As an entrepreneur with your own business or a person who is self employed as a freelance employee, you reap all sorts of rewards. First, you can have the reward of simply setting your own schedule, answering to your own needs, and being flexible when situations arise that require your attention. Also, you have the benefit of making the amount of money that you need to fit your budget.
You are not required to sit at a desk for a set number of hours. If you are done with your work, you can move on with your day. But if you need more time to finish a task or to make a higher income, you have the freedom to do that without first asking permission from a supervisor.
You do not have to sit through meetings with managers and co-workers, nor do you need to have performance reviews for your work. You are answerable only to yourself or to clients with whom you work directly. There is no need for a middle man if you are self employed or own your own business. The freedom to work at your own pace and in your ideal working conditions is one of the biggest perks of being a self employed entrepreneur.
Another huge benefit is that you can set up a solo 401k plan. This is a retirement fund, much like a regular 401k plan, but specifically designed for single employees of a privately owned business or self employed persons. This also applies to someone who owns their own business and employs only his or herself and a spouse. This plan is not only good for retirement but also for tax free investments. It is a good business move to both plan for your future and make your money work for you in the present. If you are able to save a large sum of money, why not put it towards investments and retirement, rather than letting it sit in a regular savings account with a low or nonexistent rate of interest? Instead, setting up a solo 401k plan allows for tax-free gains to ensure that your money is working for you.
Setting up a solo 401k plan does not have to be too difficult. It may seem confusing at first, but with the right information and a good banker, financial consultant, or investment coach, it does not have to be beyond your abilities. You must first choose whether you want a regular plan or a Roth plan. The former allows you to deposit money on a pre-tax basis. Then the gains from your investments are tax deferred until it comes time for you to make a withdrawal. If you choose a Roth plan, you pay income tax at the outset, when you make the contribution to the account. Then the funds with grow tax free and you will not be hit with tax fees when you make a withdrawal.
A brokerage firm or financial consultant will have information on possible investments for your solo 401k plan. These investments may be real estate, gold and other precious metals, or foreign investments. The stocks, bonds, and mutual funds that you choose will work together to earn high gains on your account, ensuring that your retirement investment pays off.
Be sure to get all the information regarding any annual fees, what an early withdrawal fee might cost you, and what the maximum annual contributions are on your 401k account. You can even find out information on taking a loan such as self employed loans out from your own account, which will likely be at a very low rate of interest and thus give you another reason why this account will serve you well.