In January 2024 was held the first lecture on "Personal Finance and Freelance Practice", led by Ivelin Metodiev.
The lecture covered aspects of managing personal finances in cinema and advertising, including social security, fee management and taxes.
We focused on working through our own company, civil contracts, financial buffers and investing.
Ivelin is a first assistant operator with an accounting education.
Working through your own company or working on civil contracts:
One of the main aspects of the event was comparing working through one's own company to engaging in civil contracts. Here are some key differences between the two:
Tax obligations:
Self-employed individuals are responsible for paying their income tax and national insurance contributions, while those working on civil contracts usually have these deductions made directly from their earnings.
Access to benefits:
Self-employed individuals may not have access to the same benefits as employees on civil contracts, such as paid leave, sick pay, or parental leave.
Income stability:
Civil contracts can offer a more stable income stream compared to self-employment, where income can vary significantly depending on project availability. However, in the film and advertising industries, this advantage may not be fully applicable.
Opportunities for growth:
Freelance work allows for more flexibility and potential for taking on multiple projects, leading to faster career growth. On the other hand, individuals on civil contracts may have limited opportunities for advancement within the same company.
Creating financial buffers:
A financial buffer refers to savings people create to cover unexpected expenses or periods of unemployment. This is crucial for professionals in the film industry due to the unpredictability of the industry and job availability. Some recommended steps for creating financial buffers include:
Calculate the necessary buffer size:
It is generally recommended for people to have living expenses saved for a period of 3-6 months. However, depending on individual circumstances and income stability, this number may be larger or smaller.
Prioritize creating the buffer:
If you already have high-interest debts, it may be beneficial to pay them off first before starting to build a financial buffer.
Automate savings:
Setting up regular automatic transfers to your savings account can make maintaining your financial buffer easier.
Reduce discretionary spending:
Assessing current expenses and making conscious choices to eliminate unnecessary ones can help free up funds for building your financial buffer.
Investing for creative independence:
Investing can be a powerful tool for achieving financial freedom and creative independence.
Here are some tips for prudent investing:
Research and diversification:
Before investing, take the time to research different investment options, such as stocks, bonds, mutual funds, or real estate. Diversify your portfolio to spread risk.
Consider long-term investments:
Short-term investments may be attractive, but they also come with higher risk. Focusing on long-term investments can provide stable capital growth over time.
Consult with a professional:
It is important to seek advice from an investment specialist or financial consultant who can provide personalized recommendations based on your financial goals and risk tolerance.
Stay informed and patient:
Investing takes time and patience. Monitor your portfolio regularly, but avoid making impulsive decisions based on short-term market fluctuations.
The meeting was recorded as a podcast, and you can listen to the entire event here.
