Why Comparing Freelance Income to Your Corporate Salary Could Keep You From Earning MORE and What You Need to Be Observing Instead [ Freelancing to Financial Freedom ]
Are the freelance income statistics you’ve been using to plan your future actually making you underestimate what’s possible?
If you’ve ever searched for stats on freelancers and felt discouraged by the numbers, this episode will help you put that into perspective. Instead of letting broad, misleading statistics determine what you think you can earn, you’ll learn to focus on the business you actually want to build: your ideal income, workload, flexibility, and definition of success.
By the end of this episode, you will:
Understand why freelance income statistics can be misleading so you don’t let industry averages limit your earning potential.
Learn how to STOP comparing your business to other freelancers so you can focus on the goals and progress that actually matter to you.
Discover how to reverse-engineer your business around your desired income and working hours so you can build a freelance career that supports the life you want.
Play the episode now to stop letting inaccurate freelance statistics put a ceiling on your ambitions and start seeing what your business could actually make possible.
TRANSCRIPTSBy the end of this episode, you're going to find out why you should be ignoring these freelance stats, because they're just gonna bum you out, why you need to be thinking about how to build your business, not the income, and why the stats are so misleading. Welcome back to the show. I was at a networking event, about a month ago. It's highly recommended. It's the Monthly Speed Networking with Justine Beauregard. I'm gonna put the link in the show notes. It's amazing, and it was really good. She had these prompts that help you really figure out how to market your business properly, etc. Again, highly recommend it. But in that one of the breakout rooms, I was talking to people, and you know, there were two VAs there, and I have such a soft spot for VAs, because I obviously tried to be a VA when I was starting out, and I think, honestly, if you look at my fractional EA, career, it would probably fall under VA, even though I don't label myself as a VA anymore, because I think a lot of people think VAs are $20 an hour, and that's part of my selling and how I distinguish myself differently. But I was talking to them, and you know, they were new to the freelancing game, and I talked to them about how, you know, to ignore freelance stats that are out there. Because I remember when I started out, and I was like, how much does an average freelance copywriter make? How much does an average social media marketer make? How much does an average VA make? All these stats were saying anywhere, like, $40,000 to $60,000 a year. And I thought, I'm never gonna be able to quit my corporate job. That's not enough. I can't make that. Should I just be happy with it as a side hustle? And then… As time went on, I earned more than that average. And I really think If you're the type of person that likes to look up these stats and find averages and just get a basic idea before you jump into something. I really want to encourage you not to, because the freelancer stats are not something that are at all indicative of what you can make and what you want to do with your business, right? First thing, right off the bat, freelancer is way too broad of a category. So if you research anything about, like, the average freelancer. A copywriter, fractional CFO, graphic designer, virtual assistant, software developer, consultant. Technically, we're all freelancers, alright? So the earning potential clients, business models, those are all wildly different depending on what kind of freelancer you are, right? Current published freelance income figures, which is, I think, what Upwork called it when I was looking up this episode, they vary, totally, depending on, you know, the skilled… the skills of the worker, the side hustlers, the full-time freelancers, like, there's just too many out there, so the first thing you want to do is just scratch researching anything about freelancer, okay? Secondly, the average freelancer, right, is probably not building a business you're trying to build. Everyone who freelances, the wonderful thing about it is that we get to control our lives and our schedules, and we're all building something way different. Like someone charging $25 an hour is probably getting lumped into the same stats as someone selling $5,000 monthly retainers, right? So if your goal is to specialize and package your services and charge based on value, which is what I teach, and you want to intentionally build something very highly profitable. An industry-wide average that you'll find out there tells you very little about what's possible for your business, okay? On that note, averages are so misleading, alright? Like, freelancing and self-employment out there, like, the income is so uneven. Like, people earn amounts all over the spectrum, and this is kind of what I was trying to say in the networking breakout group, right? Like, there's a small number of very high earners that can pull an average of, like, just by themselves, $150, $200, $250K plus, right? Then there are agencies, right, who pull in, like, a million to 2 million, but they might only take home a salary of, like, $120,000 a year. But they would still probably call themselves a freelancer, right? So like, median income is way more useful than averages. Beats me how to find a median income, though. Like, I've done some searching. It's not readily available. Average is way more easier for companies to take, right? But if you're able to get nitty-gritty, and maybe talk to a bunch of different people, get a median income, because that will be more indicative than an average, okay? Another thing, and we're touching on this a lot, but freelance income is so hard to measure. So hard. Like, the studies define freelancing differently, alright? Some… and, like, when I used to be part of AVA, which was the Association of Virtual Assistants, that I co-founded with two other women, I was the COO, and we would release a survey for VAs. Every year. Was it every year? Yeah, I think we had released 3 or 4. And we realized how hard it was, because we had to distinguish between side gigs. And full-time gigs, and what do you consider to be full-time? Is full-time 40 hours, or is full-time your main source of income? Right? We had all these questions that we were all just like, oh, shoot, how do we measure this? Okay? So from that, like, it's really hard to measure, and even we were having problems. Like, what do you consider part-time? What do you consider full-time? What do you consider, like… there were people who were like, yeah, it's my full-time income, and they were making, like, $40,000 a year. But that's because they were staying at home with their children, and they were only working little, like, you know, when they could, here and there, nap time, when they were at school, and they only made $40,000 a year, right? When you're looking at these studies, it's really hard to measure self-employment income. It just is, because everyone kind of defines it differently, and that's the beauty of freelancing, is that we all have different businesses that do different things. But that makes it really, really hard to measure, okay? And then, on top of that, like, statistics don't really account for how you run your business, and we've kind of gotten into this, right? Like, these statistics don't go into, like, how much your expenses are, your skills, your capacity, your sales ability, and how consistently you bring in leads, your pipeline, etc. So two people offering the same service could be running completely different businesses, and I want you to keep that in mind when you're looking at stats, right? Your definition, also, think about that. Your definition of success might not even be revenue-based, right? Someone earning $90,000 a year, working 20 hours a week, may have built, like, an awesome business for them. Then someone who was… just wants to max how much they can make, working 55 hours a week at $150,000, earning $150,000 a year, right? These revenue statistics don't tell you anything about, like, the flexibility, profitability, workload stress. Stress is a big thing, right? Like, some people build freelance businesses that actually end up really stressful, and I myself have done that before. I feel like I'm in it right now. Yeah, truth. And… and doesn't account for whether the person who's built their business really likes their business, right? Do they even like what they created? These stats don't give you those little details, right? Like, they just tell you income most of the time, or what people are doing, and the averages. That's not what you want out of your own business. And at the end of the day, it creates this fakeness, this fake ceiling before you've even started doing all of this, or maybe you have started, but this is… it's all fake, and it's hard to say that, because it's not fake, because it's taking everything from the internet, but it's not real, and it comes back to, like, How much is freelancing worth to you? Is it, like, being mentally free? And feeling amazing? then that's gonna be totally different, right? You're building a business, and your revenue shouldn't be limited by this industry's average compensation, right? When you're looking at stats out there, stop thinking about how much does the average freelancer make, right? What I want you to think about is, what would my business need to look like to make the income I want while working the hours I want? And then reverse engineer that number, okay? I want you to not be thinking about these, like, salary statistics so much, and feeling down about them. Because the statistics aren't telling you what's possible, right? It's telling you what's happening across a huge, inconsistently defined group of people, because… oh, one more thing I wanted to bring up, a lot of times it brings in offshore freelancers, which have a totally different amount that they're making, and hours they're working, versus someone in America, Canada, or the UK. Alright? And that bothers me, because it's not US-based, it's not Canada-based, not Western-based, it's the global, global freelancing statistics, which can be really difficult and bring numbers down a lot.To recap, right, like, you really need to be thinking about freelancing is a super broad category. The average freelancer might not be building the business you're trying to build. Averages are misleading. Try to find median, if possible. freelance income itself is really hard to measure, right? Statistics don't tell you how to run your business. And lastly, like, your definition of freelance success, it might not even be related to revenue. So stop looking at that, because that just creates this fakeness that is different from what you want. You're building your own business, alright? So, I hope this helps some of you who might be feeling down, or if you might have researched at one point, how much are these… how much can I make in this position? how much you can make is limitless. I promise you. It's… there's no ceiling, and I've been proof of that time and again, and it's quite amazing. I would love to chat with you. If you feel like this is something that you're bumping up against, and you're having trouble with your pricing and getting out of that average, or clients are saying, hey, no, I thought, social media marketer would be $30 an hour. Why are you charging $125 an hour? Or, like, whatever it is. I can help you with that. So sign up for a link in the show notes. And it's a free call, and I would love to help walk you through this. So, tip of the week coming up, we're going to be talking about why you need to be thinking about a minimum income before quitting, alright? See you then. Until then, keep flourishing.