What is the realistic income?

[malvolio]

That's what I'm slightly nervous about, I want to ensure my contract lasts long enough to build a large war chest. This is an initial 6 month but been told likely a multi year project for an investment bank. 6 months isn't long to build a decent war chest if they change their minds.

That rather depends on a load of variables that only you know: rate, expenses, minimum necessary personal income and so on. Initially you have to concentrate on getting to the point where a few months on the bench doesn't matter at all. If you ignore your gross income and take out what you need rather than what you would like to have, the bank balance in YourCo will build quite quickly


But if you're worried about being out of work on short notice, don't go contracting.

[northernladuk]

But if you're worried about being out of work on short notice, don't go contracting.

Totally this.

[Sigur]

Totally this.

Only worried as this will be my first venture in contracting and have no warchest

[malvolio]

Only worried as this will be my first venture in contracting and have no warchest

Same answer applies... Taking a risk is part of the game.

[HugeWhale]

I used to break it down by day. It's not accurate but it was helpful for me

Monday – I’m working for the taxman

Tuesday – I’m working for the business
(to cover business expenses and overheads, plus wages when on holiday from the client. I was working away, but even if you’ve no overnight stays all that travel, accountancy fees, set-up fees etc. add up. And you will need a holiday at some point yet will still draw a wage.)

Wednesday – I’m working for me
(day-to-day living: food, council tax, mortgage, haircuts (I have a long flowing mane and it costs me a fortune in haircuts), huge alcohol bill etc.)

Thursday – I’m working for the war chest

Friday – This is fun money
the car, the Harley, the boat, the exotic trip, the strip clubs, whatever takes your fancy.

[lukemg]

I used to break it down by day. It's not accurate but it was helpful for me

Monday – I’m working for the taxman

Tuesday – I’m working for the business
(to cover business expenses and overheads, plus wages when on holiday from the client. I was working away, but even if you’ve no overnight stays all that travel, accountancy fees, set-up fees etc. add up. And you will need a holiday at some point yet will still draw a wage.)

Wednesday – I’m working for me
(day-to-day living: food, council tax, mortgage, haircuts (I have a long flowing mane and it costs me a fortune in haircuts), huge alcohol bill etc.)

Thursday – I’m working for the war chest

Friday – This is fun money
the car, the Harley, the boat, the exotic trip, the strip clubs, whatever takes your fancy.

Quality !

[MattZani]

That's what I'm slightly nervous about, I want to ensure my contract lasts long enough to build a large war chest. This is an initial 6 month but been told likely a multi year project for an investment bank. 6 months isn't long to build a decent war chest if they change their minds.

Investment bank? Might be worth factoring in the standard 10% rate cut take it or leave kind of thing that could happen at any time during your contract.

[uk contractor]

Investment bank? Might be worth factoring in the standard 10% rate cut take it or leave kind of thing that could happen at any time during your contract.

....and or the 6 months might turn out to be 6 months or less only as sometime down the line the original project gets either cancelled or finishes early due to the funds drying up! Its rare for inv banks projects to run several years nowadays most get cancelled early.

[MattZani]

Only worried as this will be my first venture in contracting and have no warchest

There's another thread about warchest.

Seems like there's a good amount of people who jumped into contracting with almost no warchest at all.

Also worth saying that most of these people started contracting many years ago, when the market was very different from now.

At the end it all comes down to your risk aversion rate and how confident you are about your skills.

[man]

Regarding 'take home'*, a lot of contractor accountants will be able to provide an illustration for free - i.e. pre-engagement.

£400/day over 26 weeks (i.e. half a year) = £52,000 gross (excluding VAT). Assuming you don't get a rate cut or termination, potentially at no notice - and before taking into account any tax, expenses, other overheads etc. Or even worse, I've seen a recent thread on here where someone was terminated through no fault of their own before they even turned up on site.

I suppose it depends on what the consequences are of the above, only you know that and can decide if you wish to take a calculated risk on it - in business to business contracting you don't have employee rights and protections against sharp business practises from your client (or agent) - so eyes wide open and at least read everything you can on the subject before committing to it.

* = Oversimplification, but you get the idea.