When it comes to discussing investments, we immediately think of our 401(k), IRA, or finding a rental property to purchase. However, today I’d like to discuss a few additional areas that aren’t always thought of.
This discussion is important for everyone, but it is even more important for self-employed individuals. Without a formal boss or employment structure to tell you when and where to be, which type of investment account to open up, or how much continuing education you need, you may be feeling a bit lost.
There are three main ways for you to invest for your life - personal finance, continuing education, and you.
With the typical employment setup, a lot of automation is done for you. Your paycheck is directly deposited into your checking account with taxes, retirement contributions, health insurance, HSA/FSA contributions, and more taken care of automatically. When you’re self-employed, you need to recreate this automation on your own.
There are specific retirement accounts that are available to self-employed individuals. You can obtain health and dental insurance either from the Healthcare.gov or ehealthinsurance.com. Disability insurance is available for purchase either directly from an insurance company or group insurance through an association you are a member of.
Although it takes a bit more work, craft together your own employee benefits package and make all of your contributions/payments automatically after your income hits your checking account.
Depending on your profession, you may be required to complete a certain amount of continuing education whether you want to or not. By investing in your continuing education, you can build on the knowledge that you already have and find ways to provide greater benefits to your clients or customers.
Three popular avenues of continuing education are webinars, conferences, and books. With webinars, you can have an expert teach you a new topic from the seat of your desk. This is one of my personal favorite CE options, as I can blend the benefits of hearing directly from an expert and not having to travel.
At conferences, you are able to cram a load of information into a 3 or 4 day period. Not only are conferences great for learning a range of topics all in one place at one time, but you get to connect with others in your profession. Learning from experienced professionals in your field can not only teach you new tricks, but they may be able to provide new career opportunities to you in the future.
The funny thing about webinars and conferences is, all of the information you learn can be found in books. The downside to books is that you have to do all of the work! You can’t simply look at the screen or stage and soak up all of the information. It takes a little more effort. However, the world’s most successful individuals have created a habit of reading books on a regular basis - whether for pure pleasure/relaxation, or for learning a new topic.
As a self-employed individual, it can be easy to forget that traditional employee benefit packages contain things like sick days, vacation days, national holidays and gym allowances. They have these benefits in place, as they know that a healthy and well rested employee is far more productive than a sick and tired one.
As a self-employed individual myself, I know how difficult it can be to force yourself to work through an illness. This winter I have been sick three different times, which is very unusual for me, but I have been better about taking the appropriate time off. Yes, I may be able to struggle through a day, but I am much better off in the long run by taking one day off to rest my body and mind.
Remember to take a vacation. To afford this, be sure to revert back to the personal finance section, where you can automate the process of saving up for an annual vacation by making smaller monthly contributions to your savings account. Americans are notoriously bad about taking vacations, but know that you will thank yourself in the long run. Vacations provide the opportunity to see the world, spend more time outdoors, connect with your loved ones, and simply recharge your batteries.
Lastly, invest in yourself by taking care of your body. I’m no health expert, but I am confident that exercising regularly and eating a healthy diet translate into a greater work capacity. When you have a healthy body, you are able to advance your business by firing on all cylinders more often than not. Exercising doesn’t have to be boring and eating healthy doesn’t have to be bland. Experiment with different classes (both exercising and cooking) until you find a system that works for you.