With the market's projected economic slowdown in 2019, this year
might bring some challenges to freelancers and independent contractors who rely
on project-based work to pay the bills. Evergreen financial planning is critical.

Luckily, there are steps you can take to invest, protect and
plan for your financial health, regardless of economic conditions. By exploring
available options, you can select those that best fit your vision, values and
goals for investing your wealth. These tools and resources can get your money
working for you, in good economic times and bad.

There are many challenges that freelancers and independent
contractors face that W-2 employees may not. Projects may not pay consistently,
or work projects may slow to a trickle, leading to inconsistent cash flows.
Follow these strategies to build more wealth from what you bring home.

Strategy 1: Manage
liquidity

There are two primary ways to structure your portfolio to
generate cash when you need it.

• Passive.
  Increase revenue streams by looking into investments that can generate cash for
  you. During cash valleys, the dividends and interest generated by these
  investments are a great additional source of income, without dipping into your
  principle. When you are flush, the money you don't use day-to-day is simply
  reinvested.
• Active.
  Invest in more liquid assets, such as publicly-traded stocks, bonds, real
  estate investment trusts, and other assets that can easily be sold. If you buy
  an individual stock such as Apple or a share in a mutual or exchange traded
  fund today, you can sell it tomorrow. However, if you buy into a hedge fund or
  non-public business, cashing out when you are in need may be problematic.

Read more: What
does it mean to own a moderately balanced portfolio?

Strategy 2: Fund
retirement

As a freelancer or independent contractor, your tax profile is
different from W-2 employees. You are required to pay quarterly taxes and have
different retirement savings vehicles available to you.

Selecting the right retirement vehicle depends on how much you want to save and your tax bracket. Let's break it down by income levels.

A freelancer making a maximum of $25,000 a year might prefer
to fund retirement with after-tax dollars in a ROTH IRA. A freelancer making
more, up to $75,000 a year, may choose to fund retirement with a traditional
IRA to take advantage of the tax deduction. Contributions are limited in both
IRAs to $6,000 for the under-50 crowd and $7,000 for individuals over the age
of 50.

For higher-income earners making up to $250,000 a year,
consider another alternative, a Simplified Employee Pension, or SEP. A SEP plan
offers greater contribution options than an IRA or individual 401(k).

High-earners might consider a 401(k) profit-sharing plan.
This plan lowers an individual's tax burden immediately and only needs to be in
place for three years to reap the greatest rewards.

The profit-sharing component allows you to tax-efficiently
take profits out each year, while the 401(k) component allows you to make
pre-tax contributions for retirement (up to $19,000 for taxpayers under the age
of 50 and $25,000 if 50 and over).

Read more: Stacking
retirement plans accelerates savings and reduces taxes

Strategy 3: Protect what
you own

Wealth needs to be protected. In the wealth management
arena, the term "asset protection" has different meanings and uses. Generally,
it shores up capital against threats from litigation, market turns, fraud and
more.

While there is no way to guarantee asset safety, there are
asset protection strategies that can help shield your assets from unauthorized
access. This might include insurance binders, trusts and offshore accounts, or
investment portfolio strategies, such as bulking up on bonds and non-correlated
asset classes to hedge against market risk. Talk to a wealth advisor about how
to best minimize risks to your assets.

Read more: Lawsuits,
Bears, and Bad Actors: Make Protecting What You Own a Priority

Strategy 4: Integrate
tax planning

Every financial decision has tax and legal considerations.
Minimize your tax bill by understanding what those consequences will be before
making key decisions. This is especially important for high-income earners that
have more to lose when taxes are ignored.

Work with an investment advisor that knows your tax
situation and works in tandem with a tax specialist so tax considerations are
comprehensively integrated into your financial plan.

Read more: Take
a bite out of your tax bill with tax-efficient solutions

Strategy 5: Point
your financial compass in the right direction

Personal finances are one of the most intimate and emotional
conversations we can have with others, which is why so many women find it
difficult to talk about their financial affairs. Learn how to talk money with a
network of like-minded family, friends, and trusted advisors. These outlets can
connect you to resources and solutions that support your financial health for a
lifetime. Join the Women, Wealth & Wisdom network to make connections and
get additional resources for achieving your long-term financial goals.

The earlier you get the conversation started, the healthier
your asset portfolio will be. Start 2019 on the right foot and get your
financial compass pointed in the right direction.

Watch now: Where's
your financial compass pointed?

About the Author

Cindy
Alvarez is a Senior Wealth Management Advisor at Wambolt & Associates in
Colorado, where she has been helping clients achieve their financial goals
since 2012. She is also the driving force behind Women,
Wealth & Wisdom, a women-only educational series and group mentoring
program for building and preserving wealth. Click here to
join with other women taking control of their financial future. Cindy can be
reached at cindy.alvarez@wamboltwealth.com or
720.962.6700. http://www.wamboltwealth.com