Pay back your debt as fast as possible.
Freelancers Finance rule number 2.
Thank you dad!
Luckily that was one of the most important things my father taught me related to finance: Never raise a loan and get in debt. Or he also used to say if you want to loose a friend, lend him money. That might sound old school since we live in a capitalistic system which functions based on credit, interests and doing business with the intention of growth. It do not means you have to stay away of our economy. It simply means you have to be in the right position of this system.
Debt is modern slavery
Slavery is a though word i know. There is lots of room for interpretation and debt is obviously not the kind of slavery happened in history. Slavery used to be or still happens in brutal ways. But nevertheless debt is a soft form of modern slavery. You have to understand this. I’ll try to explain it as simple as possible.
If you are in debt you owe money to the bank or to a person. While you can’t pay it back the amount of debt keeps increasing rapidly. They charge interests and they compound over years or months. So if you wait too long to pay them back the debt grows exponentially due to compounding interests. The longer you wait the more you owe and it increases parabolic.
So it don’t matters what debt you have: student loans, credit card debt, small credits, small loans, they all compound over time due to credit interests you have to pay. So what’s the slavery now? We only have a limited time on earth and time is money. The more money you have the more options you have how you want to spend your time. But if you are in debt you are working your whole life paying back the debt. You have less options and less free time learn new things or enjoy life. That is why i consider it as asoft form of slavery because some people work five days a week the whole day and stay trapped paying back their debt.
The freelancers advice
Of course this is an advice not only for freelancers because it is a fundamental decision to live a free life. But especially for freelancers it is important to follow that rule. You don’t decide to freelance because you want to build a huge company focused on growth. It is a decision to be your own boss and do what you love most for whoever you decide it to do. You get it, its about freedom. Of course you can decide to go a riskier path take loans, rent equipment and do business with the confidence to earn high returns in the future. But if you fail you might risk your freedom and reputation.
Get the Freedom
This is why my advice is to pay back what you owe as fast as possible and avoid debt in any case. Work with the income you generate and if it is not enough lower your spending or consider to work on a side-job to stabilize your income temporarily.
This is how you build your freelancer business on a rock steady foundation and with small but sustainable steps you get to the freedom where you can decide when you want to work and on what projects you want to work.
Get the freedom where you can decide
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This is no financial advice. Everything written is my opinion only and you should do your own research. Investing in Bitcoin and other cryptos, lending, DeFi, liquidity mining are high risk investments. You could lose everything, only invest what you can afford.
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