Managing capital as a outworker

Scrutiny of the finances

"Play to your strengths: no one will achieve excellence in an area of weakness," Leonard states. "To live a strong life and to enjoy success in your career you should capitalise on your strengths and simply manage around your weaknesses." A helpful method to manage money as a outworker is usually to document your income, recurring outlays and unforeseen expenses. Here's how:
- Record all the recurring expenses including rent, water and lights, insurance etc.
- Keep a written record of your income - with time you will be able to anticipate your more profitable months.
- Dont forget the tax man and payments that are due to him.
- Keep a credit card on hand for months where you may be a bit strapped for cash - be careful to use your credit card wisely as to not go into too much debt.

Spend a litte less than you make and invest a handful

Leonard states that simplifying your life is a great way to spend less. Keep in mind that everything you buy or every credit agreement you enter into (such as a cellphone package, health club membership or magazine subscription) has its own set of weights and accountabilities. The difficulty with progress is that we find ourselves wedged in a vortex of acquiring more at quicker speed, to the point that any increase in income is quicky digested by an unquenchable desire to acquire more. Unless we ask ourselves how much is enough and consciously create a margin in our monthly budget, we will never earn enough, and we will never be able to save.

A highly effective means of saving is to set up an automatic payment from your cheque account into an investment which you then forget about. This is a decision that is made just once (as opposed to ad hoc payments every month/year) so a percentage of your income is committed to your savings. Cellphone and holiday companies catch you in a similar way, in one moment's decision you are committed to paying them for a long time."

Get the best return on your nest egg

"Saving R1 000 per month at a return of 8% will give you R3,4 million after 40 years," Leonard claims. "If you increase that return to 10%, you will have R6,3 million at the end. The best long term results are derived from buying into companies. You do this by investing into shares, and you can invest in shares directly through a stock broker or indirectly through vehicles such as unit trusts.

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Income tax is able to be a difficult subject when you are a self-employee. To avoid the pitfalls of tax and submitting your tax returns, think about the use of a tax consultant. Constantly seek advice from friends and relations in a similar circumstances. Find out who does their taxes. It is always hard to beat individual practice, and you can be guaranteed a honest point of view. Mostly important, once shopping for a tax consultant, you need someone who you can be comfortable with with your finances. Thus here are a few useful tips in seeking an honorable tax consultant.

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