Freelancing can be as lucrative as it can be debilitating.
You need tough skin to weather the good and bad months. A 9–5 job doesn't sound so bad when you realize nothing is consistent when you work for yourself.
First off, the wealthy freelancer doesn’t panic because they understand the ebbs and flows of the game. They get back on the horse when they fall and keep moving forward.
These are five things financially savvy freelancers do.
1. They reinvest their money themselves
Just because the word “free” is in freelance doesn’t mean anything comes to them in a shiny box with a ribbon on top.
No salary also means no 401K. That spells trouble for a freelancer who doesn't think about their future. Luckily, it’s almost 2022 (scarily), and there are many ways to invest, be it Robinhood, Coinbase, or WeBull. We can invest as safely or risky as we want in the stock market.
What makes anyone a wealthy investor is consistency. Later in life, you’ll be in a good place if you invest $1,000 monthly, as compounding is more effective the earlier you start.
Graham Stephan says there are only five investments one needs to make to grow their wealth. Put your money into these, set it, and forget it.
International Index Fund
The SP500
The Total Stock Market Index Fund
Real Estate Investing
Crypto
The first three are ETFs, which are essentially conglomerates of the biggest companies. This generally dictates the stock market as a whole, and historically speaking, they perform very well over 20-year periods.
The best part is their simplicity. They will have their ups and downs, but over time, the increase in value beats keeping your dollars in a low-interest rate savings account.
Investing in real estate isn’t in the cards for everyone, but the fact is that everyone needs a place to live. The need for housing will always be there. A house could also serve multiple purposes: you can live in it or rent it out to someone else to return your money.
When it comes to crypto, I’m bullish on Ethereum. I think it’s the future of the internet and transactions of all kinds. Regardless, I like to play things safe. I think it’s wise to invest no more than 5% of your entire portfolio in cryptocurrency.
The sky really is the ceiling.
2. Upwork isn’t their main source of income
Businesses go to job boards for quick and dirty work.
Upwork and Fiverr are for freelancers who need to cover rent or have free time to make a little extra cash. Upwork is short-term money.
The best clients hide behind the scenes. They want someone they can trust: a good communicator with face-to-face value. The clients who aren’t visible to the naked eye represent long-term money.
This is how you reach them:
Instead of cold calling, buy a potential client’s product or test their service for yourself and do something to improve it. Show them your work and amaze them with your forwardness.
One legitimate way to make money on the internet is to show what you can do. Don’t just say it. Actions speak much louder than words.
3. They have 1–3 high-ticket clients
One secret client leads to more.
It’s much easier to work for a few clients instead of juggling a dozen small Upwork jobs. Too many gigs cause headaches. It leads to late deliveries, and worst of all, burnout.
One client can pay the same as a dozen small ones if you play your cards right. It takes a little effort up front. It’s not easy to find clients who hide in the shadows. Just remember that the money is out there and that you can live with just one income stream.
For every leaky boat, there’s a freelancer with a plug to keep it afloat. It’s not the client's job to know who you are. How can they?
If you want the job, then make yourself known.
4. They understand the difference between short and long-term money
Short-term money pays the bills.
Wealthy freelancers are really entrepreneurs, except they don’t sell products (yet). They market their skills to clients in need.
Being unique is a superpower. A skill can pay the bills without needing to work 40 hours a week and be under the clutches of a maniac boss. It depends on how much you like working.
Short-term money is the cash needed to pay the bills. Doing the work you don’t necessarily enjoy is a necessary part of growth. Pay the bills, invest, and save up a nest egg. Short-term money isn’t fun money, but it’s a part of life.
Wealthy freelancers work for long-term money too. I’m not talking about investing in the stock market either. The long-term freelancer is an entrepreneur who wants to turn their skill into a business.
That could mean many things, but it usually relates to selling eBooks, courses, online seminars, or even 1-on-1 coaching sessions.
You can make more money by seeking long-term clientele.
Owning a digital product business is a deterrent against inflation, job loss, and general lack of motivation to work a 9–5 job. When everything else fails, a company that stands to teach first and make money later will stand the test of time.
5. Communication is their most prized skill
Wealthy freelancers market their skills, but more importantly, they sell themselves as relatable humans.
Clients are human; humans run businesses. Look at every job opportunity this way. It’s like picturing everyone in the room in their underwear to make you relax during a public presentation, except it’s the realization that nobody is perfect.
Everyone is just playing life like a videogame, but it’s an open sandbox world where you have to pay real-life dollars to play. Your friends, parents, and boss may seem like they have everything under control, but they don’t.
I used to think my parents knew everything. I mean, they’re brilliant and are great with their finances and all that jazz, but they don’t have all the answers to my questions. That realization opened up a can of worms.
If they don’t know at all, then nobody does. Therefore, nothing matters. Since we’re here, we may as well make the best of the time we have and treat others with respect and dignity, which brings me back to the importance of communication.
A slept on the form of communication is asking questions. The wealthy freelancer knows that questions are gateways to free information.
Has your boss ever asked you to do something, then you realized you had no idea how? So you go with the flow and do it without any help.
What are 10 seconds of your time to ask how to do the assignment?
Transparency wins every time, primarily when you work with a client. There’s no point in keeping secrets. Nine times out of ten, your client will appreciate you asking questions or saying everything you need to.
Final thought
Money is time. Have you ever heard that before?
The wealthy freelancer buys back their time with hard work upfront. Real wealth is time for family, friends, the gym, weekend getaways, and cooking hearty recipes. Forty or more hour work weeks aren’t conducive to a healthy body or mindset.
Of course, there are plenty of productivity tips to string you along the corporate path. In the end, it’s up to you. The most straightforward way to wealth is working a regular job, living below your means, and investing half your earnings. Just because it’s simple doesn't mean it’s easy, though.
Freelancing is another way to build wealth, and the wealthiest understand these key concepts:
Active investing
1–3 high-paying clients
Short and long-term money
Prioritizing communication
Building wealth takes up time upfront. Work-life balance will seem hard in the moment, but down the line, you’ll see that building the life of your dreams is worth it in the end.