- Irregular income patterns make it harder to plan your investments
- Investing as early as possible tends to deliver better returns, but drip-feeding money in gradually can feel less risky
- Build a cash cushion to avoid having to sell assets when their values have fallen
Working for yourself can make financial planning more challenging. Your income often fluctuates from one month to the next so your tax bills are not as predictable, but your expenses don't necessarily reduce. Not surprisingly, sticking to an investment plan isn’t the easiest thing to do. But with some discipline and forward thinking, you can still take a strategic approach to your investment strategy and grow your portfolio effectively.
You might be tempted just to invest a lump sum at the end of the tax year when you know exactly how much you have earned and how much your tax bill is likely to be. But James Norton, head of financial planners at Vanguard, says that doing this could mean missing out on valuable time in the market. Instead, he suggests making smaller monthly contributions and topping these up with any extra cash at the end of the year.