Making sure your money lasts longer than your business

One of the advantages of being self-employed or having a small business is that there is no ceiling on your income. You can charge as much as you like (if people will pay it) and work as hard as you like

Although as many of us know, there is no floor either!

Getting paid adequately for the effort you put in and the risks you take is not just fair-it is essential so that you can live comfortably and invest for your financial future when work ends.

Employees paid a regular wage receive many benefits that the self-employed don’t. One of these is superannuation or pension contributions. Every time they get paid, a contribution is made to their retirement fund. This means that money is being invested regularly for them in growth assets such as shares and property.

Those contributions and the returns that compound on them mean that many retire not needing any government assistance such as age pension.

Unfortunately, many self-employed do not make regular contributions because there is no statutory requirement to do so and often many feel they are not making enough money to afford those payments

Corporations price for profit including employees’ superannuation contributions. The self-employed should too.

If you cannot put away between $15,000 and $30,000 every year for your future, you need to increase your prices.

As an example, if you charge 30 hours a week and work 46 weeks a year then a $10 per hour increase means you earn $13,800 a year.

Put it straight into your retirement fund!



The Mechanics of Money

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