The 4 Stages of Freelancing Explained | Part 2

In the second installment of “The 4 Stages of Freelancing,” Austin explores the last two stages: Lifestyler and Diversifier. He highlights the motivations, challenges, mistakes, and questions at each stage, as well as the key breakthroughs and financial goals. This episode will help you figure out where you currently are in your journey and what to focus on next.

January 12, 2024
This post may contain affiliate links. Please read my disclosure for more info

Disclosure: This episode is sponsored by CrowdHealth, and also includes affiliate links which means I may earn a commission if you make a purchase through my link. All opinions are my own.

In this continuation of “The 4 Stages of Freelancing,” Austin L. Church explores the last two stages: Lifestyler and Diversifier. After they’ve navigated through the Moonlighter and Hustler phases, freelancers reach a level of maturity where challenges become more complex. Meanwhile, opportunities for growth and personal fulfillment expand.

Austin highlights the motivations, challenges, mistakes, and questions at each stage, as well as the key breakthroughs and financial goals.

Are you a Lifestyler eager to earn the same or more while working less? Or are you a Diversifier interested in creating new revenue streams?

Regardless, this episode will help you figure out where you currently are in your journey and what to focus on next. 

Key points

  • Lifestylers overview (01:53)
  • The motivations for Lifestylers (04:35)
  • The mistakes for Lifestylers (05:27)
  • The questions for Lifestylers (07:23)
  • The main breakthrough for Lifestylers (7:56)
  • The main financial goal for Lifestylers (08:16)
  • Diversifiers overview (10:35)
  • The motivations for Diversifiers (12:35)
  • The challenges for Diversifiers (13:49)
  • The questions for Diversifiers (17:07)
  • The main breakthrough for Diversifiers (17:46)
  • The main financial goal for Diversifiers (18:08)

Notable Quotes

  • "We freelancers and consultants can get so fixated on winning the next project, staying ahead of bills, and achieving financial stability that we inadvertently become creative workaholics."
  • "The last thing any freelancer should do, any consultant should do is blindly copy someone else."



[00:00:00] Welcome to the Freelance Cake Podcast. I'm your host, Austin L. Church. The goal of this show is to help full-time, committed freelancers get better leverage.

[00:00:13] As the sworn enemy of busyness and burnout, I have no desire to see you work harder. Instead, I reveal the specific beliefs, principles, and practices you can use right away to make the freelance game more profitable and enjoyable. So chill out and listen in, because the best is yet to come.

[00:00:35] This episode of Freelance Cake is brought to you by CrowdHealth. Healthcare in the US is complicated, confusing, and highly personal. Insurance premiums, deductibles, and copays can get really expensive, especially for freelancers and consultants who don’t have an employer paying for anything.

[00:00:54] Case in point, here’s what a UX consultant wrote to me in an email: “My biggest headache is currently health insurance. It’s so expensive for a family of 4 with 2 self-employed parents. Really tough.”

[00:01:08] That is exactly why my family of 5 switched to health sharing. Over the last 9 years, my wife and I have been through 2 births, a broken arm, 2 surgeries, emergency room visits, MRIs, allergy shots, and a disability diagnosis. Get this, we’ve saved over $60,000 in out-of-pocket costs without sacrificing our quality of care.

[00:01:32] If you’re not familiar with healthcare crowdfunding. I hope you’ll take this opportunity to educate yourself. I’ll drop some links in the show notes, or you can head straight to and use code “freelancecake” (that’s just one word) to get 3 months for $99. Go to

[00:01:53] I’ve coached a bunch of these folks who remind me of me circa 2017: You’ve hustled, and from the perspective of Moonlighters and Hustlers, you’ve made it, you're full-time, you've replaced the after-tax income at your last 9-to-5 job and then some that “Can I do this?” question no longer hangs in the air. You've proven to yourself and Bobby Booger's face that you can do this.

[00:02:23] That's not to say you've figured everything out. Oh, no. The cracks still show. If anything, the challenges have gotten bigger, not smaller. New levels, new devils. And if you're honest, you tow the borders of burnout more often than you'd care to admit. Sometimes you feel like a hamster on a wheel. Find new project. Deliver project. Get paid. Around, it goes.

[00:02:50] You've been fortunate, you know that, and you're grateful, you really are. Yet you can't help but wonder “Now, what? Is it 10, 20, or 30 more years of this?” Do I just keep raising my prices to meet supply and demand? Do I launch a digital product? Do I tell myself to be content?

[00:03:14] We freelancers and consultants can get so fixated on winning the next project, staying ahead of bills, and achieving financial stability that we inadvertently become creative workaholics. When you've been the freelancer who knows what it's like to have scary months (and I certainly have been that guy) you may keep saying yes to everything compulsively, automatically.

[00:03:44] Surely a little more cash in the bank will finally mute the anxiety and scarcity mindset that have squawked in your ear for years. You tell yourself just one more month's worth of savings in the emergency fund and then I'll take my foot off the gas and start enjoying my life a bit more. Just one more debt paid off or big purchase lockdown and then I'll start breaking up with the bottom 20% of my clients. I’ll start passing up opportunities and I'll start, well, you know, doing whatever it is that normal balance people do when they're enjoying themselves. Go on more vacations, grow basil, and finally organize the garage. Admittedly, I'm talking to myself here, but can you relate?

[00:04:35] The core motivations for Lifestylers are more subtle and have shadings of fear, hope, and everything in between. They include avoiding grinding it out with smaller, less lucrative projects, finding better work-life harmony, and not letting work (even if it's often enjoyable) crowd out other parts of life that are just as important, learning how to make the same or more income in less time, finding out what's next because you're a multipotentialite who doesn't want to do just one thing and may not want your current and ostensibly successful freelance business forever, getting more support, delegating effectively. That's a thing, right?

[00:05:27] The common mistakes go hand in glove with motivations and their attendant fears. For example, playing it safe now because in a sense, you've “made it” and don't want to accidentally blow up the livelihood you've already got. You're more tentative and less decisive now than when you were a Hustler and had nothing to lose by throwing stuff at the wall to see what's stuck. Sustaining your business with predictable work to support your lifestyle, but continuing to accept projects you find tedious, stressful, or unchallenging. Creating freedom for yourself, but never spending it. You take less time off now than when you were an employee, and when you do go on vacation, you worry about your business. While you're supposed to be away, you cheat and check your inbox or you take a call to serve the client.

[00:06:21] You don't really honor your vacation and don't gain the benefits of truly unplugging. You've developed expertise and because you're good at what you do, you find it difficult to believe someone else could do it as well as you. That belief makes it difficult for you to delegate, even though not delegating is part of the problem of which you're well aware. The stuff starts to get kind of meta, you know. So you still spend too much time on $10 an hour tasks, not $100 or $1000 an hour tasks.

[00:06:58] Experienced as you are, pricing can still be a struggle. You want to be compensated for all your skill, experience, and expertise, but you're often up against less experienced but cheaper competitors. Some clients use price for comparison which isn't fair, but you don't always have a chance to explain why you're worth it before they make a decision.

[00:07:23] The questions at this Lifestyler stage get more nuanced and existential. What now? What do I really want? What do I want my life to look like? How can I make my highest and best contribution to my family, community, and world? You start to look for ways to diversify your income because no matter how high you take your prices, freelancers and consultants still trade time for money. You want to weaken that link between the two.

[00:07:56] The main breakthrough for Lifestylers is getting better leverage through strong positioning, specialization, juicy offers, value-based pricing, always be marketing practice, a healthy pipeline, well-defined processes, and deliberate mindset upgrades.

[00:08:16] The main financial goal for Lifestylers is making the same or more money in less time and seeing less fluctuation in their earning from month to month thanks to strategic pricing and consistent marketing. Consistent income creates a flywheel of paying oneself with “old revenue,” saving more, becoming more selective with the clients and projects you take on, and feeling more satisfaction overall with work, earning, and life. After another quick word about our sponsor, I'll keep going with this.

[00:08:54] Healthcare crowdfunding is a model a lot of people in the United States are still unfamiliar with. Basically, instead of submitting your medical bills to an insurance company, you send them to other people and those people pay a share of your bill. Then when they have medical bills, you reciprocate.

[00:09:13] And thankfully, there are health-sharing memberships like CrowdHealth that facilitate that whole process and make it easier and even support the process with some really good technology.

[00:09:25] So you continue to go to whichever healthcare providers you prefer, you negotiate often significantly lower bills because you’re cash pay or private pay and then everyone benefits because instead of all of the inefficiencies and extra costs of the insurance industry and insurance companies, you just bypass that and you crowdfund your medical bills.

[00:09:52] So if you haven't already, go check out CrowdHealth. Go to On the home page, you can learn more about the model and I do want to reiterate that my family has had a crowd-funding healthcare membership for nearly 10 years now. We're huge fans of this model because we've saved conservatively over $60,000. So again, go to, put in promo code “freelancecake” (all one word), and you will get your first 3 months for $99. That's it. All right. Now, back to this sweet, sweet slice of Freelance Cake.

[00:10:35] Diversifiers. This is the stage where I am now. I've experimented with the three primary ways that freelancers expand their businesses beyond selling their creative skills: consulting with a value-based pricing model, scaling up into a lean agency with a team of contractors and/or full-time staff, building an audience and creating one too many products and services to sell.

[00:11:05] Of course, Diversifiers like Lifestylers are interested in more than money, though a certain amount of money does hit a pressure release valve. According to a landmark study from Princeton University, the number is $75,000 or $100,000 adjusted for inflation. But what happens after you pass that $100,000 mark, you've covered the necessities and some niceties, how do you think about your work and career?

[00:11:39] Diversifiers start optimizing for less dense calendars with more unclaimed time. Time to draw, go on field trips with the kids, or travel without squeezing in productivity around the edges. There is more to life than work and more to work than money. Diversifiers also start optimizing for impact and true fulfillment, things like service, impact and “Whatever happened to that children's book I wanted to write?” come back into focus. We shift from “How can I make this work?” to “What do I want my days in life to look like?” and “What kind of work would I do for free?” It's no surprise that many freelancers who reach this stage want to give other freelancers a hand up through teaching, training, and coaching.

[00:12:35] The core motivations for Diversifiers are as follows: Self-respect blended with creative license. Either clients let me do what I'm good at or I'll leave and find a client who will. Time affluence. Life’s short and I want to do other things besides build my client's empires. Diversified income streams. Sure would be nice to be less dependent on service income. Desire to get better leverage or better results with less effort.

[00:13:08] This manifests in both more tactical short-term decisions to shore up positioning and create juicy offers and more strategic long-term decisions to build an audience and own a direct relationship with them. For example, by building an email list and sending a regular newsletter. Finally helping peers find their way. Once your mindset starts moving from scarcity to abundance, you realize just how fulfilling it is to inspire, encourage, and equip the next wave of Moonlighters, Hustlers, and Lifestylers.

[00:13:49] The core challenge for Diversifiers is effectively starting over. Diversifying income streams and optimizing for time and better leverage, not more short-term cash means embracing new business models. Your rich varied experience and hard-won expertise don't necessarily translate as you go from being the seasoned freelancer consulting veteran to being the rookie creator, consultant, or agency founder.

[00:14:20] What your business needs from you changes too. The uncomfortable responsibilities and lackluster results can be disorienting and discouraging. “I'm good at [insert freelance work], so why aren't I getting better results with [insert next iteration of your business]?”

[00:14:41] A temporary drop in freelance income is natural as you devote more time and attention to developing the business rather than simply delivering projects. However, Diversifiers often misinterpret this lagging indicator. They assume they must be doing something wrong because they've started making less money, not more. Despite our well-developed skills and domain expertise, Diversifiers make all kinds of mistakes while stepping out and up. Not designing and executing experiments for what could be next because you've got so many competing priorities and because honestly, it's hard to feel like a rookie again.

[00:15:25] Building courses and other digital products before you validated the offer with real people in your target audience. Taking your eye off the marketing ball and/or letting communication and client experience suffer as you grow your audience and product business. Starting new projects and ventures without getting the support you need from a virtual assistant. Trying to build a team and delegate before you've clearly defined your processes and created standard operating procedures.

[00:15:58] Overestimating how quickly you can build an audience and replace service revenue with nonservice revenue such as ads, affiliate commissions, sponsorships, and product sales. Needing to be involved with every aspect of every project because no one knows it and can do it better than you, right? And then becoming the bottleneck that prevents growth. Struggling to differentiate between reversible and irreversible decisions, not making reversible decisions fast enough, and developing a backlog of unmade decisions that clog up the work.

[00:16:35] Finally, imposter syndrome, surprise! You didn't think it would disappear, did you? Adroit management of all the details got you here. But that very same control which served you so well now becomes the obstacle to growth. Unless you can trust others and create systems and processes that maintain quality and client experience without your constant involvement or oversight, you block your own potential.

[00:17:07] The questions at this stage have some of the same existential timbre as the questions Lifestylers ask: What do I want next? What is my zone of genius? What's most important right now? What do I need to start saying no to? They can get more tactical too. Who can do this for me? You must let go before you can reach higher. You must decide which you want more of, the comfort of control or the thrill of the entrepreneurial adventure, your own realized potential, and yes, a lot more money.

[00:17:46] The main breakthrough for Diversifiers is getting leverage through consulting engagements, having a team that functions as an agency, and/or packaging up your knowledge and process sawdust as digital products. Once you've tasted leveraged nonservice income, you can't untaste it.

[00:18:08] The main financial goal for Diversifiers is replacing a big chunk of service revenue with nonservice revenue. High-ticket consulting engagements may give you the warm fuzzies but generating $1,000 or $10,000 with an automated email sequence feels even better.

[00:18:26] Career progressions for freelancers and consultants don't stop here. In his essay, The Ladders of Wealth Creation: A Step-by-Step Roadmap to Building Wealth, Nathan Barry shares more of them. Barry went from freelance design to digital products to founding and scaling ConverKit, an email marketing platform that is now valued north of $100 million.

[00:18:52] My friend Stewart started an e-commerce company that sells physical products. You may have no interest in building a software company or selling physical products. You may love your freelance work and be perfectly satisfied with selling services. That's terrific. Seriously. And that's a final point I want to leave you with: the last thing any freelancer should do, any consultant should do – Diversifiers included – is blindly copy someone else. Were I to airdrop my map directions and destination into your temporary camp in an alpine meadow, those wayfinding tools might help get you moving at first, but they'd eventually slow you down because you and I want different things. We want to end up in different places.

[00:19:44] So as we close this episode, I want you to consider which progression describes you best right now: Moonlighter, Hustler, Lifestyler, or Diversifer, and what breakthrough do you need right now? I hope you'll take 15 minutes. I hope you'll consider what we've explored in this episode. I hope you'll get some clarity. See you next time.

[00:20:11] Hey, before you go, a quick reminder, be sure to check out the business redesign group coaching program. It's fundamentally about revenue design and lifestyle design and it's based on the $300K flywheel framework that I have developed over the last 15 years of trial and error and nearly $2 million earned as a creative entrepreneur.

[00:20:35] Instead of feeding more and more time into the business machine, you can join me and other like-minded freelancers and consultants as we learn how to think like a CEO, not a technician, stack up the right advantages, and find our income-lifestyle sweet spot. Go to to learn more about business redesign and apply. My friends, the best is yet to come. See you in the next episode.


The only weekly freelancing email you don't want to miss...