... thats fine IF you can even get a contract! For unemployed contractors like me have long since burned through any slush funds.

"Many contractors will see this cash float as something that can be put to good use paying off the mortgage, buying an investment property, or investing in the stock market. You should remember that, while these can be good investments, with high reward comes high risk."

Contracting is a high reward with high risk operation in it's own right... I think what people should be doing is weighing up the risks over benefits more carefully before they embark on anything, inc the big cars, big house and expensive wines.

Whilst a slush fund is desirable in it's own right investing the extra money into things such as a mortgage will provide a very high return on your money. Lets face it, no way a term deposit will give say 7.5% return, and yet investing extra money in the mortgage will do just that in the less interest your charged over the 30 years.*

If you have a redraw facility or at least a facility to put on hold your payments whilst your out of work that extra money is working harder for you earlier on and is yet providing a safety buffer for you at the same time.

The other trick I have learnt as a contractor, ensure that you enjoy life, but also ensure that you can continue enjoying life if you had $10K less a year...

Just finally the third trick is be friends with everyone, don't get enemies in your workplace (don't be a doormat either however) because you never know who will be on the interview panel for your next contract.

BTW I worked as a permie for about 2 and a half years before been shown the door. To me a contract is the same as permie except I have a date that I know I'll be shown the door rather than wondering "is this the day???"

* I didn't think of this, I have a family member that used to be an accountant that has told me some of the tricks for "building wealth", they probably do work because they themselves are very well off and they themselves followed the advice...

Here's another thought, though. What if your contracts involve shuttling between cities? If so, 1 year of savings might still not be enough to handle it all if ever you get a considerable downtime between contracts.

If your having to travel from city to city eating into your savings maybe you should re-evaluate your life and lifestyle. There is only going to be so long that your savings will support you, once that is gone your more than screwed.

Do you really think that a big business will continue with a method of thinking or operating if they are having to use their saved money to support their business??? Of course not, other wise they will become bankrupt and no longer a business...

You need to make your that your life is sustaniable without relying on your saving to keep going... As a contractor this is twice as important...

The IT industry is extremely poor for contracting at present. Current rates are at about 75% of what they should be and even if you wanted a full-time position, you are unlikely to find one with 80% of positions being contract.

How did I work out that rates are at 75% of where they should be? If the company you work for pays $100k p.a., the contractor rates should be about $100-$110 p.h. This takes into account the holiday pay, sick pay, tax, super, insurance and coverage for down-time.

This rule of thumb has been used across industries for years and can be shown to be true when broken down to its components.

The problem is, agents are stepping in between the companies and the contractors and pushing the rates down. The company get a single stop contract shop at reasonable rates (often lower with day rates becoming common) and the contractor gets, um, uh, well, not sure!

If you ask the agent, they sell your services and take a percentage for doing it. I though I was still selling my services but only now to the agents for less money so I'm not sure what they are doing for the contractor.

Are there any agents out there who can tell me what they provide he contractor?

> Are there any agents out there who can tell me what they provide he contractor?

I'll tell you what the agency provides - the contract opportunity in the first place. If it wasn't due to our contacting you in the first place to present this new opportunity to yuo on a platter, then there is a big chance you wouldn't have known about the role in the first place.

What does the agency provide?

> Are there any agents out there who can tell me what they provide he contractor?

--- I'll tell you what the agency provides - the contract opportunity in the first place. If it wasn't due to our contacting you in the first place to present this new opportunity to yuo on a platter, then there is a big chance you wouldn't have known about the role in the first place. ---

Um you sure about that, in some cases the agency is the only one who is allowed to provide the contract due to exclusiveness clauses in contracts between clients and agencies, so if we want the contract both us and the client has to use you guys...

If the agencies didn't exist contracting still would... You guys provide a link between contractors and clients, if you guys didn't exist contractors would have to find their own contracts and clients would have to find their own contractors, but this would happen without much difficulty... (Gee how hard is it to put an ad on seek)

Also don't BS to us about providing it on a platter, if it was provided to us on a platter we'd be the only contractor your putting forwards and we wouldn’t even have to worry about that pesky interview… You once again provide a link between client and contractor no more, the final sale is still done by us contractors, it’s also this final sale that makes the client decide which recruiter they will use, trust me, clients defiantly have their favorite recruiters…

DH don’t fool yourself thinking your irreplaceable (I’m assuming you’re a recruitment agent) if you didn’t exist the contracting market would still be there and thriving…

BTW I’m not normally so anti recruiter but DH’s post was basically self righteous BS…

Let's adress a few of your points :

>in some cases the agency is the only one who is allowed to provide the contract - my point exactly, the clients deal with us - not direct to you, therefore you would never know about the opportunity if we never contacted you.

>If the agencies didn't exist contracting still would - a stupid comment and I bet I'm in a job and my recruitment consulting skills are required a lot longer than you are.

>the final sale is still done by us contractors- totally incorrect. When you walk out the door of the interview, the final closing of the deal is done by us. We can massage a deal into any form that we wish to choose. How much you get paid, how much the client pays us, the margins we make, what contractor they eventually choose. Unless you have a rare skill - do you think you would be the only contractor we would put in front of the client for the role ? Of course your interview goes a long way towards the placement (probably 80% worth), but the final deal is struck by us and we then offer you the role under our terms, our rates & our contracts.

Perhaps I sound very harsh, but these are the truths of contracting positions through agencies. Good luck to you if you can find roles direct with the clients, but with the IT shortage of candidates happening (yes, we spread that rumour at every opportunity we get), more clients sign their entire recruitment process over to us each & every day.

Ok even if the final sale is not done by us contractors lets see how far your industry goes if us contractors simply threw the interview away, you'd go no where, don't get beyond your own ego, if us contractors stopped playing ball you'd have nothing to offer to your clients...(I know this will never happen but just for arguments sake)

And yes there would still be a contracting industry with out recruitment agents, we'd have to find the contracts ourselves but it can be done and there are tons of industries where contractors have to advertise their own services and chase their own clients (my dad-inlaw for one)...

Don't try and prove your existence by giving your ego and us BS about how you help us by giving us a silver platter with job on it... Agents are there to provide a link between contractors and clients, you guys do make it easier for contractors and clients to operate (I currently use an agency) but I wouldn't cry for a second if you guys no longer existed, I like all other contractors would simply get on with the job and start finding our own clients...

>If the agencies didn't exist contracting still would - a stupid comment and I bet I'm in a job and my recruitment consulting skills are required a lot longer than you are.

one quick question - WTF are you offering your clients if my skills (or anyone elses for that matter) as an IT contractor are not longer required???

Got the name and subject mixed up above

Sorry...

Agencies offer the jobs up on a silver platter eh? err ok if that's what you want us to believe. Yes I agree agencies are good to provide the initial connection, but after that they get paid to do sweet bugger all which is why after the initial 3 months I ditch the agency and go with the company directly... usually govt departments dont care if you do this, the ITS 882 contract the agency has with them protects the contractor.

Plus where do agencies get off paying a contractor $40/hour and the agency gets $60-70/hour now where the hell do you get off taking $20/hour for acting as an employer?? You have to wonder how the agencies can afford such luxury offices in the best buildings in Sydney???

Don't kid yourself, agencies are there for employers not contractors... if companies took the time to find their own people (which more and more of them are) they'd get more value for money.

BAH! I think you guys are forgetting something! SAVE YOUR MONEY, and if you STILL want it on hand, at call, and will NEVER go DOWN! Keep your years income in a HIGH INTEREST savings account, alot of banks offer these at 5%-6% interest. So that way it's STILL earning some okay money on itself, it'll never go down, only up, and will be on call whenever the need arises.

Two problems solved (hopefully).