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5 Super Smart Investment Tips for Freelancers and Solo Entrepreneurs

I came across a forum that was offering business advice and one post in particular caught my eye. The original poster said that he had a list of tricks for businesses that were 100% guaranteed to improve their company’s long term prospects. He went on to claim he was a former vice financial head of a major brand (though this was not confirmed).

As I read through the tips, they were all aimed at big businesses which wasn’t surprising, given his claimed former position. But what good would it do the majority of people on that forum? How many CEO’s did he think were posting there?

Freelancers might benefit from some of the advice given to giants, especially if those ideas can be applied on a smaller scale. Unfortunately, when it comes to investments they are almost sure to have fewer resources at their disposal and investment strategies can be hard to slim down to more manageable scale.

As a solo entrepreneur myself, I wanted to collect some more manageable strategies that can help those more bite-sized business owners get their slice of the investment pie, within their own means.

Minimize Your Spending

You have to spend money to make money, right? Well, not always. Sure, being willing to put cash down to improve your business is an important step for many. But part of being successful financially is also taking the time to find where funds are being mismanaged or siphoned off in unnecessary areas.

For example, are you filing your business taxes the right way, or are you paying more when you could be paying less? Are you wasting money on fees, or on campaigns and strategies that are not as efficient as others you could be running? Are you doing something that might be redundant?

Before you invest any money, make sure you have as much as you should. Do an audit and discover if there are any places that are leaking funds you weren’t aware of. Find any tools you don’t need, services you aren’t using, tax loopholes, etc.

This doesn’t mean completely cut off things that are helping your business, especially if you can’t do something as effectively as, say, an employee you have hired can. But if it worth looking into where all your money is going and start there.

You cannot improve what you are not measuring, so consider setting up a business dashboard to monitor your bills, invoices, income and more. Cyfe is a solid option for a freelancer and solo entrepreneur because it gives you lots of features for just $19 a month. Check out what you can do to use Cyfe to create a finance dashboard here.

Cyfe finance

Diversify

Diversification is important with any investment portfolio. First of all, putting all your eggs in one basket means your investments are all under threat with a single market crash. Second, markets fluctuate and usually not together.

Where one area might be making a sharp decline, one could be compensating by rising in value. Try to spread out your investments into at least three arenas, but preferably more. This provides you safety and various avenues for profit, which only strengthens your overall portfolio. Even if you have limited funds available to you, this is a simple way to get more for less.

Use Coin Flare to track various options, watch trends and monitor all markets streaming in real time.

coinflare

Invest In YOUR Business

What is the best investment you can make? In your own business! You may feel like you are already putting so much into your company that adding more investments is the last thing you want to do. What if it fails? But that is the point: you have to put everything you have into your company in order to make it a success.

Investing in your company has the added benefit of providing more support for what you have bet so much on. This could mean advertising, marketing, attracting talent, expanding enough to find additional investors, etc.

The point is that you are putting money into something that matter so much more to you than any other business out there. Sure, it isn’t an investment in the way you were thinking. But it may be the best you can make, with the greatest return. Stocks are nice when they pan out, but nothing is better than stability in your business venture.

One smart investment to consider is putting more into your advertising budget, especially when it comes to online advertising. Shout Agency offers a great guide to help you make smart advertising decisions.

Invest In OTHER Small Businesses

The small business investing world is its own market. That market grows with demand, like any other. When smaller companies and startups are being noticed more, they are more likely to get the attention of investors that are interested in starting from the ground floor. We are seeing that trend with increasing numbers of angel and small capital investors who are giving seed funds to startups who otherwise start as simple bootstraps.

How can you help to encourage the growth of the small company investment market? Simple, invest yourself! Be a part of that trend and help the interest to grow. Not only does it have a direct impact on your future opportunities as a business, but it could get you involved with businesses that have an upward trajectory, right when they are beginning.

In a world where startups are becoming more commonplace and successful, it is a good strategy to look for ones you can become involved in, before they get too big.

Balance Risk and Stability

Risks are a natural part of life. Your business itself was a calculated risk, one that you can be sure was worth taking. But when you are looking at investments it is better to balance out risk and stability. For instance, new company stocks are a great option for quick growth, but they are dangerous and often volatile.

Government bonds are steady but have less earning potential. Having more than one source of investment with multiple levels of risk can be the best of both worlds.

Another example is real estate versus a 401k. Both are great but one has faster earning potential while one is a slow burn investment that is better over time. The downside to real estate is you might end up with a lemon property. The upside to a 401k is it is guaranteed retirement money. They have their pros and cons, so why not both?

Do you have any good tips for small business owners to try? Let us know in the comments!

Image source: Pixabay

By Kate Summers

Kate Summers is a social media marketer who recently embarked on a freelancing career. Now she is trying to figure out being her own boss and loving it so far!

2 replies on “5 Super Smart Investment Tips for Freelancers and Solo Entrepreneurs”

Investing is essential for the growth of the business. And it is not just about investing in your business but in stocks and other ventures as well.

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