If you were to ask the Merriam-Webester dictionary for a definition of a gig worker, the answer is simple: “A person who works temporary jobs typically in the service sector as an independent contractor or freelancer.”
It then adds that gig workers have freedoms that most people in full-time jobs can only dream of: They set their own hours, work from home and are their own bosses.
That sounds incredibly romantic. The real world of the gig worker is probably more a question of crazy hours, being on the run around the clock and having to do a 1 001 things at the same time.
And they worry about keeping so many balls in the air. As an actuary, I’m particularly concerned about their financial well-being. From our research, I know they lose sleep over the following:
- Financial security
- Cash flow and irregular payments
- Lack of medical aid
- Lack of leave benefits
- Access to finance
- Tax planning
- Lack of retirement benefits
This is a mouthful, and not something one type of financial services company can solve for on its own. Working for a savings business, it is particularly the retirement benefits that worry me. While you’re breaking your back to keep your entrepreneurial endeavours together, where do you find time to worry about next year, never mind a decade or two from now? And yes, I know you plan to work forever, but maybe 18-hour days are not sustainable forever.
The World Bank estimates, using two models, that there could be, firstly, a total of 154 million unique registered and 60 million active gig workers worldwide. A second model estimates 435 million gig workers (Working-without-
Do you know that a single windfall of R50 000 can grow to almost R1,5 million in 30 years’ time (if it grows at 12% before fees). That is 30 times more than what you had invested.
It goes without saying that the earlier you invest, the better, even if the amounts are small. Just like in a business, small efforts can have a huge impact over time. Money needs the baking powder of time to rise to its full potential.
And talking about tax planning, the tax benefits of retirement products can blow you away. Government so to speak subsidises us to look after ourselves one day, and the more you earn, the fatter those “subsidies” become.
Can people be as creative in making savings plans as they can be in making business plans? How can you stash away something extra without even realising it, just because it’s become a habit? Say, for instance, like if you’re signing up for help with your administration through a platform like HustleNest?
One thing’s for sure, if you’re smart enough to run your own company, you’ll be smart enough to know that the Lotto cannot be a retirement plan.
The world is still getting its act together in drawing up ethical policies on how to treat gig workers and compensating them fairly and on time. It’s battling on how to implement transparent, structured payment schedules and maintain relationships with loyalty and retention strategies.
In the meantime, gig workers are pretty much on their own. They may benefit greatly by considering money mentors or even financial advisers to help them keep at least their personal finances on par as they start to climb the ladder of success.
