Six Smart Investment Tips for Freelancers

Winner Ajibola


As a freelancer, your finances and investments should be the most important thing to you. Because, through investments, you can get the level of stability associated with steady cash inflow. However, while starting, this might be pretty overwhelming. This post will offer six simple tips you can use to invest properly as a freelancer or remote worker.

Understanding Investments

Investing is purchasing an asset that you think will increase in value over time. The assets you buy are called investments. They could be real estate, bonds, stocks, foreign currencies, or gold. So, for example, you might buy a plot of land in 2022 because you’re confident that this land will appreciate over the following years. That’s an investment. 

There are different types of investments depending on your risk tolerance; 

  • High-risk investments offer a higher return but tend to put your money at very high risk. People also refer to them as volatile investments. Some high-risk investments include hedge funds, cryptocurrencies, foreign exchange, and even Angel investing.
  • Medium risk investments: These types of investments expose your principal to average risk and returns. They include crowdfunded real estate, stocks, bonds, mutual funds, etc.
  • Low-risk investments: more suitable for short-term investments, they offer low returns and expose your principal to minimal risk. Some examples include high-yield savings accounts, treasury bills, and dividends.

Why You Should Have Investments as a Freelancer

You might be skeptical about investing some of your income as a freelancer. However, investing is essential for everyone, and here’s why;

1. It can be your safety net since you don’t have a very stable inflow of payments

2. You can earn a passive income from the returns on your investments

3. Investing in your specific short or long-term goals helps you reach them faster

The Challenges of Having Investments as a Freelancer

While investing is an excellent way to improve your earnings and grow your wealth, being a freelancer doesn’t make it an easy feat. 

For one, you can’t predict your earnings over the next year, so staying consistent becomes difficult. Because what happens when you lose your job? There’s also the issue of being underpaid for some jobs, so after recurring expenses, there’s just not enough left for investing. 

However, there are specific methods you can incorporate that will help you start an investing culture.

Six Tips for Investing as a Freelancer

Here are six tips guaranteed to help you build an investment culture and excel at it;

1. Create Goals to Help You Budget Better

Your goals help define the next step of your career, life, or growth. And so, setting up plans on what you hope to achieve with your investments enables you to get to that next stage faster. 

For example, if you desire to move into a new house in five years, setting up an investment plan for this goal allows it to become achievable. So spend time listing out both short and long-term goals. Clearly stating your goals makes budgeting easier.  You commit a certain percentage to your plan and then fund it over time. 

2. Invest in Stable Currencies

If you use a currency, highly susceptible to inflation, no matter how much time you spend investing, you won’t get the total value of your earnings. This is why in addition to saving in your local currency, you should also invest in a steady currency like USD, EUR, and GBP.

We recommend using Grey to receive and send payments into your investment accounts if you’re getting paid in these currencies. And if you aren’t yet, create a virtual foreign account so you can easily carry out international transactions whenever necessary.

Read also: How Virtual Accounts are Helping Freelancers Connect with the Global Market

3. Start with Low-Risk Investments

While there might be the urge to jump into high-risk investments immediately, it isn’t always a wise step. You must conduct thorough research and get stable enough to risk your principal on a volatile investment. Investing as an online broker is quite different from investing as a freelancer.

Starting with low-risk investments helps you build a stable portfolio and study other markets. It’s also a great way to meet your short-term financial goals. 

4. Create a Separate Savings and Investment Account

Your savings should be for emergency funds and other unexpected expenses. So once you start mixing up long-term plans with short-term ones, separating your finances over time becomes difficult. With different accounts, you can easily set targets and follow through on each one. You’d also see firsthand how well you’re doing along each journey. 

5. Invest Your Increase First 

If you get a raise at a particular job or a bonus, we recommend investing it for at least the first three months. While you might be tempted to splurge, this is a great time to boost your assets without breaking the bank. 

Over time, you can then draw up another investing plan. For example, you can choose to invest 20% of your earnings plus whatever bonus comes in. This will help you reach your investing goals faster.

6. Research and Diversify

It’s essential to diversify your investment portfolio. Asides from earning more, you don’t want to lay all your eggs in one basket. If there’s a high risk involved in one type, it’ll affect your entire funds if it goes south.

So instead, conduct ample research and spread your investments across multiple types. For example, if you invest in the stock market or crypto wallet, you should complement that with a high-yield savings account. 

Next Steps

You’d reach investment goals faster when you separate your savings, diversify your portfolio and opt for low-risk investments. Investing in stable currencies is also essential so inflation doesn’t catch up with them.

We recommend creating a foreign investment account with the Grey Mobile App. It’s free and available to download on the App Store and Google Play.

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