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In recent years, the gig economy has exploded and is changing our view of traditional “work.” For example, many people choose to work full-time as a freelancer, work part-time as a freelancer, or even work full-time while engaging in secondary activities. Although workers in the gig economy enjoy more freedom than the corporate world, this comes at a price. Self-employed people have to deal with their taxes, savings, medical expenses, and look for the best UPS shipping quotes for SMBs. This may be an emotional and financial rollercoaster.
Here are some pointers to keep you motivated:
Realize the value of your time
As important as secondary income is, your time is also precious. Would you like to make an extra $500 plucking eyebrows this month, or an extra $2,000 from selling things online? Before participating in an impromptu side gig, please consider making the most of your time.
Register as a limited liability company to get tax incentives
Many freelancers started by only establishing a basic business structure as a sole proprietorship, and they missed many tax incentives and asset protection with legal entities, such as a limited liability company.
Be prepared to pay your quarterly estimated taxes
First-time freelancers may forget that they are now responsible for paying their taxes and will be surprised when tax season rolls around. Find out your estimated tax rate, set a calendar reminder for the end of each quarter, and send your payment to the IRS.
Maintain detailed financial records
Track all your income, which means funds in and out. Use corporate accounts and corporate debit/credit cards. Save your receipts and write down the purpose of the expenses, then put them in a shoebox if you have to. Tracking your income on a spreadsheet will also help and categorize the purpose of the expense.
Get the right insurance cover
The type of work you do can help determine what type of liability insurance you may need. Professional liability insurance may be needed if you consult. The sale of goods may require product liability insurance. A limited liability company can protect some forms of liability, but not all.
Track your business expenses
Most of the people who have part-time jobs seriously underestimate the expenses associated with their part-time jobs. Part-time work is still a business and should be treated as such. One of the most important aspects is knowing exactly how much you take home.
Prioritize retirement savings
The key to financial independence is how you allocate your money, not how much money you have. Apply your net income by utilizing the 70 / 30 Rule. Use 70% for necessities and luxuries, 10% for retirement savings, 10% for wealth-creation and the remaining 10% for charity.
Carefully expand with your growth
Ensure that you create as many opportunities as possible. Every enterprise has peaks and valleys, but the more opportunities there are, the higher the peaks and the fewer the valleys. The important thing is to scale your growth and only allow yourself to deal with expansion while still maintaining quality.
Surround yourself with successful people
We’re influenced by the five closest people we spend time with. Make sure your interactions are mostly with successful ones.
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