Month: January 2021

One of the things free agents have to do is actively manage their psyches around work. In the paycheck economy, if you have a decent job, amateur psychology is mostly just an idle pastime built around comparing Myers-Briggs profiles for fun, and trash-talking people who score differently than you. If you’re otherwise mentally healthy and the job is not toxic, it is just harmless fun. The environment itself passively manages your psyche by being relatively stable.

But for free agents, managing your psyche can be a matter of life and death. Unhealthy attitudes can send you down a spiral of self-destruction no matter how strong your position. And healthy ones can transform even bad situations into strong positions.

To help you reflect on how you manage your psyche, I made a table of what I think are the important dimensions free agents should periodically reflect on. I’ll explain the logic in a minute, but before you read on, just go down the rows of the table and identify whether your attitudes most align with the Parent, Adult, or Child column on each dimension. You don’t need to understand the underlying conceptual machinery to do this.

The table is based on conceptual machinery from one of my favorite DIY psychology frameworks: Transactional Analysis, or TA.

TA is a neo-Freudian approach to psychology, developed by Eric Berne, which was very popular in the Eighties. It was applied primarily to analysis of game-like behaviors in relationships (explained in Berne’s bestseller Games People Play), based on unbundling personality into Parent, Adult, and Child components (updates to Freud’s superego, ego, and id). The models were later extended to analysis of life scripts and postures (in Thomas Harris’ bestseller I’m Ok, You’re Ok).

While these basic uses of TA for game and script analysis are very useful for for the free-agent’s toolkit (client interactions are full of Bernean games), I want to suggest a different use: periodically recalibrating your relationship to the world.

Though I’ve drawn on TA models and frames to make the table above, you don’t need to be familiar with the conceptual machinery to use this table and draw conclusions from your responses.

Along the key dimensions in the table, how do you relate to the world?

• Through your Parent, via internalized, unexamined societal attitudes and received wisdom?

• Through your Adult, via conscious, reasonable, competent, reality-grounded behaviors?

• Or through your Child, via playful, exploratory, fumbling, muddling, impulsive engagement of the world?

Paycheck employees in non-executive ranks typically have a strongly Parent-dominant life posture. Executives and more mercenary 80s/90s/00s style free agents typically have a strongly Adult-dominant life posture.

Neither is, I think, well adapted to the world we are heading into; the world that has been taking shape since 2015.

Strange though it might seem, a Child-dominant life posture is actually best suited for our current world, and is characteristic of both innovative entrepreneurs and free agents who thrive.

Why?

The Biggest Risk

The thing is, the biggest risk in the weird new world is neither long-term security (which Parent-dominant attitudes solve for) or short-term survivability (which Adult-dominant attitudes solve for). Those are important, of course, but moot if you become too disenchanted with the world to even get up in the morning and do something meaningful with your day.

The greatest endemic risk to the psyche in 2021 is not that you’ll end up on the streets next week or fail to fund your retirement in 30 years. The greatest risk is that you’ll feel so relentlessly battered by the weirdness all around that you’ll go numb and simply disengage from the world entirely today.

Short and long-term security are moot if your life minute-to-minute is unlivable due to overwhelming weirdness. And your inner Parent and Adult have no clue how to handle the trauma of weirdness.

The evidence for this is all around us. Around the world, younger generations are reacting to coming of age (which is the same thing as reining in your Child and turning on your Adult and Parent) in a bleak world by retreating.

The Japanese phenomenon of hikkikomori is spreading. The risk of becoming so disenchanted with the world that you retreat into your parents’ basement is high. Ironic, huh? Giveupitis as the mark of growing up.

Some call this a meaning crisis. I’ve lately started thinking of it as an enchantment crisis. The primary reward your Child seeks in the world is an enchanted way of being in it. When this drive is starved, you get disenchanted, and even if your Adult remains competent at functioning in the world, and your Parent has all the right cliches on file for every situation, you lose the will to live. Because that will comes from the id, the Child.

This is becoming increasingly common. It is getting easier and easier to become terminally, fatally, disenchanted with the world and turn into one of the walking dead, a zombie assemblage of functional but pointless Adult/Parent drives, until one day you fall down and can’t get up again because you don’t want to.

See, the thing about the weirdness all around is:

• Most Parent data (the superego is mostly data) has been undermined by recent historical developments. Your Parent is kinda out-of-touch (just as your actual parents likely are). Your hand-me-down cache of cliches to live by has been invalidated.

• Most Adult skills (the ego in TA terms is mainly skills grounded in reason) have become overwhelmed by the sheer complexity and weirdness of our world. The formulas and algorithms don’t work. They’re thrashing. They’ve turned into delusions of competence. Adulting has turned into a non-functional LARP. That’s why you have to learn it like it’s a quaint retro hobby from 1955. If “Adulting” were actually life-critical, you’d be dead already.

• But most Child tendencies (the id is mostly tendencies) are still pretty functional. Children are naturally present in the world as strangers in a strange land; alien beings suddenly dumped into relentless weirdness. Healthy children respond to weirdness with exploration and learning behaviors. They respond to felt incompetence with trial-and-error practice. Healthy children prioritize enchantment, not retirement funds. The worry about making this minute worth experiencing, not making rent.

Though it might seem insanely risky to let your Child lead, with your Adult and Parent biting their tongues and following, under the extreme weirding conditions of today, it’s actually the safest thing to do.

Dump the shaky preconceived notions of the Parent. Dump the flailing and delusions of competence of the Adult. Let the Child lead.

Pay Yourself First: Child Edition

One way to operationalize this observation of the world is to reframe the classic personal finance advice, pay yourself first.

In the traditional form, the advice means paying into retirement savings before budgeting discretionary expenses.

This is classic Parent-dominant advice: long-term oriented, prioritizing social stability (of institutions that underwrite old age for all), etc. It is about saving money for future-you, while trusting that society will endure, and doing your part to make sure it does.

Between 1980-2015, this advice turned into a more Adult-dominant idea with emphasis on short-term risk management, winning in a Hobbesian neoliberal environment, and making sure your retirement was funded even if the world threatened to fall apart by the time you turned 65. It was a kind of Neoliberal Athletics competition.

But how are you supposed to pay yourself first when you are a NINJA? No income, no job or assets? Forget the defined-benefit pensions or lifetime employment of the 70s. You can’t even bet on the defined-contribution (employer-matching) or short-term stable jobs of 1980-2015.

To center the primary risk — of terminally disenchanted retreat from the world — I think of pay yourself first as being about the present-moment you, and in terms of time rather than money.

Pay yourself first in 2021 means prioritizing time for some activity that keeps you positively engaged in the world, through some enchanted mode of seeing, being, and doing that resists disenchantment and retreat to basement fantasies and LARPs. You only retreat to live in a video game world when you can’t find a way to participating in the enchantment available in the real world, no matter how weird such participation looks to traditionalists.

Pay yourself first in 2021 means aggressively nurturing and defending your primary mode of enchanted engagement with the world, even if it means forgoing some money in order to buy yourself the time to do so (something I’ve done very frequently).

Everyday Alchemy

I call this transactional enchantment both as a hat-tip to the Transactional Analysis frame that inspired it, and to point to the idea of trying to bring an enchanted perspective to everything you do, whether it is drafting an invoice, looking for gigs on Twitter, or writing a newsletter.

Enchantment is not just for game nights with friends, or whatever traditional or New Age spirituality you favor. Or something to relegate to hobbies, fiction-reading and TV-watching. It is something to infuse into everything you do.

It’s not about magic or woo. It’s about transacting with the world in a way that makes life not merely possible to live (whether in the long or short term) but worth living minute-to-minute.

What’s the point of short and long-term security if every day you wake up wishing you could just stay in bed, numbly withdrawn from the world, swaddled in blankets?

What’s the point of contributing to retirement savings if, like Bartleby the Scrivener in Melville’s short story, your attitude towards work has degenerated to “I would prefer not to,” and you’re one step away from terminal catatonia?

My own mode of transactional enchantment has been writing. Through good and bad times, cash-flow crises and flush periods, painful gigs and fun gigs, I’ve never stopped writing. I was writing through the euphoria of 1997-99, and I was writing through the Global Financial Crisis. I was writing through the halcyon GFC-recovery years of the early 2010s, and I was writing through the PTSD of the Great Weirding.

Everything I do is informed by my writing, and everything I do feeds into it. It’s where I transform the banalities of my day-to-day activities into an experience of life worth living. It’s my way of staying on top of the everyday alchemy that you simply cannot afford to get behind on. The disenchanted life is not worth living.

Writing is not the only way to achieve this kind of transactional enchantment, but it is one of the most accessible ways. It demands the least in terms of special talents. You don’t need to be artistic, musical, or good at programming to do it.

Just pick your mode (or rather, let it pick you). It’s the enchantment mode of being in the world that matters, not the medium.

If you fail at this absolutely basic housekeeping task of generating transactional enchantment in your life, minute-to-minute — literally Child’s play — everything else is moot. Your retirement fund won’t save your sanity, and LARPing Aurelian stoicism (a popular genre of Adulting) won’t make life worth living.

So pay yourself first. Make the time to stay transactionally enchanted with the world. Otherwise it’s game over.

It’s been twenty years since Dan Pink published his landmark book, Free Agent Nation, or FAN, in 2001. It remains, in my opinion, the most prescient among the many such books that were being published around that time. The other big one was Future of Work, which inspired the development of eLance. Elance, after merging with oDesk, turned what is today Upwork, the default entry-level gig marketplace.

I read Dan’s book in 2007, and it inspired a gig marketplace product I developed at Xerox (during the course of which I had a lot of interactions with the people then running oDesk). I also got to know Dan a bit (he blurbed my book, Tempo).

In the twenty years since FAN was published, the free-agent nation has turned into the free-agent world. It is more than just an economic sideshow now. It is a young, but full-stack model of civilization. A way to run a world. It boasts a relatively full set of folkways spanning culture, politics, economics, and lifestyles. Since Covid, it is beginning to increasingly look like the default along many dimensions, such as working from home (WFH).

Many other big and interesting ideas have emerged in the 20 years since FAN, the most well-known being Tim Ferriss’ Four-Hour Work Week. Among my own favorite ideas are Marci Alboher’s idea of “Slash” careers in One Person/Multiple Careers (here’s my review from 2009), named after the way people tend in the gig economy tend to describe themselves with slash-separated descriptors, like blogger/consultant, and Hugh MacLeod’s Sex and Cash theory.

All this stuff is like water now, so it’s hard to see, but all the ideas we take for granted today were not obvious ten or twenty years ago, let alone engineered into an entire stack of tools and a growing cottage industry of startups that expressly set out to serve our needs in the what Li Jin dubbed the Passion Economy.

Among the ideas that were new and strange ideas to most of us sometime in the last twenty years:

• Looking for gigs on online marketplaces

• Coworking spaces

• Networking on LinkedIn

• Parleying online activity into a speaking career

• Teaching and coaching online

• Managing a personal brand

• Professional website hosted on your own domain

• Showcasing your technical abilities on Github

• Working “under the API” with an algorithmic boss

• Uber for everything

• Turking and crowdsourcing

• Raising money for speculative work via GoFundMe, Kickstarter

• Getting paid via PayPal

• Videoconferencing and VoIP

• Cloud-based subscription software for every business function

• Self-publishing your own paper and e-books via self-serve tools

• All of social media

The list goes on and on. Those of us who grew old alongside this technology learned to work with each new capability as it became available. Seeing it listed all-at-once gives me a bit of nausea frankly. Did I really live through the arrival of all those things on the scene? Am I really that old? Did I really leave the paycheck world I was factory-manufactured to inhabit, and learn a whole new set of work-ways, ways new to humanity, over the course of the last 10 years?

Those of you who are entering the workforce now (whether via a YouTube channel or TikTok at 14, or straight out of college and failing to find a job at 21) are faced with a nearly complete stack of economic life-support technologies, but a mainstream economy that still acts like it is some strange weird new thing that nobody knows how to use, even though to you it is likely already second nature, and most things in it are already over a decade old.

Over twenty years, literally tens of thousands of blog posts and magazine articles were written, exploring the future of work that we now inhabit.

Dozens of them went on to become classics. Remember Kevin Kelly’s 1000 True Fans? That was 2008 and was not obvious before. How about Chris Anderson’s The Long Tail? That was 2004 and again not obvious before. Many individual books and blog posts were faddish, but their cumulative effect was to map out an entire emerging new world. Hundreds of blog posts and books contributed little bits and pieces of ideas, but were then forgotten.

Though this newsletter is under 2 years old, I’ve been part of this conversation for as long as I’ve been writing online. Some of you who were following my writing 13 years ago may remember that in 2008, I won a prize from the audio equipment maker Plantronics for coming up with the term “Cloudworker” to describe the newly emerging class of workers.

All that seems a lifetime ago.

But the conversation started, I think, with Dan Pink and FAN. When you compare FAN and books that came after with books like Michael Gerber’s 1986 classic, The E-Myth (revised and updated in 2004 as The E-Myth Revisited, but unable to shake the pre-2000s vibe — the E- stands for entrepreneurial, not electronic), you can sense that something important changed around 2000, which Dan was among the first to spot.

While E-Myth is a good book for the gig economy, with a lot of good advice for people wanting to start solo small-business lifestyles, it is fundamentally rooted in a pre-Internet world. Just like “executive suites” existed before “coworking spaces” but fundamentally represent a different mindset (and a unit-economics structure that is closer to motels).

Dan realized that the internet changed the game radically, and spotted many of the early signs. Including the important fact that the Bureau of Labor Statistics was not meaningfully tracking free-agents (and still doesn’t), confusing them for either contractors or 1-10 person small businesses. What was remarkable is that he spotted many of the signs before they turned into clear and obvious markers.

Remember, this was when even videoconferencing was a special, expensive thing, VoIP was some sort of new-fangled magic, people actually paid big money for international calls, and getting paid electronically via PayPal was only just starting to become a common thing.

It’s kinda funny that “strategic foresight” people within paycheck organizations still continue to write ponderous “future of work” trend analyses that seem to think stuff we’re doing today is stuff to expect in 2030. The future that Dan Pink foresaw in 2001 is already here, and is not even unevenly distributed. It’s all over the place, and easier to get into than the paycheck economy, which increasingly looks like an exotic science fictional universe that’s harder and harder for ordinary people to break into.

I think we are at another moment like 2001. A phase shift in environmental conditions is being triggered by the exit of Donald Trump and the inauguration of the Biden administration. This time, the changes being triggered today (and early signs and portents are visible) will be mostly around politics, taxes, and other such non-technological things.

It’s time to pay attention again because the game is about to get reinvented again. The Free Agent World is past its technological origin story, and is about to start growing up.

Money is an unseemly topic to discuss in the paycheck world. There is a fairly strong global social taboo around openly discussing salaries.

Less obviously, it is an unseemly topic in the indie consulting world as well. We just don’t notice as much because, conveniently enough, it also happens to be harder in practice to do the math to get to taboo-worthy paycheck-equivalent numbers to compare. But that doesn’t mean we are any more willing to discuss income openly.

But more interesting than the mere existence of comparable taboos in the two worlds is the fact that they exist for different reasons.

In the paycheck world, the taboo exists so it is easier to fake your position in the keeping-up-with-the-Joneses rat race. But that doesn’t explain the taboo in the indie world, since we very theatrically quit the rat race as our opening gambit, often with some holier-than-thou posturing and manifesto-writing accompanying our exits (which is fine; a bit of positive self-talk to work up the courage to quit is perfectly acceptable).

So what’s the deal with our version of the taboo? And should you break it?

The Salary Discussion Taboo

In the above-the-API paycheck world, it is obviously beneficial to employers if employees don’t discuss salaries openly, and though in the US you cannot be legally prohibited from doing so, many employers strongly encourage the norm. Many even institute it as a policy, though it cannot be legally enforced.

The thing though, is that employees don’t really want to discuss their salaries openly any more than employers want them to, whatever the cost in terms of ceded salary negotiation leverage.

Periodically there are calls by well-intentioned people to “normalize” open discussion of salaries, but it never works and never will.

Why?

In the modern world, income, identity, and social status in the middle class are too tightly coupled for talking openly about salaries to be comfortable. Revealing how much you make has social consequences. Gaining salary negotiation leverage against employers is a secondary consideration. Maintaining a social status quo relative to neighbors and work peers is primary. Your neighbor (or coworker in the next cubicle or Zoom window) with a very similar home and car may be making twice what you make, and have half as much debt, but you wouldn’t know it — and it is in both your social interests to pretend the differences are smaller than they might actually be.

The salary taboo is a peculiarly middle-class thing, and there’s a history to it.

Through most of the twentieth century, as the middle class grew and absorbed chunks of the working and wealthy classes, the taboo grew in strength. Socially, the middle class is much more egalitarian than either the wealthy or the working classes. Markers of differences in wealth and income are subtle and understated. The differences are not denied, but their social consequences are consciously minimized. Shared social realities — such as schools and community centers — present a facade of near-absolute equality. Even in the US, where homogenizing norms like school uniforms are uncommon, flaunting your parents’ wealth too openly, or failing to adequately mask their lack of it, marks you for social consequences.

After 1980, as the middle class began to both shrink and socially fragment under economic stress, the taboo weakened, but only slightly. Social life in the middle class depends too much on the pretense of relatively equal, or at least non-traumatically-comparable lifestyles, for the taboo to dissipate. A twinge of envy when you look over to your neighbor’s driveway is not just acceptable, but desirable. But you don’t want such casual awareness of your social milieu to turn into suicidal despair at the unfairness of the universe.

All this tempers the impulse to share salary information, and the impulse is not class-native to begin with. So where did it come from in the first place?

The thing is, the very idea of trading salary information for shared negotiation leverage is fundamentally a working-class solidarity tactic.

In the working class (what used to be called blue collar or service labor, and I call under-the-API work in its modern form) openness about pay harmonizes well with things like unions and fungible labor.

In the traditional working class, people were much more interchangeable. They were valued by role, and by a relatively straightforward correlation between experience (“seniority”) and a worth-in-role perception that was relatively independent of skill (unlike modern white-collar work or pre-modern craft work).

It’s not that the working classes are less socially competitive — it’s that they are too interchangeable at work for work identities to form much of a basis for individually differentiated social competition.

As a result, working-class Joneses around the world compete socially in other ways. In the US, historically, things like Christmas decorations, bowling scores, baking skills, chili recipes, drinking stamina, and dancing abilities have mattered more than income. Neighborhood “Big Man” types dominate local social hierarchies much more than in the middle class.

Among the wealthy, of course, the discussion is moot. Net worth and political power are far more important than salaries (and indeed, among the truly wealthy, living off investment income is the norm, and working for money at all marks you as not-quite-top-shelf).

Now consider the corresponding picture in the indie economy.

Indie Income Illegibility

To be clear, I’m talking above-the-API new-white-collar indies, not Uber drivers. Below the API, if you do particularly well or poorly, there are incentives to brag or complain, since it reflects on algorithmic casino dynamics more than your personal character. Above the API, things are more complex.

To begin with, talking about money at all is basically harder for indies, for several practical reasons:

1. More dimensions: It takes more numbers to capture even a basic picture of an indie consultant’s personal finances. At the very least, you need their effective hourly rate, number of hours actually being billed at that rate, and routine operating costs, all of which are uncertain and radically variable. Most indies don’t even have a good handle on their numbers. Sharing them openly is moot.

2. More complex costs: Unlike paycheck employees, indies may have wildly varying non-routine costs due to things like subcontracting, paying for their own tools, and self-funded spec work which may involve upfront costs like travel and capital equipment, or just drawing down savings and turning down paid work (an opportunity cost) to invest in spec-work with higher potential.

3. Lower lifestyle correlation: You cannot easily guess income from visible markers like type of work (descriptors like “strategy,” “coaching,” and “design” reveal almost nothing), type of car a person drives, or what neighborhood they live in.

4. Lifestyle design: Indies have the freedom to do a lot more strategic lifestyle design, and many make heavy use of that freedom, which makes apples-to-apples comparisons with the Joneses harder. In a sense, it’s closer to comparisons across countries than across fences. Every indie is like a country unto themselves, even if they don’t move to Thailand.

5. Wealth-income blurring: Despite typically middle-class financial profiles, the financial and risk-management style in the indie world resembles that of the wealthy class, with a weird mix of work-for-hire income and cash flows that look like investment income. Once you are somewhat established, there are usually capital-like assets in the mix (such as book royalties, affiliate income, or pre-recorded courses) that have no clear social significance.

6. Tax-optimizing behaviors: Even when indies pay themselves a regular paycheck (such as you’re required to do with an S-corp in the US for instance), the numbers are designed to minimize taxes rather than maximize a vanity number. Other tax-driven behaviors include choices of where to live, renting an office vs. maintaining a home office, how you handle insurance, and so on.

Given all this complexity, indie income is highly illegible.

Personally, I really only get one meaningful snapshot of my income per year, when I do my taxes. And even that is shaky since I sometimes defer revenue or expenses, and at other times, take money in one year for work that will be actually be done in the next year. Once every few years, I sit down and do some analysis, but it’s a pain to actually keep track in any detail.

So the headline — but not the bottomline — is that indie income is fundamentally more illegible.

Now, it wouldn’t actually be that hard to set up systems to do the math and come up with a fairly accurate “paycheck equivalent” number. If you do your books properly, you’d just need to spend more time (or pay your book-keeper more) to generate an additional report in QuickBooks. But doing the math wouldn’t be hard. In the simplest case, it would look something like this.

• Trailing 12-month revenue: $100,000 (accrual basis)

• Trailing 12-month costs (including subcontracts etc): $20,000

• Moving average monthly salary-equivalent: $6667

In more complex cases, you’d have to put some thought into building a good equivalency calculation model (did you account for typical employer-matching contributions to retirement accounts and health insurance? How about any creative (but hopefully legal) expensing you might be doing, to move some costs from your personal to business budget?

But here’s a more basic question.

Why do you want to know this number, let alone share it openly?

What would you do with it if you set up some scripts to compute it every month? How does knowing the number help when you’re facing a cash crunch right now due to late invoices or a dry spell? How does it help you set an hourly rate?

And there are good reasons to not want to know.

Because you see, like our friends in the paycheck world, we don’t want to talk about it either. But for different reasons.

The Indie Income Taboo

The indie consultant class is, socially, part of the middle class. We tend to live roughly middle-class lifestyles in middle-class neighborhoods. Our friends in the paycheck world tend to be middle-class too.

So one obvious reason we share a paycheck-discussion taboo is that we still belong to the class that has such a taboo, even though our economic lives have changed. Sheer force of habit, and ongoing social reinforcement are powerful.

But that’s only a small part of the reason.

The real reason we don’t want to know or discuss our numbers is different: it makes it harder to lie to ourselves.

The way we indies describe ourselves to ourselves, and to a lesser extent to the world via our websites and social media profiles, is some mix of marketing, wishful thinking, and aspirational thinking. Looking too closely at numbers — even when we can’t easily compare them to others — tends to puncture our self-images in depressing and demotivating ways.

• Are you really a “strategy consultant” or did 58% of your income come from intern-grade Excel-monkeying, and 37% from affiliate income, leaving just 5% of your income matching your claimed headline?

• You might claim a half-dozen clients, but maybe 90% of your income came from one anchor client you dislike, for whom you do work that looks nothing like your headline, and you are more than a little embarrassed by.

• Perhaps you claim to do “strategic brand narrative” work, but are really spending 90% of your time crafting clickbait email campaign headlines for a sketchy business.

• Perhaps you claim to do organizational development for Fortune 100 companies, but that was one gig 3 years ago, and now you really mostly run a scammy online workshop for B-players at third-rate companies paying their own way.

• Maybe you’re making a ton of money, but looking at the details of how the sausage is made reveals the utter meaninglessness of what you do, highlighting how it is actually worse on that front than the job you left for not being “fulfilling” enough.

There is a social aspect too. We indies may not compare lawnmowers across picket fences. We may not compare suits and ties on the trading floor of an investment bank. But we do compare, for want of a better phrase, online narratives and postures. We have our own version of keeping up with the Indie Joneses (heh!), where our Twitter bios play the role of the car in the driveway.

We know what sounds fake, and what sounds real, and have finely calibrated bullshit-detectors when it comes to parsing the public profiles of peers.

• We can guess who’s putting on a desperate brave face, and who is understating what they’re making.

• We can guess who is on the brink of penury, and who is on the brink of being able to quit paid work altogether.

• We can see who is a grifter, who is a posturing snowflake, and who is really just a paycheck employee without health benefits.

• We can generally pick out the people who are actually trying to do interesting and meaningful work. We can guess the extent to which they are succeeding.

Our version of the game would obviously be much easier if everybody shared more. But should we?

Is it perhaps a good thing that the game is as hard as it is? Do we actually want to be putting our current moving-average incomes on our Twitter bios?

Should you break the taboo and find ways to talk openly about how much you make? Or should you respect it, and learn the nuances of the game of keeping up with the Indie Joneses?

The Taboo is a Good Thing

This might be a surprising conclusion, but I think for indie consultants, as well as for paycheck types, the taboo is actually a good thing.

A richer, more functional social milieu exists because we have a certain sense of decorum around how we talk money. This sense of decorum is, in my opinion, wiser than the impulse towards what is generally a vanity form of openness.

In the case of indies, the important thing is to not lie to yourself, but the salary-equivalent number does not actually matter for its own sake. Unlike for paycheck types, it plays no meaningful role in your life. Since you don’t use it as the basis for negotiating anything, it doesn’t matter. On the other hand, component numbers of the illegible formula, like an hourly rate, are meaningless to compare on their own.

So for your own needs, the important thing is to develop ways of looking at your books that keep you honest about the questions that actually matter:

1. Does the headline of the work you claim to do match the contents? It is okay for there to be a gap so long as you understand clearly why it exists and should exist.

2. Does your income mix reflect your actual or desired posture? Both are fine — so long as you know which it is.

3. Are you doing too much of work you don’t want to, and too little of work you do want to? Are you able to say yes/no to gigs wisely, assuming you can say no at all?

4. Are you able to invest as much as you want in spec work and non-consulting income assets?

5. Are your finances lifestyle-optimized and tax-optimized?

6. Are you saving at a reasonable rate — like paycheck types, you too will grow old, less able to work, and needing to retire.

7. Should you accept this gig at this hourly or project rate? Will you learn something new that’s worth any discount you might be offering to land the gig?

8. Is your runway healthy? How about your health insurance situation?

9. Do your risks look good? Are you betting on things with a range of upsides?

10. Are there things you want to buy that you are not able to afford? Material quality of life matters.

The thing is, the paycheck-equivalent number doesn’t actually matter for any of these questions; it is a pure vanity metric of no consequence.

The only reason to want to know it is to have something to compare with others, and with your former paycheck self (and former colleagues still in that world).

So there is no personal reason to answer that particular question of paycheck-equivalent income.

What about social reasons?

We don’t play the keeping-up-with-the-Joneses game for neighborhood status, but we do play something that looks a lot like it, and it is not meaningless.

Learning to present yourself, and parse how others present themselves, is an important skill. You have to look enough like other people that potential clients understood who you are and what you offer (ie don’t call it “customer delight wrangler,” just call it “marketing”), and unique enough that they want to hire you specifically.

Part of learning this skill — and teaching it to newer indies who might find your experiences useful — is being able to talk compassionately and usefully about these things while being kind to each other, in terms of not overtly challenging the personas we all try to present and inhabit, where it would do more harm than good.

To the extent taboos foster healthy patterns of mutual support, they are good. To the extent talking about numbers out of vanity, some misguided sense of openness, or an inapplicable sense of solidarity, actually hurts others (by drawing them into unwise candor or demotivating them) violating the taboo is actively bad.

Reveal what you’re comfortable revealing, when and where you’re comfortable revealing it. You’re an adult. You don’t need rules/boundaries of the sort designed for children where thoughtfulness is called for. But you don’t need idealistic taboo-breaking for its own sake either.

It is entirely fine to tiptoe around sensitive matters with euphemisms and obfuscations. For example, I rarely ever share my income details even 1:1 with highly trusted friends (on the one day of the year that I actually have a sense of it), but I’m happy to share hourly rates pretty freely (but usually only 1:1) and advise others on where to set theirs, or how to price project-style bids.

I’m typically open about approximate narrative indicators like “I am making more than I did at my last job, but not as much as I probably would be by now if I’d stayed in it and progressed at the expected rate.” That sort of thing, I think, helps others calibrate in useful ways, and make their own quit/stay decisions.

It is somewhere between childish and clueless to hold to arbitrary standards of openness as a value for no good reason.

This is particularly a lesson struggling, early-stage indies need to internalize, because they often don’t recognize the costs of openness. Some seem to believe they have so little, they have nothing left to lose.

It is certainly okay to ask for help, even publicly on Twitter. It is okay to share some of what you’re going through. But there are costs. You don’t exist in a bubble of security and unconditional positive regard as you might within a healthy family. You exist in the real world, where what you say affects how you are perceived, and determines who is willing — or not — to deal with you. You exist in a world where visible vulnerability can be exploited.

There are real costs to posting a highly detailed confessional laying out all your deepest financial life secrets in the misguided belief that such openness will be seen as “authentic” and lead people to magically open doors for you.

That doesn’t happen. The world doesn’t work that way.

In the adult world, there is always a balance to be struck between vulnerability and guardedness, openness and discretion, managing perceptions versus presenting an unedited self to the world, solidarity with others, and pragmatic self-interest.

Wanting to be completely open financially — whether the picture is one of abject despair or obscene success — is more often an exhibitionist impulse or a reaching-out for human connection than it is a useful tactic in improving your financial condition.

So yes, talking about money is fraught — and it should be. Don’t let misguided idealism draw you into talking about money in ways that don’t feel either right or wise.

Well it’s only January 7, 2021, and the Big Bad Wolf is already huffing and puffing more powerfully than in 2020, threatening to blow our houses down. There’s an insurrection being held at bay in the United States, a more virulent mutated SARS-CoV-2 abroad, and the vaccination effort is running into a wall of distribution snafus and vaccine hesitancy.

What’s a precarious free-agent to do in this environment? Turns out the folk tale of the Three Little Pigs and the Big Bad Wolf sheds some interesting light on the problem. It is a good allegory for resilience in turbulent times — the Big Bad Wolf huffing and puffing like it’s 2021.

Which of the three little pigs should you try to be: the one in the straw house, the one in the stick house, or the one in the brick house?

• The pig in the straw house is the typical free agent, with the flimsiest of protections

• The pig in the stick house is the typical paycheck employee, with a little more apparent resilience

• The pig in the brick house is the one with a strong liquid cash position and deep savings, whether as a free agent or an employee

Here’s a perhaps counter-intuitive idea: if you can’t live in a brick house, the straw house might actually be a better bet than the stick house.

As I noted in my first Covid-response post on March 12, 2020, Gigging in the Time of Corona, cash, control, and community is the best formula for resilience. If you’re strong on all three fronts, you have a brick house. If you’ve got that, you’re in good shape.

But if you compare paycheck employees with poor reserves to free agents with poor reserves, who comes out on top?

Superficially, it might seem like the stick house is better. It buys you a little extra time against the huffing and puffing of the Big Bad Wolf. That’s good, right?

Maybe not. In 2020, we saw huge numbers of people on paychecks being laid off or furloughed. They were reduced to running up credit card debt, and desperately trying to get through to the unemployment office for weeks and months on end. They had more time, but were less prepared to exploit that time.

On the other hand, the gig economy not only seemed to weather the storms, but even grew, becoming the backstop for people who had lost paycheck jobs.

Paychecks, as many have pointed out, have something of an addictive quality to them. They tempt you into unsafe cash-flow management behaviors through their very predictability. I certainly used to live less safely back when I was on a paycheck.

As an indie, I learned early on that I was in a glut/famine unpredictably cyclic economy. I learned the coping behaviors — build up higher reserves, keep multiple income options alive, and react fast to threats and opportunities. Paycheck people often never learn any of these disciplines.

So when storms hit, they are often caught unprepared. They’re living mindlessly paycheck-to-paycheck (even the well-paid ones; it’s the cost of keeping up with the Joneses), and when the layoff risk suddenly skyrockets — as it did last year — they have no contingency options in place that they can exercise.

Last year, white collar information workers were largely safe, and service workers bore the brunt of the fallout (a double jeopardy of being both more exposed to the pandemic, and to losing their jobs). This year, as longer-term impacts start to kick in, I think the blast radius of 2020-21 will only spread. Nobody is safe in this environment. Not even people celebrating Bitcoin nudging $40,000. Too many things have been disturbed too much.

For paycheck workers in their stick houses, in the cash, control, and community formula for resilience, ALL three elements turn out to be illusions linked to the paycheck.

• Cash: the paycheck is predictable, but not actually reliable. You could be laid off easily in a crisis. Your employer might simply buckle under the stress.

• Control: you don’t actually have control over your destiny. Your project, the darling of several VPs, could suddenly get canceled.

• Community: Sure you have a nice bunch of coworkers, with whom you used to get lunch pre-Covid. But if you lose your job, you’ll lose all of them too.

The last part came as a forceful shock to me when I quit my last job in 2011. I ended up keeping in touch with almost none of my friends from Xerox. I had lunch a couple of times with a couple of old colleagues, but then the entire work social network, which was such a huge part of my life before, just seemed to evaporate into thin air. If I hadn’t had my online life, I’d have become radically isolated overnight.

You don’t realize how fragile the paycheck situation is until you lose it for the first time. That’s what life in the stick house is like.

Life in the straw house, on the other hand, is paradoxically more resilient because it is more precarious. Random cash flow shocks are routine. A hoped-for gig doesn’t materialize. Another doesn’t pay. That invoice is delayed. This “passive” income stream is suddenly broken due to a billing bug.

Keeps you on your toes.

Now, I wouldn’t say I’m personally in a straw house situation right now. I’ve been at this long enough that I’ve actually managed to accumulate enough savings to count as a bit of a brick house. If all my income evaporated overnight, I could last quite a while before I got into real trouble (much longer than I could have back when I was on a paycheck). But I’ve definitely endured many a straw-house year.

To mix metaphors, you could say my house is a barbell house of straw and brick. I’m set up to be highly sensitive to the economic environment, but also have a savings runway.

But one thing I’ve carefully avoided for a decade now is getting reliant on anything that looks like a stick house — a paycheck-like income stream that is just predictable enough to lull you into a false sense of security, but not actually reliable enough to buy you enough time to reorient in a real crisis — once you wake up to it. While I’ve enjoyed bouts of pseudo-paycheck security in the last decade (like the year-long fellowship last year that ended just as Covid hit), I’ve never become reliant on them.

We’re only at the beginning of what promises to be a drawn-out economic crisis around the world. In the United States it is also a socio-political and cultural crisis. You’re going to have to pay careful attention to how your life is set up, what risks you are exposed to, how those risks are shifting week-to-week, month-to-month, and quarter-to-quarter, and how your option set is evolving.

So yes, it’s 2021, the Big Bad Wolf is up to his old 2020 tricks, huffing and puffing, trying to blow our houses down. But humanity has endured far worse, and through periods when almost the entire economy was a gig economy. These are bad times, but not apocalyptic times.

There’s only a small chance this environment will kill you (literally or figuratively, via livelihood destruction), but there’s a good chance it can make you stronger if you’re properly open to it.

We’re all pigs in this kind of environment, but if we build the right kind of house to ride it out in, we don’t have to get slaughtered.