What sort of money do consultants make?

Shoe Box

I know you'd have to be pretty experienced to be a consultant, but I was wondering what sort of cash they can make. I was talking to a guy at work today who is an Oracle DBA with 20+ years, and it seemed like he knew a lot about it. I didn't want to ask there but I can ask here. What might be a reasonable salary for a consultant job like that?

Not that I plan to change to it, just curious.

How does one go about becoming a consultant and be taken seriously instead of applying for normal 40 hour jobs?

techfiend

Depending on his skill level I'd say $40-90 per hour. I work with 2 consultants both I'd say are midlevel with 15+ years of experience. Systems guy who earns $40-60 per for multiple smb clients, he's lucky to put in his max 10 hours a week where I work and an on demand programmer at $60 per.

You need to be able to sell your skills and build a solid network you basically compete with msps in the smb market. You mainly set your own schedule and earn considerably more per hour than an FTE but you have to be willing to risk the instability of being spontaneously dropped (contracts help) and it can really be stressful when work piles up. You also won't get any benefits and are often looking for more but not too much work.

Systems guy would much rather go back to FTE, he's sick of the unstable hours, 10-80 hours a week. For me I'd probably only consider relying on consulting near retirement where you're already wealthy but would like a bit more working a few hours a week.

joelsfood

The best way to move from FTE to consulting is just to do it. There are always companies looking to hire consultants (though you'll get to know your local airport betterthan you might like) and remote consulting gigs can always be found on upwork/freelancer/etc. There are some special skills to being a consultant, as it requires more personal interaction and personal selling, particularly if you work for yourself. But the core technical skills are no different.

I'd probably qualify myself as a senior/principal level engineer, and I bill 120-180/hr remote for any new contracts, and more if I go onsite. That being said, you may have to start at lower prices than you like just to establish a history. I still have some legacy contracts around at lower rates that I signed when I was building consulting experience. That's when being a good customer is worthwhile though, as I periodically cull through my customer base and cull out old contracts, not just based on price, but on whether they're easy to work with.

Just remember though, that if you set out your own shingle for consulting, you're going to have to sell yourself regularly. It's like doing job interviews several times a week, as long as you continue consulting. It can get tiresome

Danielm7

I work with a TON of independent contractors, one of them I work with is a network security engineer. He bills at $80/hr. He does 40 hrs a week and has been there for years. He always jokes that one of the CCIE contractors there gets paid so much more it's crazy. I'm a contractor there now for a few more months but I came in a lower level so I'm supposed to be hired as a FTE and end up getting paid more plus good benefits.

When you see their hourly pay always factor in hour many hours they get, different tax structures, those hours need to be spread over Christmas, Easter, New Years, vacation, etc. It's not always as glamorous as it seems.

Shoe Box

Yes, I'd imagine if they were 1099 contractors, that the money they get is far from their net income, if they have to set aside for taxes and other things.

TheFORCE

I have a friend that works as a consultant. I asked him when he left the company we were working for. He told me this "Lets say the money i make as a consultant for 6 months is the same as the money i would make if i was working as a FT employee for a company" Basically he works 6 months and get a year's salary and the next 6 months he either goes on vacations or looks for other consulting/contract jobs.

kohr-ah

Did it for a while. It pays quite well. I worked for a consulting firm and was payed salary plus overtime.

At that time I made 60k a year plus bonus.

I recently got an offer to go back to consulting and that was 105k per year plus quarterly bonus.

Catch to it is that your work depends on your sales team. Who half the time sell products and solutions that I swear they made up. I've worked 30 hour weeks and I've worked 80 to 90 hour weeks.

The money was good but what I missed out on sucked. Would I do it again? You bet. When my kids are in college and as above said I am more stable and just want the hours and money 'til retirement.

jibbajabba

Money aside, I noticed something else. "Consultant" seems to be the "System Admin" - the amount of "Consultant" roles I can see with a job spec pretty much identical to an Admin / Engineer position is unreal. It seems companies now try to get people in with nice titles ... Speaking of permanent roles here though ..

systemstech

Depends on what you mean as a consultant. There are consultants that are regular (full time) at MSP's. There are also consultants that are contractors.

paul78

joelsfood wrote: »

you're going to have to sell yourself regularly. It's like doing job interviews several times a week, as long as you continue consulting. It can get tiresome

Very true... And it's one of the reasons why I stopped consulting. About 12 years ago when I was consulting, I billed at about 90-150/hour (not including expenses).

Joel offered some good advice. The one other thing that I would add is that consultants that offer value beyond technology staff augmentation will command higher bill-rates. Specialization in an industry lets a consultant apply skills to the actual business problem that needs to be solved. For me, I have always worked in one of the segments of financial services which is where I apply my technology knowledge.

gespenstern

I like consulting, I like challenge, I usually overachieve and outperform, rarely fail. Selling myself and overall communication is the hardest part for me. But still i'm there because being FTE is just too boring, I would die from boredom if I worked for years at the same place.

And yeah, I pay obamacare $1200/month for my family in premiums for a so-so plan, that's a downside compared to FTE.

Currently charge $80/hour*40h/week, probably could have charged more if I was better in selling myself. I'm working on it though, plan to sign up to toastmasters and hone my speech/salesman skills...

Krones

I'm not a full time consultant but I do side work, light-admin / helpdesk work for $70 an hour. That's my current rate. It's simple, my free time is precious and my main job comes first. And I probably won't have the clients that I do have forever at that rate but that's what I asked for and what the clients pay. If was doing AD, Exchange, Databases, Devops, Networking, or Security that rate would go to $100+ but I'm not there just yet.

beads

Highest verbal offer this year as Principle Security Architect role has been a staggering $150.00/hour my time. Not billable to someone else. That's roughly $320,000 a year. For that you can afford $1200 ACA premiums.

Now for that level of work you will need to perform on a near miraculous basis every hour of the day, every day. But, its fun to think of making that type of money (again) but not so the pressure involved as well. Oh and there will be that living in the office thing to deal with but that's often associated with the high end consulting lifestyle as well.

Outside the stratosphere salary you can expect anything from 30-80 an hour for security work. Depends on the needs of the client and local availability.

Be careful for what you wish...

- b/eads

Network_Engineer

I am a contractor and I bill at $75 an hour + time and half for overtime. Already at $127k for the year. On track for $187k annual. 100% remote contract.

Slowhand

There have been some very good answers on this thread, but the long and the short of it:

You can get paid exactly as much as you convince your clients that you're worth.

Experience increases your perceived worth. Certifications and other credentials increases your perceived worth. Proof of concepts and demonstrations improve your perceived worth. Articles, books, and other published work increases your perceived worth. Your reputation increases your perceived worth. The demand for your work is a HUGE factor in bumping up that perceived worth. See the trend?

GreaterNinja

I've been in consulting for about 10-11 years now. Consultants typically make 15-60% of the hourly bill rate that headhunter/msp/vendor service provider charges. If you have your own company (LLC, INC, or sole proprietor) then you can charge the full rate or do c2c or 1099 with another head-hunter or direct client.

The last consultant company I worked for charged $58/hour for a desktop engineer and $187.50/hr or $1500/day for each network engineer. Needless to say I decided to step up my game to one day buy my own private island.

cs8400

Thinking about moving into consulting in the near future as well... Currently I'm a full time employee w/a 401k. What do most consultants do in regards to saving for retirement? IRA?

GreaterNinja

It just so happens last year I worked my 9-5 and also ran a successful business last year. If you have your own business you can do $18,000 a year on employer contribution - 401k + employer match 401k. The total combined limit of both is 53k for 2015. So you can potentially have 53k (max) tax deferred on 401k plans for 2015.

Please note you can say you are both the employee and employer of your company :P.


Alternatively there are IRA plans that range from $5,500 to $53,000 as well. Most of them have requirements stricter than 401k plans and if you want to hit 53,000k/yr on an IRA you would have to make tons of money. Lastly IRAs typically will not return as much over the long term compared to 401k because its a lot harder to contribute more money per year to an IRA versus a 401k per year.

edit: there are many limits on tax deduction for IRA vs 401k plans. I'm not an expert...just a guy who did research. Please google or consult a tax specialist for more info

techfiend

Can you inform on how to contribute more than $5500 while making a lot of money?

I've always been told and read once you make so much you can't contribute to IRA's.

iBrokeIT

techfiend wrote: »

Can you inform on how to contribute more than $5500 while making a lot of money?

I've always been told and read once you make so much you can't contribute to IRA's.

SIMPLE IRA.

There are serious differences between Traditional, Simple and Roth IRAs. You definitely should consult a professional if you dont know what you are doing.

techfiend

I've always been an employee, thus never suggested a simple IRA. I get the gist of a simple IRA but I think it's kind of strange a self-employer making 150,000 can get so much more retirement support then an employee making the same amount but I also disagree with the roth/traditional maximum income. Can you be an employee with a side business and have a simple ira?

I've been told by everyone I've talked to, including financial advisers to focus on 2 things; 401k up to the match and maximize roth (taxes are unlikely to reduce over time). Then contribute more to 401k if you can but it's the least potential gain. Kind of clashes with GreaterNinja's post but I understand what he means from the self-employed side.

pramin

GreaterNinja wrote: »

If you have your own business you can do $18,000 a year on employer contribution - 401k + employer match 401k. The total combined limit of both is 53k for 2015. So you can potentially have 53k (max) tax deferred on 401k plans for 2015.

Please note you can say you are both the employee and employer of your company :P.

This is known as a SOLO 401K. I'm planning to move from a SEP-IRA to a SOLO 401K. Besides the ability to shelter more money under a SOLO 401K; there is more flexibility with a SOLO 401K. For example you can borrow against a SOLO 401K. With the SOLO 401K you can also have a ROTH provision as well.

Also depending on the financial institution you go with there will be different provisions.

Definitely do your homework.