As a freelancer, it’s important to think outside the box if you’re serious about doing this for a living. Freelancing can be a great main source of income if you set things up correctly, but it requires a lot of patience in the beginning, as well as the willingness to take some risks. It also has the problem of lacking long-term stability, unless you want to expand your operations by hiring more people and taking on more complex orders.
Exploring investment opportunities is a good idea for anyone in general, but freelancers in particular should pay close attention to this side of their finances. Because if you don’t, you could very easily find yourself in a difficult situation some time down the road when you least expect it. And unlike people with a regular job on a permanent contract, you usually don’t have any fallback systems to rely on in those cases.
We’ve Seen How Quickly the Market Can Deteriorate
Even if your situation is relatively stable right now, you never know when external factors might change that. The pandemic made that fact obvious to many and, unfortunately, some ended up learning that lesson the hard way. It’s important to be as prepared as possible for dealing with issues that are out of your control.
And if you suddenly start losing orders and clients due to unexpected circumstances, it’ll be good to know that you at least have other options to fall back on. Building an emergency savings fund is a good first step, but it’s not a proper solution to the problem by any means. You would store money for 6-12 months in most cases, but what would you do if you need to rely on your savings for longer than that?
There Are More Learning Resources Available Than Ever Before
One of the silver linings in the huge cloud that the pandemic brought over us is that many people started to show an active interest in exploring their financial options. As a result, we have more learning resources available than ever before. No matter what types of investments or side gigs you’re interested in pursuing, you can always be sure that you’ll find a large number of resources to take advantage of.
Entire communities have appeared as a result of the situation as well. You can take part in them and discuss things at length, getting answers to questions that are not easy to Google, and exchanging ideas with others. It’s a great time to start learning about investments and the financial market as a whole, and it looks like things will only get better in this regard in the near future.
Stocks
Stocks are a popular investment option, and one that’s not too hard to get started with. They do require some initial funds though, unless you want to dabble in some riskier options. Which, needless to say, is definitely not recommended for someone without experience in the field. The stock market can be volatile at times, depending on current events, but if you have the ability to do in-depth research and look beyond basic websites and CEO profiles, you can typically gain a lot from this type of investment.
Finding success in this field is a mix of patience and luck, so don’t be surprised if your first few investments fall through. There’s an old saying about investing in stocks – you should only invest money you’re comfortably willing to lose without taking a hit to your finances. Otherwise, you should probably look at more stable investment options.
Cryptocurrencies
Cryptocurrencies are pretty new, and we’re still learning about how their market works in some ways. But they’ve proven that they’re here to stay, so getting involved in this market is definitely not a bad idea. Again, it’s going to take a lot of research to find success here since cryptocurrency prices are volatile. The situation can be made more difficult by the fact that new cryptocurrencies come and go all the time. It’s often better to focus on established ones at the beginning, until you figure out what you’re actually doing.
There are some options that mix cryptocurrencies with the stock market. If you don’t know what a Bitcoin ETF is, don’t worry – like cryptocurrencies themselves, this is a relatively new concept. Wealthsimple have a pretty detailed explanation of the concept. They’re also a good starting point for those without any experience in the field. It’s something definitely worth checking out if you’re serious about entering the cryptocurrency market, because it’s very likely that ETFs are going to climb in popularity very fast in the coming months/years. Those who’ve been involved in that side of the market from early on will stand to gain a lot.
Index Funds
Index funds are the way to go if you’re looking for stability, and are willing to compromise quick profits for it. They tend to progress in a relatively predictable way, making them ideal for those who want to put their money into something that will give continuous returns without any surprises. There might be some fluctuations here and there, but they are in line with the global financial market as a whole.
But as with anything that is stable and risk-free, index funds have the issue of being very slow, as we mentioned above. They’re best combined with other sources of additional income, usually some riskier and more profitable ones in order to balance things out. Putting some money towards index funds is definitely a great way to build up some long-term savings though, and you’re not going to regret it some years down the road when you look back on things.
Side Gigs
A great thing about freelancing is that you typically have a lot of freedom in your scheduling, and can put your free time towards additional things. It’s a good idea to look into the option of taking on some side gigs, and not necessarily those that have anything to do with your main line of work. As long as you have the time, and you think the deal is lucrative enough, you should try filling those free time slots with some productive activities. It might not contribute much in the immediate sense, but it can add up in the long run if you’re careful.
Of course, always remember to maintain a good balance with your regular work. This is a common problem among some freelancers, unfortunately. As soon as they realise that they have so many options for earning additional income, they spread out their efforts too much, ultimately having to sacrifice something along the way. Don’t fall for that trap, and pay attention to your scheduling considerations above all else. Also, try to pick those gigs in a way that allows you to easily back out if you need to.
From Freelancer to a Business Owner
We touched on this above, but it’s important to reiterate. If you want to grow your business as a freelancer, there’s only so much you can do by yourself. Sooner or later, you’re going to hit a wall in terms of how much work you can take on. At this point, you’ll have to start looking into hiring some help. But remember that this is a risky move. If things don’t work out as you expected, you may find yourself stuck with employees that you can’t pay, and a company that’s bleeding money. Expansion should always be approached with caution. This is the reason why many freelancers typically look into other options first, and only consider this as an alternative if they don’t have the ability to invest in anything else at the moment.
How to Choose the Ideal Option
All of this might sound like a lot. And it’s true – there is quite a lot to explore in the world of finances out there, and lots of opportunities to earn some extra cash that you may not have considered until now. It’s important to take advantage of those as much as you can if you want to maximise your potential for the future. Choosing the ideal option for yourself should be done with a couple of primary considerations in mind. First, your schedule. You don’t want to go with anything that would impact your ability to deliver quality work on time. Second, make sure that you can keep track of how well those investments are doing. Some forms of investments tend to be very obscure about their returns, which can make it hard to know that you’re on the right track. More experienced investors may not find that a problem, but you probably will.
Don’t delay this either. The sooner you start thinking about your future and preparing yourself with additional security, the better you’re going to fare in the long run. Not everyone realises the need for this – and of those that do, some only think about it too late. If you’re considering expanding your sources of income as a freelancer early in your career, that’s great. Just make sure that you actually act on those plans instead of just thinking about them.
