This was a response to https://news.ycombinator.com/item?id=8409020 , decide to post it on my blog.

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) and create great profile with great pictures. Google experiments about best avatar for freelance account, try show visually projects you were involved already, etc.
• 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.