Speaking of people new to the full-time freelancing life, Steve Pavlina has tips for those just starting out--espeically those of you considering dropping several hundred on a fancy office chair:

2. Spending too much money.

Until you have a steady cashflow coming in, don't spend your precious start-up cash unless it's absolutely necessary. I started my computer games business with about $20,000 cash (my own money), and it went fast; shortly thereafter I was using debt to finance the business. Unfortunately, the original business model didn't work, and it took five years before the business was generating a positive cashflow. I soon learned that every dollar invested in the business was another dollar that eventually had to be recouped from sales.

In 2004 I started this personal development business with only $9 cash even though I could have spent much more on it. No fancy logo, no snazzy web design, no business cards or stationary. I paid to register the domain name, and that was it. That's as much as I was willing to spend before I started generating a positive cashflow. All other business expenditures came out of that cashflow.

Your business should put cash into your pocket, so before you "invest" money into it, be clear on how you're going to pull that cash back out again.

Obviously some businesses require lots of cash to start, but in the age of the Internet business, you can very easily start a lucrative business for pocket change.

More here.