Note: this is an opinion post. I am not saying freelancing is bad in general. Just what I think is bad about it from my viewpoint, and why I think freelancing is great to get started with an independent lifestyle but not a long-term strategy
I've been a freelancer/contractor for a decade, 2008-2018.
In my mind the difference between the two terms is just that a freelancer takes on multiple smaller/flexible jobs at a time, and a contractor has just one big client that they bill monthly.
Instead of diluting my answer to the above question, I'll jump straight to saying the bad thing with freelancer/contractor is that you sell your time.
Time is the scarcest resource. Money is just energy. It can be earned, it can be spent.
But time is the only resource that can only be consumed. You can't create new time. You can only save time, avoiding consuming it.
You create a website or a design for client X. You spend 10 hours, you get paid for those hours.
If you don't work, you don't earn.
Your time becomes strictly correlated to dollars. After a while you'll find that you will not go skiing because that'd be
As an employee you don't get this problem, you get different problems. Sometimes being an employee is better. You lose some freedom, but at least you don't bring your work with you all the time.
$LOTS_OF_DOLLARS per hour is fun, but in the long run you'll need a way out.
Instead, you want your income to be separated from the time you work.
Detach your efforts to the money you earn.
It's a hard concept to grasp, and in some cases you might also be too much brainwashed by the society to accept it, and you might be self-sabotaging. "I do not deserve it". "I didn't work hard enough to charge X". That might happen if there is no one in you family or strict circle separating time from money.
If you work in a shop, office, as a driver, delivery, accountant, attorney, all those jobs are tied to time.
Since I read The 4-Hour Work Week and I opened business in 2008 I started thinking "how can I separate time from money?" it's been a constant thinking.
I wanted a "passive income" machine. Something I could create once, and sell for many times, independent from my effort.
Create once, sell twice. Create once, sell twenty times. Create once, sell 1000 times.
I also wanted something that could be highly automated. If you follow this blog you're a developer or you aspire to become one, and we're all for automation. No phone calls, no real-world meetings, none of that.
I tried many things. Nothing worked at first, but I didn't give up and after trying various industries and product types, things started working.
I look back at the freelancing days as a necessary step towards this.
I had to have a way to pay the bills while I searched for the business I wanted. It was not the final step.
That was clear as when I worked as a dishwasher in hotels on the Alps during the summer, as a student. I was not going to do that forever. That was just a phase.
Today I work super hard, mind you. I spend months creating a product, serving my audience, expanding my audience, and selling useful and valuable products to them.
It's not passive income in the sense that I sip margaritas on the beach and do nothing all day.
It is passive income in the sense that I get to sell something months after I last worked on it. I get to sell something 100 times, but I only worked once to create it.
I separated the time I work from the income I generate. That was the kind of business I always wanted to create.
Someone will be a freelancer, trading time for money. Nothing wrong with it if it's your calling. But if it's not your calling, you know there is another way to make a living.