investment methods for freelancers

How To Start Investing As A Freelancer: 5 Low-Risk Methods

I don’t think I would ever retire.

Even if I become filthy rich and save millions of dollars, I would still be writing books and articles. Because I love the work I do.

But, I’d be lying if I said I haven’t thought about retiring.

I’ve dreamed about retiring from all the freelance work someday and writing my own books for fun while relaxing at home.

Of course, as freelancers, we never have that option. Unlike other jobs, we don’t get retirement pay or 401(k) as they do in the US.

Long ago, I thought about this a lot and decided to start investing. I’m very careful about taking risks with my money so I never invested in any volatile schemes like cryptocurrency or NFTs.

I only invested in secure and low-risk investments. And I managed to make a little bit of money from these investments.

Today, I want to share some of the low-risk investment methods I’ve used to make sure the money I make from freelancing continues to make me money.

Important: I’m not a financial advisor and I have no qualifications to tell you how to manage your money or what to invest in. The following tips and methods are the ones I’ve used and found to be effective. Do your own research before investing your money.

Very Important: Never invest the only money you have. You should only invest the extra money you have after paying all the bills, expenses, credit cards, taxes, etc. Keep in mind that you will be taking risks when making some investments.

Method 1: Invest In Yourself (No Risk)

invest in yourself

If you only have a small amount of money like $1000 dollars to invest, don’t even think about investing it in anything but yourself.

You should always first and foremost invest in yourself. It’s the only way to make sure that you earn more money so that you can save more.

For example, I recently bought an annual subscription to Skillshare. It was an investment I made in myself. I’ve used this subscription to learn lots of new skills and expand my horizons as a creative professional. And it allows me to earn more as a freelancer.

Whether it’s a book or an online course, invest in something that expands your knowledge.

Or invest in better equipment to help you do better work. It could be a new computer, a new keyboard, or a drawing tablet.

This is the only investment that involves zero risk and has the highest returns.

Method 2: Invest In Index Funds (Low Risk)

invest in index funds

Once you have enough money saved up to invest in something, you should consider investing in index funds.

Index funds are one of the safest methods of investment. And this is the best investment method recommended by Warren Buffet, one of the richest people in the world.

Index funds are a type of investment you make in stocks. But unlike investing in just one company, you are investing in multiple companies.

As the name suggests, index funds are created with money invested by lots of people. When you and others invest in it, the company that manages the fund invests all that money in stocks of different companies.

The management company of the fund has experts who decide which of the top-performing stocks to invest your money in. In the US, there’s S&P500 and other countries have an equivalent list of top-performing stocks.

When you invest in just one or two stocks, your chances of losing money are very high. But when you spread that money across lots of companies, the risk gets lower and the reward is higher.

Method 3: Invest In Treasury Bills & Bonds (Low Risk)

invest in treasury bills

Treasury bills and treasury bonds are another type of low-risk investment you can make. And they are very easy to invest in as well.

You can usually go to a government bank to buy T-bills and T-bonds safely without any intermediaries.

With treasury bonds and bills, you are basically investing in the government. And the government will then pay you an interest fee every six months or at maturity with your money paid back in full.

Governments sell T-bonds and bills to raise funds to finance various government expenses. And you get to make a profit from it.

T-bills and bonds usually pay a much higher interest rate than a traditional fixed deposit account. And involves very low risk.

Method 4: Invest In Real-Estate (Low Risk)

invest in real estate

This is one of the safest investments you can make but the downside is that it requires a big amount of money and you have to wait a very long time to reap the rewards.

Investing in a small plot of land, a house, or even an apartment building (if possible) is something that will always reward you in the long term.

Real estate prices have always gone up over the years. If you buy a plot of land or house today you will be able to sell it for double the cost in 5 to 10 years in the future.

If you don’t mind that long waiting period, this is something that’s guaranteed to be a great investment. That’s of course given that you do buy property.

However, there’s also a much faster method to make profits with real-estate investments. That is to buy properties and houses to renovate. And then selling them for profit. But that’s going to require a lot of work.

Method 5: Invest In A Retirement Account (Low Risk)

invest in retirement plan

In many countries, financial institutions offer retirement accounts where you can save your money without having to worry about taxes.

These are called IRAs, or individual retirement accounts. These are retirement plans specifically created for self-employed people, like freelancers, to save money and then withdraw at retirement age.

Investing in an IRA has very low risk but it has a big downside. You can only withdraw that money after you are 60 years old.

I don’t know about you but I don’t want to wait until I’m 60 to retire. Thankfully, there are other alternatives to this you can take.

For example, most insurance companies have retirement investment options similar to IRAs. They, however, offer more flexible options for withdrawing your savings. And there are some plans that will pay you a monthly salary upon maturity set by the company.

Look into your local insurance companies if you prefer to take this much safer route.

Always Remember This..

The methods I’ve mentioned above are some of the safest investments you can make to earn a return over a long period of time. Simply put, it will take years before you could actually make good returns from those investments.

So don’t expect to become a millionaire overnight by investing in them.

That brings me to another important aspect of investing. And that’s investing in extremely high-risk methods.

Do not invest in things like cryptocurrency, NFTs, or volatile stocks. Unless you have millions of dollars that you don’t mind gambling away, go for it. Otherwise, be a wise and slow turtle and take the long and safe approach.


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