.

I didn’t like staying in Ubud. Ubud is a village away from the coast among the rice paddies of central Bali. I read a lot on the internet about how it was this great place for digital nomads, but I don’t agree. The city closes down at 10:30, so if you work late hours you’ll be stuck with no dinner and nowhere to have a beer at the end of the day. The sidwalks are full of dangerous holes, covered in debris from construction sites, and generally used as parking lots/places to drive on. There are few street lights, so if you’re out after dark (the sun goes down at about 7pm), you need a flashlight to avoid all of these obstacles. Ubud is a nice place if you get up early and go to bed by 10 or 11, rent a scooter, want to eat vegan meals, do yoga, and are interested in neo-hippie stuff like crystals and energy fields. Balinese entrepreneurs in Ubud are fulfilling the demand of what certain westerners think Hindu culture is, and anything authentic about what’s being sold was gone a long time ago. Having said that, I met quite a few expats who consider Ubud and the surrounding area to be paradise and have made it their permanent home.

There’s a coworking space in Ubud called Hubud that advertises reliable internet, but doesn’t deliver. I went there every day for two weeks, and they sold access to way more people than they can handle. Every day the internet goes completely down for over an hour at a time, slows to a crawl at other times, and is overall useless. As of right now, don’t go to Hubud if you need to use the internet. (They claim they’re working on the internet problem, so maybe it will be fixed by the time you get there.) It’s a great place to have lunch, meet other expats, and take an action shot of yourself with your laptop overlooking a rice paddy or sitting in a rattan swinging chair, but it’s a terrible place to get work done if you need internet access. What Hubud is awesome for is meeting people, and the price I paid to be a member was more than worth it for the conversations I had there about business, entrepreneurship, and southeast Asia. I don’t like saying negative things about a place online, especially when the founders and employees are nice, friendly people, but there’s a consensus online that Hubud is this life-changing place with no flaws and it’s just not true.

If you go to Bali, take a day trip to Ubud, see the Monkey Forest (one of the coolest places on Earth) and head back to the coast. Stay in Kuta or Seminyak, within walking distance of the water.

I love food and am a great fan of all kinds of Asian food, but Indonesian cuisine didn’t grab me. Maybe I didn’t find the good stuff. What I did find was a lot of “deep-fried meat with a scoop of rice” dishes that were pretty dull. I was also probably too adventurous with eating from food carts, because my first-world stomach couldn’t handle it sometimes. In countries where you can’t drink the water, locals will use it to wash vegetables, which they are able to eat without a problem due to a lifetime of exposure to small amounts of the microorganisms in the water. Foreigners are not able to handle it. My disappointment with Indonesian and Balinese cuisine was more than made up for by all the other Asian food that is readily available everywhere. There’s a lot of good, cheap food available in Bali.

There was only one food or beverage place that really stood out to me: a cafe called Whale & Co. It’s a meeting place for entrepreneurs, both Indonesian and foreign. I had more good conversations in that cafe than anywhere else, and the coffee is top-notch (and blessedly free of grounds). Do make the trip.

The whole “digital nomad” internet self-promotion circuit

One last thought I want to convey to anyone thinking about taking the plunge—there’s a tremendous amount of bullshit floating around the internet about this lifestyle. As the saying goes, “it’s easy to run a company that loses money.” Some of the so-called “digital nomads” I’ve met out here aren’t making money and imo never will, but their facebook is full of artfully staged “laptop on the beach” pics and rants about sheeple working in cubicles. The people out here who are making it work are focused, driven, and have a specific business plan they are executing on, which is exactly the same kind of approach that works in the US or Berlin. I’ve learned a lot about myself and what I want to do in business from talking to nomads and expats who are making money. (More later on what I’m going to do with myself professionally.)

OK! Thanks for reading, I’ve received so much support from so many people and it’s helped me a lot. Personally, I choose to interpret my tweets getting favorited and facebook likes as “I completely endorse this and you as a person!” Right now I’m sitting on the 26th floor of a Chinatown residential building in Singapore, hiding from the afternoon heat and looking forward to my next meal because the food is amazing here. More on Singapore later! And if you want my opinion on your plan to be nomadic for a while, drop me a line.

The nuts and bolts of going from a regular job to consulting

(This post is targeted at people who are pretty serious about becoming a consultant while living abroad. For most people it will bore you to tears. In addition, although I am a lawyer, this post is NOT LEGAL OR TAX ADVICE. If you take one thing from this, hire an accountant in every country where you owe tax.)

For me, the last seven weeks have been a crash course in the legal aspects of being a consultant. I’ve probably spent 100+ hours researching this stuff so maybe I can save you some time.

In March, I was a happy employee of Soundcloud in Berlin, Germany. Like most companies with employees, Soundcloud has an HR department that really takes care of you. (Although Soundcloud’s is quite a bit better than some other companies out there.) Once you’re a consultant, you just get money at random intervals, and suddenly you need to take care of a lot of stuff yourself. Here’s a few things that I’ve learned. I hope they’ll be helpful to at least one person out there making the leap. Please note, I won’t be discussing the wisdom of the various laws and regulations I’m complying with, just how to stay safe and legal.

Taxes

First, a little bit about me, so you can see how closely your situation matches mine and how applicable my experience is for you. I’m a US citizen, which means I pay income tax on all worldwide income, no matter where I am in the world. (To see where your country stands on this issue, look it up on this chart). I’m not very interested in tax avoidance, although a lot of people you meet in the world of digital nomads and perpetual travelers are very aggressive with their taxes. For 15 months from January ’14 until March ’15, I lived in Berlin, which made me a something called a “tax resident” of Germany, subjecting all of my worldwide income to German tax during that period. (Happily, Germany and the US have a double-taxation treaty, which means that I don’t have to pay tax to both countries, the tax I pay to Germany “counts” for the US. Warning: don’t try to parse these treaties on your own, check with your accountant.) I’m now on the move, and don’t intend to become a tax resident of any country in 2015. That means in 2015 I’ll pay all of my taxes to the US, since it doesn’t matter whether I live there or not, we Americans still have to pay.

If you aren’t a US or Eritrean citizen, your income earned while living outside of your country of citizenship isn’t taxed by your country. Therefore, in some situations you can live in a country without income tax, or never establish tax residency anywhere, and avoid income tax altogether. Check with your accountant. Hire an accountant!

When I started to look into paying taxes as a digital nomad, I did an Ask HN. The advice I got was loud and clear—hire an accountant in every country where you might owe tax. I asked around and got good recommendations in both countries. Germany: click here (speaks English). The US: click here. I’ve been happy with both, and in my situation for 2014 they actually needed to talk to eachother, which worked out great, and I’m thrilled that I’m 100% legal. They are responsive and both seem to know their stuff. The German fees are going to be €250-350, and the US $250-350, depending on how complicated my taxes end up being and how many forms are involved. As someone who someday hopes to be an officer of a corporation, I am fastidious about avoiding any kind of blemish on my credit or tax history. In addition, hiring accountants frees up my time for activities that advance my career or just for leisure.

A quick sidenote for Americans: In 2014 I did both remote cross-border consulting work, and ordinary work for Soundcloud. That’s why my taxes are complicated. If all you did in a given tax year was work a regular job, then by all means use Turbotax for your US taxes. Do this whether or not you owe tax to the IRS, because all Americans living abroad must file a tax return every year. This is true even if you’ve never set foot in the US, e.g. if you were born to an American parent in Canada, you are a US citizen and were at birth, and you must file a tax return every year. Ignorance of the law is no excuse, and even not knowing that you’re American is no excuse.

Americans: The biggest and most important difference for Americans receiving 1099 income instead of W2 income is that you need to pay your taxes four times a year. Yes, you don’t wait until April 15th of the following year, you have to pay taxes every three months if you’re self-employed. Ignorance of the law is no excuse, you will be fined if you pay late. To read a bit about this click here. If you pay late you will be fined and charged interest. This year, I’m having my accountant take care of all of this for me. Eventually I might be able to handle it myself, but why bother and potentially make a mistake when I can pay someone a few $100 and not worry? As a rule of thumb, you should set aside about 30% of your freelance income for taxes.

I also did some research about living in another country for an extended period of time while remote consulting for a US company. In general, if you live in a country for more than six months, or you move there with the intent to remain, then you become a tax resident, and are subject to tax in that country. However, even in high tax countries like Spain you should not rule this out immediately. For example, check out this advice for freelancers working remotely in Spain. In short, if you’re making enough money, you should hire a lawyer to create a Spanish corporation for you, which will lower your top tax rate from about 43% to about 25-30%. So if you have a dream country, really dig into their law and possibly hire someone to advise you ahead of time. Some countries want remote freelancers, check out this program for Portugal.

US State Taxes

Most states don’t try to tax you when you don’t live in them. Some do. Check if your last state of residency is on the list.

Business Expenses

You can deduct business expenses from your income for tax purposes. You need to have receipts for everything in case you get audited. I made a Libreoffice spreadsheet with columns for Date, Expense and Amount. Then I save a pdf of each receipt in the same directory with the filename prepended by [date in format year month day]_expense_name.pdf. Send the total to your accountant.

Leaving Germany

If you’re leaving Germany, get your Abmeldebestätigung as soon as possible before you leave. You need this document to cancel your contract with SuperFit and O2, and eventually to do your taxes and prove you left Germany. To get one, download this form and fill it out. (Available from this site). Then email the filled-out form to this email address. You can do this a few weeks ahead of time and save yourself some time and money.

Also don’t forget to be really sad because Berlin’s a great place and it’s sad to leave!

Form a Corporate Entity

Most American long-term consultants form a corporate entity in the US. This is either an LLC or a corporation that shields you from liability, gives you tax advantages, and makes it simpler for your clients to pay you. I haven’t formed one of my own yet, and on my current gig I’m getting all the advantages of having one without having to do anything because of how the gig is structured. (Long story.) Eventually I’ll probably form one.

I recommend you talk to your accountant about this, and hire a lawyer to form it properly. The only exception to the “hire a lawyer” rule is if you’re forming an LLC with yourself as sole owner, which might be OK to do using some “auto-LLC” site. Still, if you make a mistake doing this you can sometimes end up making a very expensive mistake. For example, if you give your shares a par value of $0.00 instead of $0.0001 when you form a Delaware C-corporation, your tax bill can be $180,000/yr. instead of $350.

Health Care

I bought a health care plan from GeoBlue for $138/month. This is a plan that does not cover you when you are in the US, but does cover you in every other country in the world. To add the US to this coverage, the price more than doubles to over $300/month. n.b. it is illegal for US citizens to go without health insurance if you spend more than 29 days in the US in a calendar year. There is a floor on the amount of health coverage you are allowed to have under Obamacare, and Geoblue will happily sell you a plan that complies with that. My current plan is to upgrade my plan when I visit the US, and downgrade when I go abroad. Will update this blog on how that goes, but Geoblue has been responsive so far, and when I asked them about this they gave me a number to call to set it up.

This is a limited health care plan. It doesn’t cover vision or dental. It does cover emergency and routine care in any country, and they have an app where I can find English-speaking, vetted doctors anywhere using geolocation. On their website when you sign up you can mix and match whatever coverage you want. Personally I don’t need vision (yet!) and will just pay a dentist to clean my teeth at some point. The plan does cover flying me back to the US in extreme cases, including death! If you’re in a third-world country and something really bad happens, they will fly you somewhere nearby like Singapore to get first-world care.

After you sign up you’ll need to send them some info about your old health care plan, which I was able to do by emailing my previous health insurance provider and asking for it. It took some back and forth, but I was covered the whole time.

In the end, buying health care on the open market was less complicated that I feared. You just do some searching, pick a company, and pay them once a month. If I’m ever a regular employee again, I’ll be much better informed regarding health care and I’ll pay more attention to what my plan covers.

Retirement

This is very US-specific advice.

I have a 401(k) from a previous employer just sitting there gaining value (it’s invested in the “high-risk” stock market option since I’m only 32 years old.) Sadly self-employed people are not eligible for 401(k)’s, but we can invest in IRA’s. I’m personally saving 5% of my income for retirement while I consult, and once I hit the minimum investment amount I’m going to invest in one of these IRA’s. Vanguard is a very well-respected company that got mentioned as good in the book A Random Walk on Wall Street, and their name came up several times when I asked around.

An advanced option is to move your 401(k) money into your IRA. I’m going to investigate that once I get this account set up.

Don’t put off retirement savings! Due to compound interest, saving in your 30’s is really huge. Seriously, Social Security won’t be enough, and people are living to be 80+ on a regular basis these days. Sock away a little money now and let it grow.

Finding Your First Client

First step: figure out what you’re looking for. Figure out what you’re great at. Then post on facebook/twitter that you’re a digital nomad now, that you’re looking for a certain kind of remote work (on-site not OK, remote only). All your friends know you’re good, but post a few sentences that they can cut&paste to people who might hire you to make it easier for them. Update your linkedin, no one will know about the cool stuff you did unless you write it out.

When I first tried to become a remote consultant, I sent out a ton of resumes. From the responses I got, I could tell that anyone who posts a remote job these days gets a lot of good resumes and has their pick of the litter. Sending out blind resumes was a dead end for me. The only good leads I got were from coder friends who weren’t looking or had too much work and thought I was good enough to hand off their potential client to me.

Remember, if you drop the ball with a potential client, the worst that will happen is you don’t get the engagement. There are other clients. Don’t undercut yourself just because you “need” work. Cheap developers aren’t valued. Also, in my experience American companies and startups pay the best. You don’t need to be a US citizen to remote freelance for a US corporation, and doing so can increase your consulting rate.

Once things get rolling with your first client, let people know that you’re a remote consultant. Then people will think of you when they need such a person. There are a lot of psychological issues to overcome with respect to charging thousands of dollars a week to do something fun like write ruby and javascript. For one, negotiating with potential clients isn’t something a lot of coders want to do. Get over it! Your fun little hobby is worth a lot of money to the right company, and even if they’re the wrong company, if their money’s green, it’s green. (Note to non-Americans: US currency is green.) If you really don’t know where to start with negotiating, I enjoyed this book about negotiating your salary. The title is cheesy, but the book is good.  The tips in there apply to consulting negotiations as well.

Budgeting

Plan on consulting about 30 weeks a year. Figure out what your weekly rate will be. Multiply those numbers and you have your hoped-for annual income. Congratulations, you just gave yourself 22 weeks a year to goof off. Eat your heart out European five weeks of minimum vacation time! (Let’s not discuss the fact that consultants aren’t eligible for unemployment.)

Increasing your weekly rate is a good and scary thing. I’m still figuring that out, but one idea I’m pursuing is declaring yourself an expert on some valued topic, and demonstrating your expertise through blog posts, conversations with other hackers, commits, talks at meetups, etc.

Student Loans

All of the loan companies I deal with are set up for one kind of person: a W2 employee with a regular paycheck. When I call them and explain what I’m doing the drone on the other end cannot compute what I’m saying. That goes double for my income-based repayment loans. Don’t even get me started on getting your income-based income classified when you aren’t paid in US dollars. All I can say about student loans is you gotta pay the beast, and when you need a break just call them up and ask them to be flexible. Student loans have been the bane of my existence for 10 years and I don’t anticipate that changing anytime soon.

Frequent Flyer Miles

This applies to everyone. For every flight you take from now on, sign up for the frequent flyer miles program for that airline. There are a few big miles collectives like Oneworld and Star Alliance, you’ll be able to merge the miles. Even if you never get status on any one airline, just signing up for the program makes you more likely to be treated well. I’ve gotten two exit row seats for free by just signing up before my flight, even when I had zero miles accrued. Seriously, if you’ve been putting it off, look into FFMs.

Conclusion

Let me know if you have any questions about becoming a remote consultant! I’d be glad if all this writing helped even one person.