Quite some time ago I wrote a three part series on how to calculate your billing rate. Not enough of you appear to have learned from it given various conversations I’ve had. It appears the majority of people who actually read it were bottom feeding pimps because now they’ve reverted to asking consultants for their “standard rate.” Most of you knee jerk an answer for what would be a good rate with you able to continue living in your current home working 100% remote. The pimp then responds with something like
“I have this contract in California which can pay your rate.”
Trouble is, you don’t live there. Bigger trouble is you don’t realize there are roughly 5 places in America with a cost of living that high. What you just agreed to is a terrorist billing rate because the only people who would take it are suicide bombers needing a cover story while they assemble their bomb or rent that truck.
I recently was contacted about a DIBOL (DBL) contract in Florida. Actually, I’ve now been contacted quite a few times about it. I quoted a trusted pimp a reasonable rate because I had a need/desire to spend a few months in Florida given I’m overdue to visit friends, family, and former neighbors down there. On-site billing rates for DIBOL, especially DIBOL on OpenVMS are around $300/hr nationwide. They just are. Some charge $200+/hr for 100% remote work. It’s a rare skill. One consulting firm specializing in OpenVMS people that I’ve known for years told me a couple years ago they used to have 5 in their database, but one recently died. They had just spoke to his widow before calling me.
Let me tell you this before you scramble to get an OpenVMS Hobbyist license and teach yourself DIBOL.
First, DIBOL isn’t included, it is now owned by Synergex.
Second, only terrorist fronts advertise DIBOL (DBL) openings on the job boards. You will only be found by bottom feeders and only see contracts posted to exploit illegal aliens and convicted felons. This is especially true when it comes to OpenVMS on DIBOL. These contracts aren’t posted. A good many are routed through Synergex (don’t expect to get the full billing rate or anywhere close to it) or, they are handled by consulting firms with a 20+ year client relationship. These firms have a short list of DIBOL consultants they reach out to when a client reaches out to them.
Several days ago a pimp known for importing terrorists reached out to me about this contract and offered $45/hr on W-2. Somewhere in Florida there will most likely soon be a terrorist faking DIBOL skills while assembling whatever it is they use for their attack.
On a billing rate and time-line related note, a pimp I’ve worked for many times sent me a heads up email about an embedded systems contract in Hood River, OR. They then left for the Independence Day Holiday and I don’t expect to hear more until Monday, if there is any more to hear. You see, I’m pretty certain he reached out to me because the rate the firm mentioned to him would be able to cover my “standard rate.” Shortly after his email I did my usual poking around for hotels and corporate housing. Here are the booking.com results.
You will note that is for 23 nights. You will also note there was only one hotel with 23 nights available. Additional searches showed I could hop from hotel to hotel, about 15 times, but, I wouldn’t really save any money. Let’s do some math. 5330/23 ~ 231.74 per night. So a full month will be
31 * 231.74 = $7,183.94.
That’s just for the hotel. No meals, no health/E&O/Business Liability/auto insurance, and no profit. Remember the rules:
- First 40 hours must cover one month’s food and lodging.
- Second 40 hours must cover all insurance and other home expenses.
- Third 40 hours for retirement account and estimated tax contributions.
- Fourth 40 hours, that’s your profit and fun money. Hopefully you put at least half of it into your brokerage account where you buy good dividend paying stocks and ETFs so you can not have to work long before you need to retire.
Let’s say you diligently limit yourself to $50/day for meals and entertainment. Not easy to do when you live in a hotel room with only a hot plate and microwave. You can’t bake healthy meals like fish because you don’t have an oven. A decent supper in an Italian or Chinese place, without alcohol, will run you $25. Even a lunch you pack and bring in will be north of $10. Let’s not forget those snacks while watching television at night, they count too. So do sodas from the office vending machine. So, $1550 is your meals and entertainment monthly allowance.
7,183.94 + 1550 = 8733.94 / 40 = $218.3485
If you are billing at less than $218.35 per hour, you are losing money.
Shop around for Corporate Housing you say? Oh, I did that too. Don’t get all happy at reading the following response. A good consultant hotels it for the first two weeks in case things aren’t as advertised with the client.
Hello,
Summer is $179 and we won’t have space until July 22. Over 30 nights no tax. Cleaning is $40 upon request.No problem with the chair we can supply but the dining table would be the desk.
Winter rates are $99 per night over 30 nights. Cleaning is $40 upon request.
(31 * 179) + 80 = 5629 + 1550 = $7,179 / 40 = $179.475
Less than $180/hr means you are losing money.
What does your health insurance cost you? Many have greater than $8000 deductibles with their current policies just to get monthly payments down to around $2500. Most auto insurance, unless you have a fly-by-night insurer, bills quarterly, so you have to divide that out and add it in to the second 40 hour total. I know of some families with really high deductibles paying around $8,000/month for health insurance.
Yes, I’m sure the client was more than willing to pay my “standard rate” for on-site work. You can’t even live in your car out there for that.
