Working Without a Net: Protecting Yourself in the Freelance Economy
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By Md Miraz Kabir • Published November 2, 2017 • 3 Min Read
In Canada, approximately 1.9 million people are classified as self-employed and another 2.3 million people are classified as temporary employees.
Freelancing can be an attractive option because of the flexibility and independence it may offer; however, for some the potential uncertainties of steady work and need for benefits could outweigh the mobility freelancing provides.
Whether you’re a recent graduate or a seasoned professional, there are some things to consider before plunging headfirst into freelancing.
No matter your age, having a rainy day fund of at least three months’ worth of income can help cover basic living expenses or unexpected medical costs.
Traditional employment — a steady, salaried position at a firm — usually provides a safety net in the form of group insurance plans, severance pay and other employee benefits. Choosing to work as a freelancer can mean not having access to company programs, so it’s important to plan ahead to protect yourself and your assets.
Putting money aside for unexpected expenses like dental appointments, medical examinations or prescription drugs, may help to provide peace of mind in-between gigs.
In addition to a rainy day fund, health and creditor insurance plans may help you weather temporary disruptions to your work. For example:
Recent studies have shown that the most successful freelancers are those who leverage traditional work and use past experience to establish credibility. But many young people entering the workforce have limited work experience, making freelancing potentially their only source of income.
[quote-callout content=”Gone are the days where the work structure looks like a hierarchy; I think it’s more of a puzzle or a network where you need to bring in the right expertise at the right time.” display=”all” position=”right”]
Michael Carter, CEO and co-founder of Kahuso a platform for senior executives looking for freelance positions, predicts the rise of freelancers will occur at every level of organizations. “I think companies fundamentally have to learn how to access great talent and not to own it. Gone are the days where the work structure looks like a hierarchy; I think it’s more of a puzzle or a network where you need to bring in the right expertise at the right time.”
The pace at which business is evolving suggests freelancing and contract work may continue to play a significant role in the future economy. To stay afloat, smart freelancers can take measures, including rainy day funds and adequate insurance, to help mitigate the ups and downs in the ever-changing world of work.
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This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.
*Home and auto insurance products are distributed by RBC Insurance Agency Ltd. and underwritten by Aviva General Insurance Company. In Quebec, RBC Insurance Agency Ltd. Is registered as a damage insurance agency. As a result of government-run auto insurance plans, auto insurance is not available through RBC Insurance in Manitoba, Saskatchewan and British Columbia.
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.
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