Employed and self-employed/freelancers both comes in the left side of cash flow quadrant as per Robert Kiyosaki. Both earn active income. However full-time employee might get some of the benefits such as provident fund, paid leave, gratuity etc in addition to their monthly salary. Even though the benefits thus given becomes part of CTC and part of pay package agreement they get the advantage of automated financial plans to some extent for retirement and insurance etc which is lacking in case of self-employed. It is possible for self employed to make a package for saving and insurance as a part of financial planning in the same line of employed individuals.
So how they can create self-made benefits package?
- Pay yourself first. Keep drawing a fixed salary from your business.
- Enrol for National Pension Scheme (NPS) and make bank ECS for fixed monthly subscription.
- Subscribe to Public Provident Fund with fixed amount based on income.
- Get Term Life insurance.
- Get health insurance.
- Plan your taxation and pay due taxes in time.
- Plan vacation, budget ,save and invest to create fund for the tour cost as well opportunity cost of your absence from the business.
- Create financial goals, both short term and long term and plan systematic investments like Mutual Fund SIP selecting schemes and tenure matching your goals.
- Take leave for yourself and family because you deserve it.
Be wise, money-wise.
Chartered Financial Analyst (ICFAI)