Some Freelancers become rich from Freelancing but they are very much the minority.Most make a nice living out of it but have to keep going till they retire.There are several basic rules if you want to make your pile and get out.
1. The most important factor is to keep working.
Too many freelancers negotiate top rates for themselves and drive up the rate at renewal time but when a company are cutting back on freelancers, unless they are so good they are ‘must keeps’, the company often just get rid of the more expensive ones.
Many of the most successful freelancers are competitive in terms of rates and keep themselves just below the market rate in order to keep themselves in constant work.It is much better to get slightly less than the other freelancers at a company and be working while some of the others are spending a few weeks or months ‘on the bench’ spending their hard earned cash with no income coming in.
2. Invest at the right time
That may seem obvious but when is the right time?Well firstly, we’ll tell you when the wrong time is.Most freelancers invest during a boom when they have plenty of money and when the Stock Market has been going up and up and it seems safe.The trouble is that every booms turn into a bust.When a bust comes freelancers may find themselves having a lengthy spell out of work.
Coupled with that, when the boom turns into bust their share prices will be tumbling as well and freelancers will be forced sellers of their shares just at the worst possible time to sell them.The very best time to buy shares is when there has been a major fall in the stock market of at least 20%.Then freelancers should go back into the market gradually putting some in each month rather than putting their whole pile in at once. We have many more Freelancer Help Articles Now Available.
3. Build a Safety Net first
Very often freelancers want to get rich too quickly.What they do is that they invest their money in the stock market right away, as soon as they have it to bring forward the day when they can get out and do what they want.
They first must build a safety net for themselves or they could find themselves selling their shares and even their house at rock bottom prices just to pay their taxes when boom turns to bust.Freelancers should put money aside to keep them for at least six months if they are out of work.A year would be even better.Then you can become a long term investor.
4. Remember that you are a Salesman
As a one-man band you have to do everything for your company.You are head of Operations, Finance, Marketing and Sales.If you work through an agency you’ll notice that your agency will take your client out to lunch every so often.Agencies don’t like to throw money away as you’ll have found out when you negotiate with them.Do you know why they do it?It works, that’s why!Too few freelancers do this.
You should take whoever is responsible for renewing your contract out for lunch every so often, firstly to get a perspective on how you are doing, secondly to find out what further opportunities there are and thirdly to keep your client ‘sweet’. Clients are human and they are more likely to re-hire people that they like – and someone they get a free meal out of every so often.
5. Get yourself the right specialist Contractor Mortgage and Umbrella Company
It used to be difficult for freelancers to get mortgages as they had to produce three years worth of accounts and were only given a multiple of what they paid themselves from their Limited companies.It still is if they walk into a high street bank.It was a little easier for Umbrella Company contractors.Now there are a number of specialist contractor mortgage suppliers who can get freelancers much higher multiples and much more easily.
Contractors also must make sure that they choose an Umbrella Company that is safe and secure and has been trading for many years. It is the freelancers after all who will end up with the back tax bill if the Umbrella Company goes bust or is operating illegally leaving a huge hole in freelancers’ pockets.So, if a freelancer follows the above rules, he or she has a much better chance of freelancing successfully, making their pile and getting out to do something else if that is what they wish to do. We have many more Freelancer Help Articles Now Available.