By Nathan Fikse
There are many considerations when taking a big step like leaving your job and your stable income to become a freelance lawyer. Are there sufficient funds in your emergency account to keep your household afloat during the transition? Does your significant other generate a consistent income? What about your retirement accounts? A lot of questions need to be answered, but where do you start? The first step in the process is sitting down with yourself or your family and creating a realistic budget. Understanding what money is needed for the essentials such as rent/mortgage, groceries, car payments (the needs), and what is set aside for running the business, miscellaneous items such as paper, folders, internet, etc.
How much do you need in your emergency fund? Many agree that 3-6 months worth of your expenses for renters and 6-12 months worth of expenses for homeowners is an acceptable range, depending on how conservative you are.
After the budget has been set, take a look at what you have set aside and set up a meeting with your trusted advisor. If you do not have an advisor, ask friends and colleagues for recommendations, and set up a meeting. Try to meet with at least three so that you can find the one that matches what you want in terms of advice and service, as well as resources to products that are applicable to your overall needs.
Areas to focus on now that you are on your own are: health insurance, disability income insurance, life insurance, and retirement. Does your significant other’s company provide health insurance, or would it be more cost effective to have your own coverage? Is your income significant enough that in the event of a prolonged injury or illness the loss of income would cause financial strain for the family if they were dependant on the two income streams? Are you going to have an office outside the home? Protecting your office space and overhead expenses to keep the practice running while you are not able to work is also important to give you some time to make a decision. Also, in the event of a premature death, you must ensure that the family is protected, allowing the surviving spouse to have the option of going back to work, or if children are involved to stay at home and raise the family.
If you have a 401(k) from a previous job, you may have questions about the types of rollovers available to you. Your advisor should be able to help you with the best decision to fit your situation.
The last part is your liability coverage. Again, your advisor can help you find the best policy to help protect not only your business practice, but also to keep your business and personal accounts separate.
In all aspects of your transition, consult with your tax advisor, so that every decision is based on sound judgment and advice. If you do not have a tax advisor, ask trusted friends and colleagues for recommendations.
Nate Fikse – Biography
Nathan Fikse obtained his BA in psychology from UCLA in 2003. Nathan is a former Football player both in the college and professional arenas. Nathan is a former All-American punter and place kicker at UCLA where he played for 4 years under Coach Bob Toledo. Nathan had the great opportunity to spend time in the NFL with the San Francisco 49ers and the New Orleans Saints.
Nathan went on to pursue a career in Asset Management where he gained the experience and also the skills in managing over 250 million dollars of property and other assets. Nathan performed the duties of project and operations manager and also director of development for the Los Angeles based firm.
Since then Nathan has joined the Northwestern Mutual Financial Network. As a Representative with the Northwestern Mutual Financial Network, Nathan works with clients to identify their financial security needs and then focuses on solutions that can help make their goals a reality. Nathan relies not only on his own knowledge and experience, but also calls on the expertise of a team of specialists available through the Network. Visit Nathan’s Web site at www.nmfn.com/natefikse for additional information.
Nathan Fikse
Financial Representative
1500 Quail St. #600
Newport Beach, CA 92660
(949) 863-5817