While the college student with a Bachelor's or Master's degree will have the advantage over self taught freelancers in the physical corporate world, since corporations like to see degrees, on the Internet, the college graduate can be at a severe disadvantage. The reason for this is because the cost of their education must be factored into the prices they charge for their services, and when they come face-to-face with either a freelancer who is self taught (who didn't spend much money developing their skills), or a freelancer living in a country where the costs of living are lower, these individuals will often not be able to compete.
A number of recent statistics indicate that the typical college student owes approximately $19,000 in student loans. Once these students graduate from college, they are required to pay this money back, and this will take a toll on the income they earn. Because of this, the rates they charge for their services will often be a reflection of the amounts they owe on their student loans. If you don't owe $19,000, it should be obvious that you can offer your services for a much lower price than these people, since you don't have to spend any money towards the repayment of debts.
It is for this reason that we recommend spending the least amount of money possible in the acquisition of skills, because if you spend less developing your skills than your competition, then this means your prices will be lower, and if your prices are lower, this means you will get a higher volume of customers. In addition to student loan debt, you will want to eradicate all forms of debt if possible. This includes credit card debt, car loans, and any other type of loans you may have. You don't want too much of your income going back to pay creditors, because this will reduce your long term wealth.
You will also want to make sure that the cost of your housing, energy, and food are much lower than the average for your country. When we use the statement “keep your costs of living lower than your competition,” this doesn't mean that you need to live uncomfortably. Your goal must be to maintain a high living standard while spending as little as possible at the same time. If your costs of living are lower than average, then this means that the prices you charge for your services can be lower as well.
When you're just starting out as a freelancer, it may help to offer a low introductory price to potential clients so that you can get them in the door. Many lawyers use this method, and it can work equally well for you. Some lawyers, in order to get clients, will charge a small introductory rate, a rate much lower than their usual rate, in order to speak with you for a given period of time in order to determine whether or not they can take your case, as well as the strength of your case.
This arrangement works well for both parties, because you get to pay a low price initially in order to determine whether or not you're comfortable with the lawyer, and the lawyer gets you in the door, which increases the likelihood that he or she can get a lucrative case. Additionally, you may refer them to others, which will allow their client base to grow. While it is often impossible for someone in the U.S. to keep their costs of living as low as someone living in a developing country, reducing your costs of living will not only allow you to offer lower prices, but you get to keep more of the money you earn as well.