Financial PlanningAAM I’m self-employed. Do I need financial advice?

I’m self-employed. Do I need financial advice?

The switch from a salaried role to self-employment has challenges as well as rewards – especially in the areas of taxation, pensions, and mortgages.

There are lots of great things about being your own boss, including the flexibility to work when and where you like, as well as more control over your commute and your working environment.

However, there are downsides too, and one of these is the temptation to take on every possible workplace role yourself, whether it is cleaning your own office or managing your own finances.

The most successful self-employed people know the points at which it is wise to call in the experts. And one of these is when you are dealing with your business and personal finances. A wealth manager can help you with all those issues that run the risk of turning into a tangled and complex mess if you try to tackle them alone.

New business concerns

When you are setting up as self-employed there is a lot to consider financially such as ensuring that you are keeping meticulous records of expenses related to your business, many of which can be claimed back through your tax bill, setting aside money to pay your tax bill rather than relying on an annual bonus to provide the funds, and managing both your business budget and your personal budget.

A wealth manager will be able to help you keep on top of all these new issues, and ensure you are not missing out.

Where professional meets personal

Self-employed people usually find that many of the financial concerns they have when they give up salaried employment are to do with their personal cash flow and planning rather than their business. That is because when you are self-employed, the management of your personal and business finances often become linked.

For self-employed people, monthly income is often uncertain, but outgoings are fixed. Paying for day-to-day living requires a degree of financial planning that is usually not necessary when you are in a salaried position. On top of this, you are responsible for saving for old age without the help of employers’ contributions to your retirement provision, and you are in charge of ensuring that your family will be able to survive if you are unable to work through illness.

A wealth manager will be able to ensure you have the correct savings plans and insurance policies in place to prepare for unforeseen events, as well as money set aside for retirement.

Homeownership headaches

When you become self-employed, you may not be aware of all the financial consequences of being your own boss. As well as managing income fluctuations, it can be more difficult to get a mortgage, as lenders are sometimes nervous about the amount of money you have coming in to cover the repayments. A wealth manager can help you to navigate the maze of lenders, all of which have different criteria for lending to the self-employed, as well as ensuring you have the correct evidence in place to prove that you are a good candidate for a loan.

A holistic approach

The rewards and challenges of self-employment are considerable, but to make the most of them it is important to be clear about your financial goals and how you are going to work towards them.

A wealth manager can help you to understand your risk appetite as well as your ambitions and create and manage a portfolio of investments that works for you. In addition, they can help structure your finances in the most tax-efficient way possible.

So however many responsibilities you choose to shoulder as a self-employed person, being your own wealth manager should not be one of them. Getting an expert in could make all the difference. So, contact us today for a free financial planning consultation and get all your financial affairs in order.

Important information

This article is intended for general circulation and information purposes only.  It may not be published, circulated, reproduced or distributed in whole or part to any other person without prior consent of AAM. This article should not be construed as an offer, solicitation of an offer, a recommendation or provision of financial advice. The information does not take into account the specific investment objectives, financial situation or particular needs of any person. Advice should be sought from a licensed financial adviser before making any decisions. Whilst we have taken all reasonable care to ensure that the information contained in this article is not untrue or misleading at the time of publication, we cannot guarantee its accuracy or completeness. Any opinion or estimate contained in this article is subject to change without notice. AAM Advisory Pte Ltd is licensed by the Monetary Authority of Singapore, FA Licence no. 100032.

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