Simple approach which while took some time, did work great for me in long term:

- register on odesk.com and elance.com (same owner, but slightly different projects there)

- start from very low hourly rate to build history and feedbacks. Make sure that every client is super happy and leave only 5 stars. Try to focus on small projects in the beginning (you don't want to get stuck on large project with low hourly rate, and bumping hourly rate in the middle project both unfair and hard to do)

- As you get projects closed (also reason to start with small project - to close these quickly) follow with client to make sure he leave nice review. In the very beginning you don't want really to focus on relationship, since these clients unlikely be able to pay higher rate in future, but you have to get to get project to complete client satisfaction.

- Bump hourly rate few dollars every week/months/x projects/x dollars billed. You need to find perfect formula here for yourself. Good signal to bump rate - when you get offers to work on project and you don't feel like you will be able to do it 'cos of a time constraints.

- If project does not satisfy your curiosity or feels like a BS project (this all will be based on what you personally like and do not like to do) - never decline projects, but instead make a "fuck you bid", where you multiply your "normal" bid by x2 / x5 / x10 (again, you will need to find perfect formula here). Idea is that you never say "no", but instead make client say "no" or get paid a lot for doing something you do not want. This also makes you look more expensive and your work more precious.

- Don't be afraid to bump rate. It is a bit contradictory, but in my practice very often well paid work came with very reasonable clients, and work where project was on very tight budget came with manager-jerk. Somehow when you charge a lot, clients respect you more.

- Do all of this until you reach point where total revenue will start dropping off or you find yourself without necessary projects. It is very important to keep in mind that 100% "employment" should not be main driver behind hourly rate pricing. You need to find optimal balance of number of hours you need to spent on projects vs. your hobby project or self-education. It is MUCH better spend 20 hours a week at $50/hr vs. 40 hours a week at $25/hr.

Hope this helps :)

This is one of the most important questions in all the open source world, and yet, instead of one of the big-name writers of the hacker world bringing it to the floor, it comes in the form of a question from someone hoping to earn $15-$20 an hour. It makes me sad.

gdiocarez: First and foremost, thank you for breaking the silence on this.

As for an answer: So, the world is weird. I generally bill $185 an hour as a spot rate. I have fairly little problem finding steady work at $100 or so on a steady basis. I tell you this because I think it's fairly typical for someone living in a major city in the US.

My hope, and I hope everyone's hope, is that the world will generally equalize around this range, or even higher. I have observed again and again that, each time I or a colleague makes a contribution of value, we create a dozen or so opportunities for like contributions.

Unlike the fossil fuel economy that characterized the industrial era, I surmise that the information age is somewhat sustainable as an exponential curve of economic possibility. This is a radical viewpoint I'll warn; many of my (otherwise seemingly reasonable) friends fear that "the music will stop" unexpectedly and that today will be one of "the good old days."

The truth is: nobody that I know knows the answer to your question. Price yourself aggressively and work hard. I can tongue-in-cheekly advise you to try to be lucky. So far, being born in an economic powerhouse (and in an economic, racial, and social position of privilege) has worked for me.

1.01^365 = 37.8

0.99^365 = 0.03

This one thing always motivates me to put the extra effort in everything I do. Good luck mate :-)