Financial saving is important because it makes you ready for the unforeseeable future. Who knows what might happen tomorrow, right? So as early as now, you have to make sure that you have enough when that tomorrow comes. Make sure that you are ready when it hits you.
The Archer Mentality
“A great archer (marksman) saves his arrows for bears and not for rabbits”
I have this way of thinking called the Archer Mentality. Archer Mentality’s main philosophy is rooted on saving for the things that matter. As a freelance web designer, consider these:
- Which of the expenses will you really need?
- Is this premium plugin worth it?
- Is this software really precious as it sounds to be?
Remember, you have to identify which of your needs is necessary for your work (or for your daily living for that matter). If it’s unessential, scrape it off! That’s the minimalist way of thinking, right?
Start looking for more free tools. Yes, free software and UI kits may not be as good as premium ones but you can always be innovative and resourceful. There are ways to cut the costs.
Shoot your arrows for bears. If it’s not a bear, then, it’s not worth an arrow.
Here are a few other related articles:
Doubt may be a bad habit for success stories, but it sure is necessary. All successful men have gone through doubting themselves. This can also be applicable in saving money. Try the following doubt-methods:
- When you feel like spending, compare the product you want to buy with the total number of hours you will be working for it. Say, you want to buy a pair of $300 shoes and you are earning $20 an hour. Will you be willing to spend 15 hours on that shoe?
- Put reminders on your wallets and card holsters. Reminders like “You are saving for a car” that you can see just as you would get cash or draw your card. It would really help you re-think whether or not you will spend your cash.
Here are a few other articles that might help you:
Be a Freebie Finder
Freebies are the greatest thing about the Internet, aside from cats, perhaps. Freebies help freelancers a lot. Because of freebies, you don’t have to worry about thinking of a design and not being able to execute it. The tools you need are free! Elements like pictures, UI kits, templates and fonts can be found all over the web and you can choose from them.
Sometimes, it’s not the price of the element that matters but it’s how you creatively use them.
Here is a list of some of the 1WD Freebies:
- 5 Business Card Bonanza for Website Builders
- 22 Web Design Resources Ready for Download
- 10 Free Stunning WordPress Themes for Bloggers
- and more at 1WD Freebie Category
Plan Your Education
As a freelancer and worker of the Web, you have to update your knowledge. Doing so will increase your potential to be hired because your clients know that you have the idea about the latest trends and techniques in your field.
Courses can be very costly at times, and sometimes, there are courses that really don’t make any sense in your field. That is why you have to plan your education. You have to schedule your updates to both save money and time. You just can’t go on deciding that you want to take this $1000 course on something.
Here are a few tips:
- Create a list of things you really need to learn.
- Know which of these items are discounted. If you think the discounted prices are reasonable, then, take them.
- Don’t go course-hopping. Choose what you really need.
- Remember to read reviews. Make sure the course you’ll take are worth the bucks you spend.
- Be mindful of scammers. Take courses from trusted online resources.
- If there are free courses, take them.
More to learn here:
- What is the Future of Online Education?
- The Secret Of Learning Web Design And Getting Paid While Doing So
Saving money is not always easy. It’s darn hell painful. That is why you need a lot of discipline on this. But always remember that the sweetest fruits of success come from the bitterest of roots. Don’t just be a happy-go-spend person, save for the rainy days. Good luck.
Do you have any money-saving methods to suggest? Let us know.
We have some more tips on how to retire like a Boss. Ready? Alright!
4 Tips to Retire Like Warren Buffett
Like with any life changing decision, there are pros and cons to the decision to work for yourself. One such con is the responsibility to handle your retirement by yourself. If you aren’t careful as a freelancer you could be setting yourself up for financial ruin later on down the road. The burden of establishing your retirement fund rests entirely on your shoulders. In this post I hope to offer insight into different retirement planning options that can establish a safe financial future for freelancers in any industry.
1. Save Early
The most important thing to keep in mind when planning for retirement is that the earlier you start saving money, the more comfortable your retirement will be. You should begin making contributions to your retirement as soon as possible so more interest can accrue. In order for me to illustrate the importance of starting early let me give an example:
Freelancer A and Freelancer B are both 20 years old and make $55,000 per year. Freelancer A read this article and decided to start making contributions of $5,000 per year to his retirement fund starting that year. Freelancer B unfortunately did not read this article and bought a car instead. Five years later, B decides he should probably start contributing to retirement, at $6,500 per year. They both want to retire at age 65, and can both secure interest rates of 5%. By age 65, A has $798,500.78 saved up, whereas B only has $785,198.53. Notice how Freelancer B tried to compensate for missing those five years of saving by increasing his annual contribution by $1,500 each year and still came up short compared to A? Interest adds up fast.
2. Save and Don’t Spend
Image by svilen001
The next tip may seem obvious, but watch your spending. Mint.com has received a lot of good press, and that’s for a reason. Seeing how you are spending your money graphically can really help you see just how much money you are wasting. I was taking a look at where I was spending money, and I used to spend way too much money on coffee and restaurants. It’s incredible how much money you can add to your retirement fund if you cut out impulse buys and other unnecessary spending. Let me provide an example:
If a freelancer really likes Subway and eats a $5.00 sandwich there three times a week and also loves Starbucks and gets a $4.00 cup of coffee there three times a week , that adds up to $27.00 per week, or $1404.00 per year. Now imagine if this hardworking freelancer only ate out and had coffee once per week instead; the freelancer only spends $468.00 for an annual saving of $936.00. Again, with a 5% interest rate over 45 years, if that $936.00 is put to your retirement fund each year it comes out to $149,479.35 by retirement age, and that is no chump change.
Ultimately, there’s two ways to spend money. Investing it or wasting it. Live within your means, and invest in your future. Don’t waste money on things you don’t need, except for on occasion. That said, be sure to reward yourself a little bit if you land a huge contract or accomplish something big; it’s good for morale.
3. Choose Investments Wisely
Image by svilen001
In order to actually accumulate interest on the money you put aside for retirement, you will need to invest it. There are a wide variety of investment opportunities available to freelancers, and they can be as conservative or risky as you’d like. As with anything else in life, higher risk investments have potential to yield much greater returns in comparison to conservative investments, but are you willing to stake your retirement on an investment? I’m not the person to answer that. The decision is yours. Here are some options you have for retirement investing:
IRAs (Individual Retirement Accounts) are often misunderstood. IRAs should be thought of as a collective investment account for retirement. Essentially once your money is in your IRA, you can invest it however you’d like. This includes stocks, mutual funds, CDs, annuities, and bonds among others. The IRA is basically an umbrella account that decides how your investments will be taxed. There are different types of IRAs available, and it is up to each individual to decide the best option for their circumstances. Here are a few options:
The Traditional IRA:
The Traditional IRA allows you to defer taxes on payments made into the IRA until you withdraw the money when you retire.
The Roth IRA:
The Roth IRA is another type of retirement account, but instead of paying taxes upon withdrawal, you pay taxes on your contribution.
The SEP (Simplified Employee Pension) IRA:
The SEP IRA is great for freelancers, because it is a retirement plan that works for self-employed people. It allows your business accounts to make pre-tax contributions to your personal retirement account. You as an individual cannot make contributions personally, however. Of course, taxes will have to be paid upon withdrawal. These accounts are often used to supplement either a Roth or Traditional IRA.
Now that I’ve covered three of the main types of IRAs that might interest a freelancer, I will discuss some investment options within the IRAs. Keep in mind; you will want to diversify your investment portfolio to minimize risk. Make different types of investments. Own some long-term stocks, some microcap stocks, and a few CDs (Certificate of Deposits) instead of just a lot of long-term stock investments for example. Don’t put all of your eggs in one basket, because if that basket drops you will have a hard time retiring.
Personal Stock Investing
Stock investing can be very risky if you’re not very familiar with the stock market and how trading works, but don’t let that scare you away. It is worth learning about. Generally, if you decide to invest in mature companies that send shareholders nice dividends, your risk will be significantly lower than if you were to invest in a microcap company in hopes that it will be the next Apple or Google. Whichever route you take, cut losses before they get too big and take profits when you can. Be disciplined and don’t “marry” a stock, or you will lose a lot of money.
One thing I want to caution readers on is a common stock manipulation scheme called a “pump and dump”. Promotion companies are paid by sleazy companies to tout their stock ticker through emails, phone calls, and mailers in order to create more demand. As any economics course will teach you, where there’s more demand and less supply, prices increase. As the prices increase in what is known as the “pump”, insiders and more experienced sell shares as the price per share reaches a peak. With big time selling, the supply goes up and the demand goes down. This is known as the “dump”, and it in turn decreases the share price significantly; sometimes even in a matter of minutes. This causes inexperienced investors to lose all of their initial investment, and leaves them confused. Please do not buy a stock that you read about in an email unless you know exactly what you are doing, even if it looks really appealing. It is almost definitely a scam.
Certificates of Deposit (CDs)
CDs are generally a safe investment to make because they are FDIC insured up to $250,000. With CDs, you put a principal payment down, and a bank offers you a fixed interest rate until the maturity date. At the maturity date you get your initial investment back plus interest. You get to decide when the maturity date is when you make the initial deposit. The longer the term length of the CD you pick, the higher the APY (Annual Percentage Yield) will be. You can withdraw your principal at any time, but you will lose accumulated interest. If you can avoid touching your money, CDs will offer better returns than savings accounts in the long run.
Bonds offer many options, from treasury bonds to corporate bonds; it’s wise you do a lot of research to fully understand the different possibilities. Essentially, a bond is an offering from a company or entity that allows investors to finance a project. It’s like a loan from an investor to a company or entity. Rating agencies help individual investors to decide if a bond investment fits within their risk tolerance. Investors require a higher return for riskier bond purchases, so the riskiest bonds will have the highest yields, but also the highest chance of defaulting.
A mutual fund is a large pool of money collected from many individual investors and managed by professional money managers. The nice thing about mutual funds is that they allow individual investors to gain access to a highly diversified portfolio that is managed by a financial professional, so it can be fairly safe. There are different mutual funds with varying levels of risk, so again, it comes down to how much risk you are willing to take on. There are many funds out there. Some of the more popular ones imitate the major stock indexes, like the Dow Jones Industrial Average, the S&P 500, and NASDAQ. Stock indexes give a close representation of the movement of the entire stock market. Research any mutual fund you are thinking of investing in very carefully, and decide if it fits within your risk tolerance level.
ETFs (Exchange-Traded Funds)
ETFs are securities that are designed to follow an index, but are tradable like a regular stock. ETFs offer great diversification, but they also allow you to short sale, which is essentially betting that a stock will decrease in price instead of increase. Be careful with short sales, as they are very risky. I recommend doing a lot of research on short sales and practicing them with virtual money before actually taking a short position with real money.
4. Establish Goals and Meet Them
Retirement starts with planning. Your first step is to establish how much money you will need to survive after you retire, and then you have to figure out how much money you will need to save each year to reach these goals. Retirement is not something you should procrastinate on. Get on the ball. Plan and contribute early, or you will not have a smooth retirement. Here are some tools I recommend to help plan for retirement and keep track of goals:
Mint.com – Mint is a powerful tool that provides graphs of how your money is spent. It will help you monitor and reduce unnecessary buying. It will also allow you to easily track the balance of your retirement accounts at all times.
– Google Advisor is a nice little page that Google set up to help users easily find the highest interest rates available on CDs and other accounts.
Bankrate.com – Bankrate has calculators to help you decide the amount per year you should contribute to your retirement funds in order to retire with the amount of money you want to have. It would be easier to use the calculators on this site than to try to figure the calculations out by yourself, because Bankrate’s calculators use the most recent rates for its numbers.
Disclaimer: The author is not a financial professional, and you should do your own due diligence while looking into retirement options. Be sure to talk to a professional financial advisor to help plan your retirement. This is not something that should be taken lightly.
In the last section we will look at how to scale your business, so that you will be able to stick to our tips written above.
Scaling Business, Graduate Advice, Transparency in Business
Does fluency and time spent on coding help scale your web design business or are there any other factors? If so, what are they?
Spending most of your time coding and learning new coding languages does not help your business. On the contrary, it hurts your business more than it helps it. Instead, you have to think more like a businessman than a coder. Why? A web designer only thinks of the small picture – codes and design, while a businessman thinks of the big picture which includes efficient time management and viable solutions for your clients. Moreover, a web designer only thinks of getting the job done while a businessman has a vision of where he is going as well as has clear-cut goals to give more value to his clients.
Here are more valuable advice from web design professionals who have been successful in the niche they have chosen.
- Define your value – What sets you apart from your competitors? What makes you relevant in the industry? You have to be very deliberate in identifying the reason why people should choose you in favor of another.
Create a bio-profile – Imagine what type of customer you want to attract. What kind of customers do you want to provide a solution for? When you have a clear idea what type of customers you want to attract, you will be able to adjust your business and stimulate growth.
- Identify your key indicators – When entering into a business venture, you should always remember that changes are not just necessary, but they are also measurable. If you cannot measure a change, you won’t be able to identify its efficacy. Identify which key indicators affect your business, then invest your time and money on them.
- Look to your competition – In any industry, there will always be businesses similar to yours. These competitors are likely to be excelling at something you are struggling with. Look to them and observe what new and unique strategies they are using. Don’t be afraid to ask for advice and ask why they had to make those choices and decisions.
- Focus on your strengths – It is good to look at what your weaknesses and devise ways how to improve them. However, there are also times where focusing on your strengths is much better – revamp your strategies to suit your strengths an build on them to scale your business.
What’s the best advice a new graduate entering the Web Design industry can get?
If you are a new graduate and has decided to enter the web design industry, it is much better to decide a specific niche you can focus on. This advice goes also to those who already have a career in the industry but are trying to make a breakthrough.
As mentioned in the previous question, you should not just think of yourself as a web designer, but also as a businessman and one way of thinking like one is to decide which niche he or she wants to focus on. This gives you time to grow your skills making you more well-equipped in providing viable solutions to your clients. Focusing on a specific niche also establishes you to become an expert voice in that area. Finally, it helps you create effective marketing strategies because you already know what works and what doesn’t in that niche.
Is it advisable to be honest to my clients that I am not building their website from scratch but, instead, using WordPress?
Being transparent in dealing with your clients is your most attractive tool to attract them. In this era of information where no secrets remain hidden for long, transparency is very important. For one, transparency makes you more authentic which, in turn, makes your existing and potential clients trust you. Transparency also makes your brand more attractive.
In addition, there are a lot of benefits your clients can get from using WordPress. Aside from ease of use on your part, WordPress is very searchable in different search engine sites because the code behind it is very simple and clean. Moreover, each post, image, and page can be optimized using specific keywords, meta tags, and description.