Recession Proofing Your Freelance Income

One of the biggest benefits of being an international freelance writer is the ability to completely recession-proof my business.

Did you know that when the Global Financial Crisis hit, my business actually got busier and more profitable? I didn't struggle to find new clients and I noticed existing clients began to order more than usual as well. Yet I know plenty of people who really had a hard time when the economy turned down.

So let's look at ways to avoid that ever happening to your freelance business - and how you can recession-proof your own income easily.

Income Streams

Consider this: if you had one full-time job as an employee, you'd get paid every week (or fortnight, or month - whatever). You pay your bills and your living expenses using this income, because it's regular and it's safe. Right?

However, what happens when that employer decides he doesn't need you any longer, or the business goes broke and fires all its employees? What happens to your 'regular' income then? And how will you pay your bills if you can't find another job to replace that one?

The vast majority of people have one sole, lonely stream of income they call a "salary". This leaves them vulnerable to changes in the economy, changes in the work-force, and changes in the company in which you work. It leaves you dependent on working 8 hours a day for someone else's business too.

But if you had another form of income coming into your household at the same time, would the loss of that J.O.B. really hit you so hard?

Imagine if you had two employers, both paying you regularly. If one decided they no longer wanted to hire you, you would still have an income coming into the household simply because you have that secondary income stream.

Now take that thought a little further and imagine if you had six or seven regular income streams. If one stopped, you might notice a bit of a drop in income, but you wouldn't go broke.

Creating Multiple Streams of Income

The idea of "multiple streams of income" isn't new. In fact, investors have been doing this for centuries, deriving alternative sources of income from rent received as landlords, or by earning dividends on stocks they own, or from royalties earned on book sales, inventions and other goodies.

The Internet has just made creating various revenue streams far more interesting and easier for most people to access.

For a freelance writer, the ability to generate multiple streams of income has never been easier than it is right now. Look for clients in different parts of the country, or even international clients. This reduces your risk of becoming dependent on one particular client or company and it protects you in the event of one particular geographical location suffering from an economic downturn.

Diversifying Your Income

The key to really recession-proofing any business at all is to understand about diversifying your income a bit and broaden your debtor base.

Think about where you derive the bulk of your freelance writing income from right now. This is your primary source of income. If that source is a content mill, offering lots of steady work at average rates, at least you know you always have that to fall back on.

Now think about any other alternatives you might have to add to your current income without impacting too far on the time it takes to generate your primary income.

You might go out in search of new private clients who pay a little higher than your content mill work earns. While your private clients might not order regularly, when they do order, you have a way to earn a little more than usual.

Aim at some higher paying markets in between your content-mill pursuits. Magazines are always in need of well-researched articles. Approach the editor of a niche magazine about a topic that interests you and see if they'll be willing to pay you for your efforts. You might be surprised by the answer.

You might not have the time (or inclination) to apply to a second content mill, so why not consider selling some extra work directly on Constant Content? You get to choose what topics you write about and you get to set your own prices. These guys pay out twice a month for amounts over $5, so it could be a handy bit of extra cash you didn't have before.

You might prefer to spend a little of your spare time working on more creative pursuits. Short fiction still sells very well and can be great fun to write. There are plenty of paying short fiction markets out there.

Some writers might prefer to take a break from writing articles and web content, but still want to add to their incomes a little. You might try a bit of Paid Forum Posting as a side-income. This is where you contribute to making someone else's forum look busy and you get paid for your efforts.

It makes absolutely no difference what you choose to do - this is YOUR business, after all. You have the freedom to build it in whatever way suits you best. The key is to find things you enjoy. Work with clients who treat you well. Break into other areas that interest you.

Then reap the benefits of having various income streams arriving in your account multiple times a week.

Alternative Currencies

I know I've said it before, and many writers simply don't get the point, but earning your freelance writing income in various currencies other than your local dollars can really protect you against a fall in the value of your own local dollar.

Here's a direct example: When I first started freelancing, the American Dollar was worth far more than the pitiful Australian dollar. In fact, $1 little pathetic Aussie dollar was worth about 0.52 cents per American dollar I was earning. So it made good sense back then for me to charge my clients in US dollars.

Logically, whatever I charged in US dollars could be converted to almost double again in Aussie dollars, so I was doing well.

Then the values all changed. The poor little Aussie dollar is now worth more than the US dollar. In fact, if I charged my American clients the same amount now as I did a couple of years ago, I'd be taking a pay cut. The Aussie dollar is now worth $1.10 for every $1 US dollar. That's a pay cut of more than half for doing the same work load.

If you're serious about your freelance business, you'll learn about how other country's currencies can benefit or hinder your income progress amounts. It really does make a difference to understand how various currencies can affect your overall profits or losses. I know this because I take very careful note of the exchange rates every day of my life.

Freelance writers really do have plenty of ways to keep income rolling into the household without ever needing to be reliant on one employer, one company or one client.


Self-Employed Freelance Writer or Low Paid Employee?

Recently, I met a freelance writer who is a very strong writer. She's disciplined. She follows client instructions. She sticks to deadlines. She takes on more work than a mother with two young kids should. And yet her spouse believes she doesn't have a "real job".

It never ceases to amaze me how biased some people can be against self-employed freelance writers. Believe it or not, there are really people out there who believe the life of a full time freelance writer consists of sleeping in until 10am before playing Facebook games all day.

These same biased people don't seem to see the hours of research, the long hours of sitting alone, writing countless articles or press releases or reviews, and trying to stick to insane deadlines set by clients who seem to believe we're all capable of writing 20,000 words a day with only 24 hour notice. All of this is done, by the way, while looking after a home, raising children, cooking meals and still being a wonderful spouse.

Yet, when pay-day arrives and there really is money sitting in the bank account, all those hours of sitting around and doing "nothing" actually seem to make sense to those who don't live in this world every day.

So how does a freelance writer explain the nature of being self-employed to a spouse or loved one who is determined to believe that working at Wal-Mart for $10 is a better option?

Is setting out to find a part-time "J.O.B" really worth the effort? Should you look for something that will give you regular hours every evening that means you need to give up your precious time with your kids? Is it worth it to miss out on time alone with your spouse while you're out earning minimum wage for a j.o.b?

More importantly, is it worth the extra cost to pay for fuel to drive to that job, the extra cost of paying for work clothing, cooking less healthy meals for your family, buying take-out more frequently to make up for being tired, paying for baby-sitters, putting up with managers telling you how to do your job and all the other tiny little bits of cr@p that go along with earning minimum wage?

Or is it worth the effort to show these freelance-biased people just how and why they're so WRONG in their thinking?

Of course I think the latter. Let's get into it in a little more detail:

Earning More Money

As a freelance writer, the amount you earn is 100% dependent on you. The amount you write, the type of work you accept, and the clients you choose will all play a part in determining your income. If you really sit down and apply your butt to your chair, get those fingers working on your keyboard and actually WRITE, you'll make money.

Work out what you're capable of writing in an hour of solid work and charge accordingly. Be sure you charge your clients more money than you could earn flipping burgers at McDonalds.

Spending Less Money

The vast majority of freelance writers fail to accept that working at home also means you need to earn less money to live more comfortably. You don't need to earn so much to pay for fuel or car maintenance or repairs. You just need to walk to your computer.

You don't need expensive uniforms or fashionable work clothes. You just need to be wearing something comfortable enough to allow you to sit and work.

You don't need to buy expensive take-out lunches when it's far easier to make a simple sandwich in the kitchen.

Add up the amount you're NOT spending and you'll soon find that you're able to live far more comfortably working at home than you could if you were heading out to work part-time.

Tax Advantages of Being a Self-Employed Freelance Writer

One thing serial-employees really don't understand is how badly they have it as employees. You see, they earn an hourly rate, which is then taxed at exorbitant rates. Then they receive their "in-hand" pay - the amount they get after tax is already automatically deducted, along with health insurance. From this remaining "in-hand" amount they receive, they're expected to pay bills, buy food, pay for fuel, keep the Internet connected, contribute to their 401k (or superannuation, depending in which country you live) and then put some aside for savings.

How very backwards.

Yet a self-employed freelance writer has the luxury of earning their money first. They get to pay their phone bill, Internet bill, pay for computer upgrades, deduct home office equipment, including printers, stationary, software, pens, desks, chairs and other fun tax deductible stuff that is the same in almost EVERY country.

After they've paid for the deductible things they want and need in order to continue earning a freelance income, they are taxed on what's left over. This means they earn similar amounts of money, but they pay for the things they need for their business with pre-tax dollars. They pay less tax in the long run, which gives them more money at the end of the day.

Of course, this is where most people who are stuck in the "employee mindset" really struggle. These are the people who simply don't understand that it's also their responsibility to with-hold their own taxes from the amounts they earn. They forget they need to pay their own insurance, pay their own health premiums - basically take some real responsibility for running a real business.

A true freelancer cherishes taking responsibility for the business-aspect of being a freelance writer. This includes learning what can and can't be deducted as part of operating a business from a home-office.

Yet all the while, a freelance writer is still "sitting at home playing on the Internet"

The Best Part of All

The very best part about being a self-employed freelance writer is the ability to enjoy your children growing up. You're not off working as a miserable low-paying employee while someone else cares for your kids. You're at home, able to work your schedule around their needs. You don't get to miss that first step, that first tooth coming out, that first day of school - all those important things far too many parents miss out on.

You can get up and prepare dinner in your time without having to struggle through peak-hour traffic for an hour first.

You can catch up with friends when it suits you to do so and then catch up your workload aroundd this.

So Why Don't Employees Understand?

Serial employees only ever think of the "regular" pay check they receive each week. They don't understand that the nature of being self-employed is all about taking responsibility for being self-disciplined and working around a schedule. They don't understand about finding clients or sticking to deadlines. They don't even understand that sometimes you'll get paid once every two weeks - but other times you'll be paid 4 times in a week.

They only see that they are given a set number of hours to work. They work them and they get paid on a regular basis. Nothing is ever mentioned about their productivity or effectiveness or accountability or responsibility. They just get paid and they like the certainty and regularity.

Maybe this is why they're paid so poorly?

Employees don't have the freedom to increase their income by raising their rates. They don't have the ability to diversify their incomes and bring in extra streams of cash. They can't find better clients who will cherish them and place bigger orders that add up to even more money overall. They can't just decide to do a bit of extra work when it suits them in order to earn a few extra dollars here and there.

But freelance writers can do all these things.

So the next time a serial-employed person dares to tell you to go out and "get a real job" - tell them to learn a bit about how business works before they dare to question what you're doing