Investing as a freelancer isn’t just about the question of where you should put your extra cash or how much interest you can earn on your savings. Sure, those things factor into it, but you should also consider investing in a broader sense. Applying some solid principles from the financial world of investing is a prudent way to conceptualize your decision making on a daily basis. The following investment ideas for freelancers look at the life of an independent contractor as a whole.
Don’t Put All Your Eggs in One Basket
Just as your financial advisor would warn against putting all your money into one investment vehicle, you should also diversify your freelance clients and range of work. One the most challenging aspects of freelance work is the lack of job security. We don’t have the luxury of a regular paycheck, health benefits, pension plans, maternity/paternity leave or paid vacation time. Our salary is directly tied to our time and effort, which means if a job suddenly evaporates (it happens), we need to be prepared with our own financial buffers to carry ourselves forward.
That’s why you should maintain a range of different clients. I work with clients spanning many industries, from financial institutions and traditional media outlets to technology manufacturers and content marketing companies. I also produce a wide range of content — from corporate to journalistic. While I can rely on some of my clients for a semi-regular paycheck, others are more sporadic. With a good balance across clients, industries and types of work, I’ve successfully built a foundation and diversified my freelance work portfolio.
Invest in Your Skill Sets
Unlike full-time work, where there’s a visible path for promotion and even a financial allowance for training and scheduled workshops, investing in your skill sets is entirely self-driven as a freelancer. In other words, if you don’t do it, nobody will do it for you. One of the most daunting things I still find challenging is that there’s no corporate ladder to climb in the freelance world; you build your own ladder, one step at a time.
You need to set goals for yourself and plan how you’ll grow and improve your skill set over time. What are your professional goals? Is there a particular client you’ve always wanted to work for? Think about your specific tactics to make that happen. Perhaps you need to add a new skill to your repertoire, so book a workshop or schedule time for an online course. If you’re struggling to find paid opportunities to develop the right real-world experience to win you the job, consider volunteering for a charity you support or offer a discounted rate to a friend, so you can stretch that skill set.
Remember, every small bit of skill building adds up over time (just like compound interest), and it may not be obvious what the potential opportunities are down the line. When you follow your passion and challenge yourself to learn and grow along the way, you’ll end up charting a course you’re happy with, even if you have no idea where it will lead.
Start Thinking in the Long Term
It can prove challenging to look past your current contract. We tend to get into a job-to-job rhythm, especially if we’re working in a fiercely competitive industry and contracts are hard to come by. But while we survive for a while on a month-to-month plan, the mark of a really successful freelancer is someone who can think in the long term. Instead of taking that low-paying gig that just came along while there’s nothing else in the pipeline, you might consider taking that time to reach out to better paying, high-profile clients to boost your finances and reputation over time.
In the investment world, taking a long-term approach is the safest, most reliable way to grow your money. It’s no different with freelancing. Smart investors don’t let short-term fluctuations in the market sway their emotions and decision making. Have enough faith in yourself and the quality of your work to take a similar approach to freelancing.
Investing in the freelance lifestyle is just as important as investing for your financial future. You’ll find the two go hand in hand. When you apply financial investing strategies to your clients, your work, your skills and your goals, you’ll see positive results.