Forbes published an article yesterday on the important topic of the gig economy and, in general, the loss of financial security and employment benefits that accompanies this trend. This is a huge issue in out lives that, in my opinion, is not getting nearly the attention required by advisers like me. It is foolish for any of us to ignore the risks and downsides of self-employment.
The Forbes article actually swings to an announcement and advertisement for new platforms offering employee-like benefits and insurance to gig workers. I’m not at all convinced that is the best answer; at least not the place to start for the majority of gig workers in smaller niche markets. I’ve been involved in the development of online benefits platforms for independent contractors since 1995 with the successful launch of Medsave and Freedom Benefits but have developed a healthy dose of skepticism in that approach over the years. While shiny online technology is great, it tend to skip over the need for in-depth personal communications over a wide range of inter-disciplinary topics. For example, a person going through a divorce and starting a new line of work to make ends meet can’t make a good decision about basic health insurance without understanding the legal realities and timeline of a marital settlement, which may, in turn be affected by the need for other personal counselling. Gig work and its financial consequences are tied to every other aspect of our lives.
The best place to start is with a simple discussion of a financial strategy that works in tandem with your life and gig business plan. Even if you have done little planning and have zero budget for your startup project’s financial planning, that is still where you need to start! I find that many people doing gig work must start with a no fee consultation just to get some pointers in the right direction. I offer a few of these each week and I like to think that the outcome winds up as the most profitable minutes they spent all week.
It helps to lay it out: if you are going to break away from a traditional employer/employee environment and take on responsibility for your own financial success, your own insurance, health and retirement benefits, then it is foolish to do so without extra help and advice.
The reality is that we can be successful with the gig economy but very few start at that position. It takes time, luck and hard work. Access to good advice – whether for strategy, marketing, accounting, taxes, insurance, legal or other topics – will speed up the process toward gig economy success.