From the Editor
Benefits and Risks of Freelancing After 50
This edition has a two-fold purpose: Discussing the benefits and risks of freelancing and why freelancers need to use contracts.
Over the past few issues, I talked about why you should consider freelancing, how to get started, and how to choose which freelancing path to take. But I would be remiss if I didn't address the benefits and risks of freelancing.
Consider it a "cutting off at the pass" (to use western movie parlance) moment. I don't want you to head down the trail without understanding what you're getting yourself into, both from a benefit and risk perspective.
With that said, what benefits does freelancing offer? I can speak to the issue from my experience and that of other freelancers.
One... freedom... to be your own boss, work when and where you want... and with whom you want. (Apologies for all the ellipses... stream of consciousness kind of day.) For many, freedom suffices as the sole reason to become a freelancer. Flexibility is a closely-related benefit. Independence is another.
Two... money. Financial opportunity is a double-edged sword. (I'll talk about the risk aspect in a moment.) I'm earning a better living now than when I was an employee. And while finding new clients isn't a cakewalk, once you reach a base sufficient to pay your bills, anything else is "icing on the cake."
The biggest risk is money — both how much you make and, to reflect on a statement my wife made in her podcast interview, when you make it.
Regarding how much, the biggest mistake freelancers make is not charging enough. Unless you are an absolute fledgling with limited experience, take the time to assess your value honestly. Don't sell yourself short. You are worth more than you think.
Regarding the "when" you make it — you won't survive without a steady inflow. That's where contracts can help.
Clearly state your terms in the contract and invoices. Most clients pay promptly, but there may be the odd one or two whom you will have to "dun." Don't hang an albatross around your neck, either. If you get a client who is consistently reluctant to pay, cut them off. There is plenty of fish in the sea. (Did I mention that I am the king of cliches?)
Speaking of the sea, don't be surprised if your income ebbs and flows. At times, you'll have more work than you can handle, and, at others, not nearly enough. The tide comes in and goes out — it's the same with freelancing
Set aside funds during the good times to cover the lean. If the thought of scarcity is frightening, the freelance lifestyle may not be for you.
Taxes are another risk. (I should say paying taxes.) I'll admit I'm not as adept at making the quarterly payments as I should be. In which case, do as I say, not as I do. If you're making a good living, you can get in tax trouble by not staying paid up — the taxman cometh. You are self-employed, a small business owner. Think like one.
Lack of benefits is the last risk I'll mention. Healthcare is expensive. If you're over 65, like me, you have Medicare. If not, finding an affordable healthcare provider can be tricky. There are also retirement benefits to consider — you're on your own there, too.
A biblical passage (Luke 14:28-30) asks a salient question, "Suppose one of you wants to build a tower. Won't you first sit down and estimate the cost to see if you have enough money to complete it?"
Before you start building your freelance career, count the cost. Weigh the risks and rewards, pros and cons, in the balance. Then, if you're still willing to walk the path that leads to freedom, take a deep breath, swallow hard, and step out. I'll be here to help.
Freelance Contract Templates
Leslie advises freelancers not to use templates but to consult an attorney when creating contracts. It's very good advice. However, for those whom that's not an option, here are a few resources to check out:
Investment and Insurance Options
I am by no means an investment whiz. For me, investing is best left to the pros. That's why, some time ago, I found Titan. They manage my money much better than I ever could — stocks, crypto, the works — which is why I recommend them. (I'm not being paid to say that, either.)
Once I turned 65, healthcare coverage became a non-issue. It wasn't always that way, however. For a time, I went without coverage. I found this list of what Investopedia called the "best" health insurance for self-employed people. Might be worth checking out.
Balancing Freelancing Risks and Rewards
Here are a few more articles focused on the upside and downside of freelancing as a career.
Balancing the Risks and Rewards of Freelancing - This article offers practical advice, like create multiple income streams, set a routine, and stay organized.
The Disadvantages of Freelancing - Not to be Debbie Downer, but you might as well be fully aware of what you're getting into. This article from Balance Careers lays outs the disadvantages and challenges.
How to Avoid the Risks of Freelancing - The best way to avoid the freelancing pitfalls is not become a freelancer. Here are some other ways.
If there's a topic you would like to see covered in the newsletter or podcast, let me know.
Finally, if you like the newsletter and podcast, become a subscriber and share them with your over-50 freelancer friends. Thanks!
See you in two weeks!