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Being self-employed offers invaluable freedom, but it often comes with a unique financial challenge: the lack of a traditional safety net. No company pension plan, no generous benefits – just you and your financial future to build. In this article, we'll explore specific investment strategies for self-employed people who want to plan without a safety net.
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Diversify, diversify, diversify…
If you're your own boss, you already know that stability is rarely guaranteed. This is why diversifying your investment portfolio is crucial. Avoid putting all your eggs in one basket, or, to keep with the independent theme, don't put all your contracts in one box.
Imagine your main business temporarily slows down – having investments in different asset classes can offset potential losses. Stocks, bonds, real estate: a balanced combination will help mitigate risk and stabilize your portfolio.
Automate your savings and investment
One of the beauties of self-employment is the flexibility, but that also means income can fluctuate. To overcome this irregularity, automate your contributions to your savings and investments. Establish a fixed amount to regularly transfer into your investment account – this will help you stay disciplined even during financially uncertain times.
Plan for financial emergencies
Without the safety net of salaried employment, self-employed workers must be prepared for tougher times ahead. Create an emergency fund to cover at least three to six months of expenses. This will give you the peace of mind needed to navigate financial storms without jeopardizing your long-term investment plans.
Additionally, investing without a safety net requires a long-term vision. Markets can be volatile, but over time they tend to grow. If your time horizon is broad enough, you can better absorb market fluctuations. In other words, don't panic about short-term ups and downs – think about long-term growth. 💸
Stay informed, be active
As a freelancer, you are the CEO of your own personal business. This means you need to stay informed about economic trends, investment opportunities and tax developments. Be active in managing your portfolio – periodically reevaluate your goals and adjust your strategy accordingly.
👉 Planning your financial future as a self-employed person can be challenging, but with a strategic approach, you can create your own safety net. Diversification, automation, foresight, long-term vision and active involvement are the pillars of financial success for those who have chosen independence.
At Birdee, we understand that the life of a self-employed person is full of challenges and that thinking about investing can often take a back seat. However, it is precisely because you have time ahead of you that it is advisable to start preparing for your future now.
With Birdee, start investing from just 50 euros and let us support you every step of the way. 🌱
