How To Make Self-Employed Earnings Useful
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How To Make Self-Employed Earnings Useful

Life for the self-employed is not all work. They can use their work earnings to invest and make the dollars more valuable and then make their personal life more financially secure and rewarding.

Money earned at work by the self-employed American can be turned into an allowance for life that the independent worker is free to use for their long term plans. Plans that can produce secure personal finances, and a big investment in the future.

Even a full lifetime learning plan is something that can be afforded.

1. Make a personal financial plan for the earned money paid into the personal account. Set some rules for making work pay in the life away from work. A careful financial planner can expand their life plans once they know they can count on having the money to buy the things they want and do everything that is not good to put off until tomorrow.

Get back a better life in return for the hours spent at work.

2. Save money steadily. Always take out 1 dollar to 100 dollars from work earnings to support living. And never stop. Setting aside money on one day can count for a little. But it can not count enough for living life to the fullest until the end.

3. Start an investment account. Not all personal money has to stay fully safe. Invest a count of dollars in an account that grows. Pick out an SEP, an IRA, or a SIMPLE IRA that can fit in the self-employed's finances. Up to $5,000 can be saved in an Individual Retirement Account (IRA), and the money and earnings will not get taxed until money is withdrawn. After the investor turns 50, they can add another $1,000.

A Roth IRA is another investment option. The money that goes into the account is already taxed. But, the earnings do not count for income taxes if kept in the account for at least 5 years.

4. Open a retirement account. It is the most secure long term investment. Take another 1 dollar to 50 dollars regularly and put it into a secure interest bearing savings account or an interest earning investment account. The dollar given up today will be worth more the day during retirement it is spent.

Another IRA account labeled retirement money is a practical choice.

5. Buy bargain goods and services that make the long term work development greater. Keep spending within an allowance amount that does not take away from work money, but hand over enough money to get valuable things in return that can help you learn. A money box is a good place to start. Then, the tool best for the work. A computer for virtual desk work. And, a class on the new work enterprise coming up next year on the calendar, from A to Z.

Tip. Do not make early withdrawals from the savings and investment accounts. The life savings will shrink and the investment money can get taxed. There also might be a penalty before age 59 1/2. A withdrawal from a SIMPLE IRA during the first two years can cost an investor a penalty up to 25 percent.

Source:

U. S. Labor Department, Savings Fitness: A Guide To Your Money and Your Financial Future (October 2010).

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