These days, everyone's looking for ways to make more money. If you've lost your job or just need help making ends meet, you may have considered doing freelance work to earn a few extra bucks. You're not alone. A recent ABC News story said freelance/contract workers now make up nearly 30% of the U.S. workforce. In the same story, Sara Horowitz, founder of Freelancers Union, said the organization's membership has doubled in the past two years. (Freelance work is a way to escape the daily grind - but don't ignore the added responsibility that comes with freedom. Check out Freelance Careers: Look Before You Leap.)

IN PICTURES: 6 Hot Careers With Lots Of Jobs

Freelance Arrangements Can Have Their Perks
Freelance hours tend to be flexible, and for some jobs, you can work in your pajamas if you like. Some good freelance opportunities are out there and pay a decent rate, but there are also many work-at-home scams. And then there's the gray area in the middle – jobs that are legit but may not be worth your time and energy, or jobs that require an upfront investment of money or supplies on your part. (From pyramid schemes to envelope stuffing, many scams masquerade as legitimate part-time work. Learn how to Recognize And Avoid "Work At Home" Scams.)

Splitting The Risk-Reward With Freelancers
"With the recession, we've seen an increase in freelance jobs where the employers want to split the risk-reward with the freelancers," says Sara Sutton Fell, CEO of, a site that lists freelance and telecommuting opportunities. "It makes sense that employers are trying to survive a tough economy by keeping costs down, and one way to do that is to hire freelancers willing to prove their worth and sharing in the revenue they bring in. Conceptually it can be a win-win, but it puts more risk on the freelancer."

Six Kinds Of Dead-End Gigs
Here are six types of freelance gigs that probably won't end up paying off – and may even wind up costing you money:

  1. Anything That Sounds Too Good To Be True
    Okay, let's get the scams out of the way right off the bat. We hope this goes without saying, but when it comes to work-at-home gigs, the old adage definitely applies: If it sounds too good to be true, it probably is. "Any 'opportunity' that offers ridiculously high income for menial work, in the end, will not be worth anyone's time because it's inevitably a scam," says Tom Harnish, co-author of "Undress for Success: The Naked Truth About Making Money at Home."

    "Why would a company pay someone several dollars to stuff an envelope when a machine can do thousands an hour for pennies?" Harnish says. "The point is, such promises are inevitably 'come-ons' designed to trick you into paying for a worthless starter kit."

  2. Multi-Level Marketing
    Multi-level marketing jobs are gigs where you need to sell stuff, usually by means of a "party plan" or by taking catalog orders. While there's the occasional success story – the people who win new cars or tropical vacations because they're the top earners in their territories – most people who try these opportunities don't end up making much. They often don't even recoup the cost of the "starter kit" or other supplies they needed to buy.

    "You'll get howls of protest from the people who've drunk the Kool-Aid, but the fact is those jobs just aren't worth the time," Harnish says. "The vast majority of people actually spend more money than they make."

  3. Sales And Business Development
    "These jobs are all over the place right now," says Fell, adding that these types of jobs often require an investment of time before you see a profit, because most of them are commission-based to some degree, if not entirely.

  4. Online Writing/Blogging Jobs With Non-Traditional Pay Structures
    Fell says these jobs are also abundant right now, but many companies are imposing a lot of "catches" or employing creative payment strategies.

    "Many companies have payment structures that are not strictly per article or per word," she says. "Instead, some have payments tied to submissions being accepted according to specific guidelines - opening up a risk of the freelancer writing content that won't be accepted - or calculated based on the amount of advertising revenue generated by the content, which is not guaranteed."

    A popular trend right now: sites that offer payment on a per-click basis. The problem: contributors have no way to verify the numbers - and regardless, the per-click rate is usually minuscule.

  5. Online Education And Training Course Designers
    "This is another type of freelance opportunity that often has the earnings based on revenues generated from the sale of each course," Fell says. "The designer puts in the energy and effort up front, with potential of longer-term residual commissions." Also, this type of work may require freelancers to invest in equipment or supplies, or put wear and tear on equipment they already own.

  6. Freelance Filmmakers
    "This is another hot commodity in the online content industry," says Fell. "Filmmakers typically produce short videos for use on the web, often getting paid upon acceptance or upon advertising." Again, these gigs may require equipment or supplies that, in some cases, can be pricey.

The Bottom Line
As with any other job situation, it's important to thoroughly check out freelance opportunities before investing any time and effort. Make sure you fully understand the fees and payment structure, and watch out for any fine print or creative payment tactics that may delay your payment. Plenty of worthwhile freelance gigs are out there - you just need to be careful to steer clear of the duds and dead ends.

Homebodies can save big on their tax bill. Learn how to get in on the action; see How To Qualify For The Home-Office Tax Deduction.

Still feeling uninformed? Check out last week's Water Cooler Finance to see what's been happening in financial news.

Related Articles
  1. Retirement

    7 Ways to Keep Working Instead of Retiring

    If you love your work (or your paycheck) or both, there's no reason you have to quit your job just because you hit retirement age.
  2. Professionals

    5 Things to Request If You Can't Get a Raise

    The job market is improving, but many companies are still running on tight budgets which means no raises. But there are other forms of compensation.
  3. Professionals

    7 Ways to Save on Home Office Costs

    Working at home can come with many costs. Here are some easy ways to keep your expenditures low.
  4. Professionals

    Working During 'Retirement?' What You Need to Know

    More workers than ever plan on working another job after they retire. Here are some of the financial implications of doing so.
  5. Entrepreneurship

    7 Strategies Small Business Owners Should Know

    Use these techniques to make your business stand out from the pack and thrive.
  6. Entrepreneurship

    The Best Work from Home Jobs for Moms

    Here are the four best work from home jobs for moms. See if one peaks your interest and get started today!
  7. Professionals

    Are We Becoming 24-Hour Workers?

    Many employees are working more than 40 hours a week, and even when they’re not physically at work, they’re still mentally and digitally connected.
  8. Entrepreneurship

    How to Boost Productivity When Working at Home

    Working from home is on the rise. Here are some tips on how to maximize productivity when working from home.
  9. Personal Finance

    The Top 10 In-Demand Jobs in America

    If you're searching for a job that's in demand and has salary increase potential, keep an eye on these ten positions.
  10. Professionals

    Jobs That Pay Over $100K and Don’t Require a Medical or Law Degree

    Don't want to spend half of your life in med or law school? Don't worry - there are other jobs that pay over $100,000 a year.
  1. How do mutual fund managers make money?

    Mutual fund managers get base salaries, which vary greatly depending on the size and pedigree of the fund company. They may ... Read Full Answer >>
  2. Does my employer's matching contribution count towards the maximum I can contribute ...

    Contributions to 401(k) plans come from employee salary deferral and employer match dollars. According to the IRS, employees ... Read Full Answer >>
  3. What is a family Limited Liability Company (LLC)?

    A family limited liability company (LLC) is formed by family members to conduct business in a state that permits such form ... Read Full Answer >>
  4. How is marginal propensity to save calculated?

    Marginal propensity to save is used in Keynesian macroeconomics to quantify the relationship between changes in income and ... Read Full Answer >>
  5. What risks does a business owner face under a business structure with unlimited liability?

    The risks that a business owner faces under a business structure with unlimited liability are literally unlimited, but they ... Read Full Answer >>
  6. Why should investors research the C-suite executives of a company?

    C-suite executives are essential for creating and enacting overall firm strategy and are therefore an important aspect of ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  2. Barefoot Pilgrim

    A slang term for an unsophisticated investor who loses all of his or her wealth by trading equities in the stock market. ...
  3. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  4. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest one-day drops in stock market history. More than 16 million ...
  5. Black Monday

    October 19, 1987, when the Dow Jones Industrial Average (DJIA) lost almost 22% in a single day. That event marked the beginning ...
  6. Monetary Policy

    Monetary policy is the actions of a central bank, currency board or other regulatory committee that determine the size and ...
Trading Center