By 2020, it is predicted that 45% of the Canadian workforce will be self-employed, either full- or part-time. Keeping on top of your financial planning is hard enough with a steady job, but add self-employment into the mix and you have to deal with confusing tax implications, an uneven income stream, and probably even less time to keep on top of personal finances.
A Certified Financial Planner® professional can give you the confidence in your finances that you need to be happily self-employed.
Adjusting to an Unsteady Income Stream
Scott Plaskett, a CFP® professional and CEO of Ironshield Financial Planning, frequently coaches clients who are new entrepreneurs or who want to become entrepreneurs. The transition from a steady paycheque is usually one of the hardest adjustments to make. “Cash flow is less predictable, more lumpy, and we can help them manage it. We give business owners an understanding about personal cash flow management so they can be successful,” he says. Having a solid financial plan gives new entrepreneurs a boost of confidence, which is a vital ingredient in the recipe for success.
Self-Employment: The Path to Getting what You Want Out of Life
Scott is a strong proponent of self-employment. “It’s the greatest way to get what you can out of life and work, doing something you enjoy.” He’s a big believer in lifestyle planning alongside financial planning. He says business owners may work more, but they can often work flexible hours—an attractive advantage of being self-employed.
“People are attracted to self-employment because they can create a family-friendly work environment for themselves,” he says. An Intuit survey that predicted that 45% of the Canadian workforce would be self-employed by 2020 backs up Scott’s viewpoint. Of the current self-employed Canadians surveyed, 47% were doing it for a better work/life balance.
Fear of the Unknown
In his experience, Scott says the biggest concern for clients who want to be self-employed is the fear of the unknown. “They’re in an unknown environment, and they don’t know what they don’t know. There is no playbook. That’s where a CFP professional comes in, to give them the playbook for what they need to do. We make sure record-keeping is in shape, walk them through compensation planning, how to retain profits—we take a holistic view of everything they need to do as an entrepreneur.”
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