The Highs and Lows of Self-Employment

Are you self-employed? Freelancing? Do you have a side hustle? All of these are various types of independent
contracting and together they are part of what has become known as the gig economy. Three in 10 Americans do gig work of some
kind or another. And for many freelancing is synonymous with
freedom. But freedom isn’t free. There’s a lot of instability that comes with
the gig economy. It’s a hustle, its a grind. You don’t have that safety net of a salary
and jobs. Basically working from paycheck to paycheck. This is good money and we are going to help
you run the business of you. OK so the gig economy is a broad topic so
let’s separate it into two sections. There’s the career freelancer and the side
hustler. Let’s start with side hustling because I’m
a humble video producer and I could use some extra scratch. But will I get in trouble with my company
for doing that? I wish there was somebody I could talk to
about this. Hey. I can help you out with this. Who are you? My name’s Mark Koehler I’m just sitting over
here read my own book on the very topic you’re talking about. Oh who let you in the building? Well I’m here for an interview. Oh. Oh my gosh. Wow. So let’s get started. Will I get in trouble with my company if I
want to start a side hustle? Generally not unless you’re gonna try to start
a small business in your industry. Nine times out of ten you’re gonna be fine. You go out do whatever you want. Once you are a side hustler you’re basically
a small business. Yeah a lot of people don’t realize if I’m
just even driving for Uber you’re getting a ten ninety nine baby. That’s a small business. Let’s take advantage of it and the tax write
offs could be phenomenal. Tell me about that. Well under the new Tax Cuts and Jobs Act we’ve
got what’s called a 20 percent pass through. We’ve got cell phone, home office computers
electronics, travel, auto all these little things that you might be paying for anyway. I call it personal conversion expenses. So what happens if my side hustle becomes
so successful that it’s cutting into all my time? Well congratulations. Now you graduated to career freelancer your
full time business owner. It’s better to quit your job now and make
more money at home. You know what, I Quit! Wait a second. Was that a good idea? What about my vacation time, my 401K, my health
insurance and that discounted gym membership I never signed up for? Freelancing seems like a lot more work than
a real job- mostly because you have to do everything yourself. What better place to see advice than the Freelancers
Union? So let’s head to their HQ and talk to Caitlin
Pearce. Caitlin thank you so much for having me. My pleasure. Let’s say I just became a career freelancer. What can I do to feel as secure as I did as
a staffer? You know when people are thinking about whether
or not to become a freelancer I always say before you make that leap think about a couple
of things. One is you know what is your plan for earning
enough income not just to support yourself but also to take on the additional costs of
managing your tax burden paying for your own health benefits and having a savings plan
for retirement. Should I be hiring somebody to do my taxes
for me? Short answer yes. One of the things all freelancers need especially
if they’re doing this full time is someone they can help you understand what you can
deduct for your business and make sure that you’ve done your taxes properly so you don’t
end up with a liability at the end of the year. Could you give me a few financial tips for
freelancers to feel more secure? First of all every freelancer needs to have
a good contract that they’ve worked with a lawyer and that they understand that’s going
to protect their work and make sure they get paid on time. Secondly you should have a system by which
you are automatically setting aside 30 percent of your income into taxes as soon as it comes
in before you can touch it. And if you can also setting aside income in
the short term and long term savings. The third thing I think is that you should
really set aside 10 percent of your time for long term planning and that should include
business building activities like client prospecting networking investing in training or up-skilling. And it’s really important for you to have
a vision for where you’re going. Think about where you want to be in five years
financially and professionally and be making steps towards working towards those goals. So that should get all you freelancers inside
hustlers off on the right foot. As for me. I’m going to beg for my cushy staff job back.

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About the Author: Oren Garnes

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