Interesting the word freelancing seems to have replaced contracting/consulting. I spent a year doing that when the 550 person consulting company I worked for went belly up after Y2K ERP work was over. I had three steady clients that kept me busy full time. I got the failing company to sign a release from the non-compete I signed when they closed the local office, then registered my own LLC called World Domination Software. Pinky and the Brain was popular then, inspired my name choice. :-)
Cost me $12 in startup cost, to buy some business card stock, then designed by own cards with MS Word. Had revenue of $150K (in 2001) when I was making about $70K from the consulting company in salary.
But questionable to this day whether I came out ahead or not. No benefits, so I had to spend $800 a month on health insurance (and not very good health insurance) for my family. Then had to pay unemployment tax on top of other income taxes being self employed. All together, was about a $60K tax hit against my revenue. No paid vacation, if you took time off, no income during that period. I'm not sure I took any that year, certainly not week at a time.
I eventually took IT Mgr/developer job at one of my clients, which I'm still doing today. The tipping point for me was the realization how difficult the sales process would be, getting new clients. Just how do you do that when you are working all the time for existing clients? So it was either commit to trying to growing the business (adding sales person, more employees for field) or go back to permanent hire somewhere.
If I was younger and single, or at least married with no kids, I might have taken chance to grow the business. But having a family, minimizing risk was really the driving factor in the decision.
I certainly don't miss the travel. One of my clients was a good 1-1/2 hour drive. That wasn't a lot of fun in the dead of a Wisconsin winter. I also missed not belonging to a team. My clients treated me great but you weren't part of them, their goals were not your goals. I've never regretted my choice, assuming I really had a choice in my particular situation.