Freelancing will only become more popular and prevalent around the world as time goes on. More areas are becoming connected to the Internet. Combine that with how powerful even mobile phones are today there is no reason for companies to waste money hosting employees at an office. They could instead downsize on that massive cost and actually enjoy global talent at competitive rates. It’s the best situation for everyone.
Worker’s get the freedom, can move further away where their city-income will go further, cities can decongest, employers can save money – it is a total win-win-win, but only if you enjoy consistent work. The downside to the freelancer life is that you are your own boss in many regards. Either you work for yourself and need to obtain clients on your own, or you work on an ad hoc basis for an employer, but either way, work is not certain.
The Dangers of Freelancing
Perhaps your employer lost a big account and need to cut back on costs, fast. Freelancers will be let go, so to speak, before contracted employees because freelancers often work on a zero-hour contract basis. This means there is no penalty to letting you go because they never hired you, but outsourced. This puts your ability to work in peace at jeopardy.
Then, of course, there is the fact that you won’t work in a traditional environment. You are then responsible to pay all of your taxes, to keep up with healthcare benefits on your own, and of course, pay into your own retirement. You do not have a workplace pension working for you, and ignoring these extra costs will cost you later on in life.
Why You Need to Diversify Your Income Sources
By diversifying your income sources, you can keep money coming in regardless of whether one source suffers a setback. Passive incomes, in particular, are great to invest in, as they will continue to make you money without any added effort. Reinvest the extra money you make from these income sources, and you will be able to grow an empire of your own in no time.
How to Strengthen Your Financial Stability
Before you can work on becoming any sort of tycoon, you will need to strengthen your financial stability.
Have an Emergency Fund
Emergency funds are an absolute must to have for every American. A short trip to the ER and a hospital visit could leave you with plenty of debt in medical bills, depending on your level of health insurance and care. By having an emergency fund you can easily pay these bills off, as well as any other emergency situation that may come about. Say you lose your job, or your boiler dies out – having the funds in your account and ready at your disposal will help you immensely.
Start Saving for Retirement ASAP
Another savings account you need to pay into is your retirement account. The sooner you start, the less you will need to pay into it to enjoy a comfortable lifestyle after you retire. As a freelancer, it is absolutely critical that you start as soon as possible, because if you don’t you might find that you never have the means to retire, as you don’t qualify for a pension plan.
Invest Time in Passive Income Sources
Multiple income sources are difficult to build up but very lucrative once achieved. Freelance writers can enjoy a passive income by publishing content and gaining royalties. Web designers can create website themes for sale. Artists can sell their work on stock and fine art sites. Essentially if you can create a product that will be sold multiple times, you have a passive income. The reason why these incomes take time to build up is because you often need a lot of product to sell in order to see a healthy monthly return. You will always own the rights to these products, yes, but the benefits of selling them will only occur once you can build up sales in volume.
Try Trading Stocks
The stock market is one of the most notorious get-rich-quick schemes on the planet. It can help you become a multi-millionaire in a few years, but it is incredibly difficult. Stockbrokers work day and night, often at the expense of their social life and health in order to make it big. They can then retire a few short years afterward, but it still takes talent and dedication to succeed. As someone who doesn’t have that experience you might have figured the stock market to beyond your means, but if you know which stocks to buy from a reputable source, you can actually make smart money investments today. Just remember to be careful with your money and to near invest more than you are willing to lose.
Lifestyle Changes to Make to Do More with Your Money
Regardless of whether you have a healthy savings account or not, it’s time to start spending your money more wisely. This means waiting to save up before you buy luxury items, rather than buying cheap and disposable counterparts. You can save money every day and actually be better off for it, simply by:
Always Choosing the Long-Term Option When You Can
Never turn your nose up at quality craftsmanship, because if you can buy something that looks great and will continue to perform as advertised for a decade or more, then you have a good investment option on your hands. If you need to work out costs, estimate how much cost-per-use would be. Over time, investment pieces should become the true economic winner.
Benefiting from Minimalism
We don’t need a lot to be happy, and in fact, our shopping habits can end up causing us to feel claustrophobic. When you buy too much you value too little, so cut back on spending so that you only buy what you really want and will use often. This will free up space in your home and make everything around you feel like it offers something to your life.
Being a freelancer is a tough job. You are in many ways your own boss, and need to keep your own hours, finances, and taxes in order. You also need to take this a step further, and invest in your future so that you can surpass day to day challenges and enjoy a happy retirement like your in-office counterparts. Start today by being smarter with your money, and then invest it appropriately.