As the nature of the labour continues to evolve in developed economies throughout the world, freelancing continues to provide a viable working method for citizens. While it has always been appealing to individuals with a keen sense of initiative and a proactive nature, it is the pace of technological advancement and innovation that has actively enabled workers to achieve their goal of independence.
Working as a Freelancer: How to Get the Most from Your Earnings
Working as a freelancer or on a self-employed basis brings tremendous responsibility, however, especially with regards to financial compliance and lawful operation. You also have a duty to manage your personal finances and optimise your earnings, and you can take the following steps towards achieving this:
1. Establish a Viable Corporate Set-up
The financial and tax structure that you implement in your business is critical, as this will have a direct impact on your take home pay when freelancing. The main choice you will need to make is between operating as a limited company or a sole trader, and while the former may be tempting it is extremely inefficient for the tax purposes of a small company or freelancer. Sole trading is a far more viable option, while you can also utilise resources that enable you to strike the ideal balance between these two extremes.
2. Do Not Pay More than You Are Required To
While this may sound obvious, sole traders are often overly cautious when researching their liability and complying with national laws. You are not required to register for VAT unless you earn more than £65,000 per annum through self-employment, for example, and even if you do register with HMRC you do not have to make repayments until your earnings meet this threshold. You will also need to be wary when taking out insurance, as while it is important to protect your venture you should not invest in products that will not offer a viable return.
3. Be Aggressive When Pursuing Work
As an independent contractor, you and you alone will be responsible for driving your earnings and realising your full potential as an individual. This is an important point to bear in mind, as without the requisite mind-set it is almost impossible to achieve sustained success or even maintain a steady supply of work. You must therefore be tenacious and display controlled aggression when chasing work, and strive to network with previous clients in a bid to strike up rapport. Over time, this will significantly boost your earning potential and ability to work regularly on an independent basis.
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.