The Darkside of Self EmploymentMy Multiple Streams of Income

business owner life in general front page budgeting The Darkside of Self Employment I’m sure most people think that being self employed is the best thing in the world. You get to set your own hours, dont have to answer to anyone but yourself, work in your jammies and spend many hours on the beach. Yes its all a piece of cake when you are your own boss. There is something that is not shown in the brochure though.

Security of a Paycheck

There is something to be said about working 9-5, 5 days a week and being pretty sure that you are receiving a paycheck and the end of that week. Typically its a fixed amount you can count on, properly budget with and you are set. No worries man!

Well when self employed that paycheck is not a sure thing. You may have ups and downs that when you can pay yourself its not always a set amount, making it hard to budget for your expenses. Sometimes its not even there at all! I have had months that at the beginning of I looked ahead and was a little worried that the month wasn’t already filled up with appointments. For the most part very soon it filled up and all was right with the universe. This is the first month since I started that I am actually really worried. Half way point is Sunday and the cashflow is no where near the half way mark of what I need in a month. For the first time in my life I have thoughts of how will I make it and provide for my family.

Worrying about Making Ends Meet

Andrea at So Over Debt did a post this week ‘Do You Worry About Meeting Basic Needs?‘ where she got slammed in the comments from some about how could you worry these days. You either aren’t budgeting right or spending to much, etc. I bet most if not all with those type of comments have a steady paycheck. Some also said ‘well you shouldn’t have quit your day job’. I admit that at times I wonder if it was the right decision, but like Andrea hindsight is 20/20. A few months after I left my day job they had a major reduction and downsized. There might be a slight chance I would have survived it, but most likely not.

I know we are not going to be on the streets in May, its not that type of worry. I do have some reserves and the Wife still has her job (although that could change in June). Its just the realization that its not always going to be easy as it has been the past couple years. Its my time for a little downturn and Im optimistic that it will recover quickly, maybe even before the end of the month.

Regroup Time

During the slow period it does allow me time to regroup and catch up on everything that I got behind on when I was busy. Allows me time to reflect and put strategies in to place for the photography business to help me improve and grow. Its also time to work on my other streams and see about beefing them up, with the goal of having these streams to fall back on when business is slow.

Reflect on the budget and make some adjustments. Thinking my little fish spending spree was ill timed and should have been done a bit slower Over all it really puts the theories of emergency funds and getting rid of debt in a better perspective. We all talk about it and some of are doing it, but when you do actually need it kind puts it more in your face as to why you did it. When things improve again you will tend not to say “well maybe I can buy this and skip this weeks emergency fund payment”.

Hope things are going well with everyone else, but have you really had to dip into your emergency fund before? Had times were you thought about how you were going to make ends meet?

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Jen @ Master the Art of Saving

I don't know why so many people (non-self employed) think that being your own boss would be so much easier. There are so many hats to wear, increased stress, fluctuating income and evil taxes to deal with. Personally I think a regular job is much easier. Love the pic, Jeff. :-)

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Andi @ Meal Plan Rescue

I was just talking about this last night with a family member. I worry about going back to being self-employed because when I am working for myself I have a jerk of a boss. She makes me work nights, weekends, and I never get a vacation!

John@MoneyPrinciple

What most folk don't also think of is that if you come in as an outside consultant to do a job, if you undercharge then you are undermining the full time people who have jobs. I have freelanced for over 20 years now and it is difficult - which is why I am building something totally different now. But every so often, particularly as I used to do contract work for my ex-employer working with ex-colleagues, I would get the 'how can you charge so much for your time' jibe. I would reply by asking them to add up their real cost to their employer - at least twice their gross salary plus overheads, insurance, sick leave, pension contributions and the obligation to continue finding work for them. Then divide this annual sum by 2000 to get the hourly rate and compare. If I charge only half that, what security does it leave them? And if I charge too much, I won't get the work either. It's a rough world there and as you say, most whingers are probably bank employees... :-)

Adrian

Friday the 13th - What a fitting day! Well done with this post. It takes courage to put worries down on paper. Paying yourself first is the most important thing. Pay the bare essentials first, and live on what's left. It's also common trick to have an emergency nest egg of 3-6 months living expenses saved up, for times like these. You are spot on with the regroup time. This period allows you to reflect on things, and Im sure new ideas will pop up when under a little pressure. I too have had a few income scares over the years, but I have always come out stronger, as I've been forced to improve and make things stronger. As a long term focus, look at passive income streams that are solid in their returns. If you can build many websites with 5,000 page views per week, they tend to get the same traffic each week. So the advertising income can be counted on, with say a 15% weekly fluctuation. Don't go too niche, aim towards medium sized industries where you can always keep growing your sites. All in all you'll look back in a few months and wonder why you were even worried. Something big, new or inspiring will pop up soon and you'll be away!