Is freelance for you?:: Business Line

Contracts which pay as per milestones achieved are better than those which pay at the end of the project.

A tough job market these days is nudging many to go the freelance way. But even in better times, going independent and taking up freelance assignments has had an innate appeal. The benefits of freelancing are clear – you are your own boss, do work you are really cut out for, you have flexibility in timings and possibly better earnings too.

Many people including experienced professionals seem to be looking at freelancing as a full-fledged career option. “There is a myth that freelancing is a choice made by people not serious about their career. Our data shows that the largest segment of freelancers have spent a long stint in the corporate sector and have now opted to go solo to have more control on the quality and content of their work and their schedules,” says Chandrika Pasricha, Founder and CEO of Flexing It, an Internet-based platform which connects freelancers with clients.

ASSESS THE OPTION

Before you decide to join the freelance bandwagon, consider the pitfalls and assess whether you are cut out for it. You will have to work on your own – without the support system of a regular workplace.

As a freelancer, you will have to compete with people with similar skill sets from around the world. Therefore you have to be quite competent in the skill you plan to capitalise on. You must also be ready to make the necessary investments in equipment and infrastructure at home. For instance, it makes sense to get a high-speed Internet connection. Also, if there are frequent power cuts in the area you live in, investing in an uninterrupted power supply system is a good idea.

The competition is fierce. So, first you may have to be patient for work to come your way. And when it does, you must strive to deliver high quality, on time. As Bharati V., a Chennai-based freelance content writer puts it, “You have to establish a reputation and live up to it.” Unfavourable client reviews can cost you assignments and income. There may be lull periods when project flow may be down to a trickle.

You must have the emotional and financial muscle to see this through. Then, there is the bugbear of multiple revisions and changes in project scope due to which you may have to work extra without additional pay. Many freelance writers state upfront the number of revisions (say two or three) they are willing to do without charging extra. But for multiple revisions and changes in scope, you must be ready to negotiate hard to get your dues. Chandrika Pasricha of Flexing It advises having complete clarity on what the client expects before you sign up. Finally, some clients may delay or default on payments. Getting an advance before commencing work could hedge this risk. But this may need good negotiating skills and a solid track record.

ONLINE PLATFORM

Freelancing, traditionally, meant leveraging your contacts in the real world and using positive word-of-mouth to bag client assignments. But over the last few years, the online model is gaining ground. Web-based intermediaries such as oDesk and Elance provide a meeting spot (a marketplace of sorts) for clients with jobseekers. This has expanded the market significantly, providing freelancers the opportunity to work on projects from across the globe. There is a wide range of jobs available in categories such as writing and translation, web development, design and multimedia, sales and marketing, and administrative support.

Bids and payment for work on many of these portals is in dollars. Jobs could be paid for at an hourly rate or on a fixed price basis, depending on the scope and complexity of the work. Client budgets vary widely. For example, writing assignments on Elance have budgets from $3-4 an hour to $40-50 an hour, and some have fixed price budgets of more than $10,000. Sometimes, clients may not have specified a budget. To be eligible to bid for work, freelancers are required to post their profile on these Web sites detailing their skills, education and experience. If a freelancer clears certain skill based tests on these Web sites, it adds to the profile strength.

This along with factors such as the bid price and track record (ranking based on client feedback) on previous jobs influence the chances of winning a bid. As you gain reputation, you may be in a position to bid at higher rates (and win). To ensure quality, the number of assignments a freelancer can take up at a time could be restricted. Payment is usually routed through an escrow account maintained by the website that takes its commission (could be up to 10 per cent of the bid amount) when the client gives the go-ahead to release the amount to the freelancer.

How to make your mark

Whether you take up assignments online or offline, success as a freelancer calls for a high degree of discipline. Being focussed and adhering to timelines and quality standards is paramount. Enter into a contract which is comprehensive regarding scope, timelines, payment terms and expectations from both sides. It is wise to enter into contracts which pay you as per milestones achieved or on a regular basis, rather than at the end of the project. This can avoid unwanted surprises. It is important to keep yourself constantly updated. When you freelance, you are essentially starting your own business.

Think like an entrepreneur. Expect the lean seasons and plan your finances well. And yes, remember to pay your taxes. There is no escaping that.

HDFC Multiple Yield 2005: Invest:: Business Line

India won't seek IMF funds in five years: Rajan

India is not facing any economic crisis and won't approach IMF for funds in the next five years as the country has enough forex reserves, Reserve Bank Governor Raghuram Rajan has said.

"There's no way we are close to being a country in financial or economic crisis...There's not a chance we will go to the IMF for money in the next five years," he said at CNN's Debate on the Global Economy.

The Reserve Bank has taken a series of measures to strengthen rupee and promote growth.

Allaying fears of India not being able to meet its financial obligations, Rajan said: "India's external debt to GDP is 22 per cent. 22 per cent of GDP is external debt and India's has reserve of $280 billion which is 15 per cent of GDP."

In other words, the country can pay three-fourth of its debt from its forex reserves, he said.

"Out of total short-term external debt that we have to pay for is 10 per cent of GDP. So, we have enough reserve to take care of that," he said speaking on the sidelines of the fund's meeting here.

He said: "We bought over $60 billion dollar gold last year. $60 billion accounts for three-fourth of our current account deficit. If the push comes to shove, we can pay the world in gold."

He said while India's economy has slowed, the country's forex reserves are large enough.

"We need to bring back growth now. But we're still doing better than a significant number of economies in the world," he said.

India's economic growth fell to a decade low of 5 per cent in 2012-13 fiscal, while its current account deficit soared to an-all time high of 4.8 per cent of GDP that year.

The Indian currency, which depreciated sharply after US Fed announcement of stimulus tapering in May, has pushed up cost of imports, mainly crude oil and contributing to inflation.

During the debate, Rajan also warned that "easy money" created by the US Fed's stimulus policies is large part of the problem.

"Easy money is part of our problem," India's top banker said.

Finance Minister P Chidambaram, who is also in Washington, has dismissed IMF's growth projection of 3.75 per cent for India as pessimistic.

He said the country's economy is expected to grow by 5 to 5.5 per cent in the current financial year on back of good monsoon, robust farm output and impact of reform measures undertaken by the government in past one year.

Both Chidambaram and Rajan are here to participate in the Fund-Bank meetings.

Other participants in the debate included Christine Lagarde, Managing Director of IMF, Gang Yi, Deputy Governor of People's Bank of China, Luis de Guindos and Minister of Economy and Competitiveness of Spain.

The magic formula for creating long-term wealth

Those who have surplus money often invest blindly. If you are one of those, here's what you must need to know. Read on before you write out that cheque.

Whenever people have surplus money, they want to invest. When they invest, they just want to act or execute. They don't want to spend time on understanding the product and various investment strategies. They would like to take investment decisions without doing any homework. There is no plan of action. Their attitude is: I have surplus money; just tell me where to invest.

Misselling

These kinds of investment decision-making will make you fall prey to misselling. As you are not interested in doing your homework and if someone comes with a long chart and calculations for 20 years, then you may find it interesting and end up buying products like ULIPs. 

When you realise that you have invested in a mediocre product, you will blame the agent or broker and not yourself and your wrong decision-making approach.

Market moods

When you just want to act, your investment decisions will swing based on the market moods. If the stock markets are highly volatile and starts falling day-after-day then you may think that instead of investing in stock market investing in debt funds or fixed deposits is safe and wise.

If the stock market goes up and everyone is investing in the market including your driver, then you may think it is better to invest in shares or equity funds. So in this case you will never buy low and sell high. In fact you end up buying at peak and avoiding the market when the share prices are low.

Aggressive trading

Blindly, some investors believe that doing aggressive trades in shares and derivatives is the quickest way to make money in the stock market. They enjoy their higher degree of involvement with the stock market. They feel very happy about the few successes in the stock market which give them comfort in accepting many losses.

They don’t go back and calculate how much they have made or lost in a trade; what is the total profit or loss they have made in a particular year. These investors will learn very old lessons of investment after losing a huge amount of their hard earned money.

The author is an MBA (Finance) and Certified Financial Planner. He is the Founder and Director of Holistic Investment Planner

India forex reserves surge to $277.73 billion

India's foreign exchange reserves surged $1.46 billion to $277.73 billion in the week ended October 4 on the back of a healthy growth in the key currency assets, the Reserve Bank said on Friday.

The reserves had dipped by $1.12 billion to $276.26 billion in the previous reporting week.

The core foreign currency assets (FCAs), which form the largest chunk of the reserves, zoomed $1.4 billion to $249.33 billion for the week under review, the RBI said.

FCAs, expressed in dollar terms, include the effect of appreciation or depreciation of the non-US currencies such as the euro, pound and yen, held in the reserves.

After remaining unchanged for five weeks, gold reserves increased $41.3 million to $21.76 billion, according to the RBI data.

The special drawing rights rose by $14.7 million to $4.439 billion, while India's reserve position in the IMF shot up by $7.2 million to $2.197 billion, the data showed.