Being a freelancer is one of those lifestyles that you can either get on board with, or you can’t grasp at all. Whether you’re making money online or you are working with many irons in the fire, it’s something that can be quite exhausting for many people. In addition to this, the financial component can be a feast or a famine. Learning to save or invest is one of those things that can prove difficult for many freelancers. But with this in mind, what are the best approaches to ensure that any freelancer can make a living doing what they want, while also remaining financially secure? (Image Credits: Jan Varsek/Pixabay)
Becoming a Landlord
Investing in real estate is common sense for the vast majority of people. But for freelancers, whose work volume peaks and troughs, having a property with tenants can provide a continual undercurrent of income. Of course, becoming a landlord can throw up certain personal problems. Still, it can help many people looking to improve their income while also maintaining a certain degree of freedom in their professional life. It’s par for the course that you will have to invest in repairs from time to time, but if you can find the right tenant that would stay for the long-term and you have a good dialogue with them, this can make things a lot easier.
Learning the Art of Stocks and Shares
Investing in stocks and shares comes with risk regardless. But the big mistake freelancers make when it comes to investing is they don’t look at it as a long-term venture. Of course, there are ways for you to improve your investment in the short-term, such as by becoming a day trader. But when it comes to stocks and shares, you have to think about the long run. You can’t invest some money and expect a 200% return right away. Conversely, if you have concerns about investing money into stocks and shares, many apps can help you practice but also give you sensible advice. Some Robo-advisors are also proving popular these days.
Contributing to Your IRA
If you are starting to look towards the future in terms of retirement, it may be time to start funding your IRA account. It’s very easy to automate payments into the IRA of your choice. But if you haven’t set one up yet, a Roth IRA is best if you are under the age of 40. An IRA is a perfect opportunity to save on taxes while also putting money away for retirement. If you own a business, you can also access a Solo 401(k) and a SEP IRA.
You should also think about how you handle your money. It may seem like a straightforward thing, but when you are a freelancer, and you are in charge of your income as well as your tax, you may not think about how much you should put away to save for your future. But you can start to pay yourself a regular paycheck but also elect for taxation as an S Corp to save on your taxes. Freelancing can be a struggle in a financial sense, but there are ways around it.