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Ask HN: Where to Invest Freelance Earnings?
6 points by nikokre 4 months ago | hide | past | favorite | 20 comments
I've just been paid by my first client (yay!).

My issue is, I'm still living on student grants and I'm not allowed to earn over a very small threshold, otherwise my student grants would be revoked (retroactive). Fortunately, only the net income (not revenue) is looked at once I hand in my taxes next year.

I'm self-employeed as a freelancer (in Germany) and can write off a lot of things as business expenses.

The legal details aside - just assume the general expenses can be written off – what would you recommend me to invest in, to establish my business, grow my personal brand and get more clients in the future?

You can get work equipment and if you have a separate room for work (look up the definition in Germany, it's no bed and has to have a door), you can get nice workstation setup.

Any domains you get, services you pay for are also deductible. You could hire people to improve your website or marketing, get good copywriting done and pay for those and write those off.

Great ideas, thanks! Especially getting marketing content is good, I believe

If Germany companies work like UK companies, you can setup a company, pay corp tax on your profits and leave the money in the company.

Then a in a year or two you can take the remaining money out using dividends.

Fundamentally, it's a tax inefficient way of doing things, but it's the company making the money, while you're only earning whatever smaller amount you pay yourself.

Bit late for this income, as you've already been paid.

The problem is when I reapply for the grant (every year), they will be looking at the value of my personal assets (where they will find the companies equity stake)

This seems very squirelly. How would they value the equity stake in a privately held company? Just by assets controlled in the company? What if those assets are illiquid and hard to value? If you use the 3K to invest in the business, shouldn't you be capitalizing those expenses? I truly have no idea how these grants work but might be worth talking to an accountant and/or lawyer about

Depending on your location you could setup a two level company structure.

Parent -> Child

You invoice from Child and pay yourself and any costs from Child.

At the end of every year Child pays Parent any profits.

Parent can then use profits to: Investment, Buy Property, Create another Child that might make money

Invest in yourself. Grow your personal brand and character/personality.

[DE]Glückwunsch zum ersten Kunden![/DE]


That sounds like a good plan, any specific items you can recommend? (education, etc.)

I am not an accountant.

What if you setup GmbH and accumulate wealth there with no limits? Then it can pay you a small salary for private expenses to match your student grant limit. I think the grant should not limit you to be company owner/shareholder, unless you earn dividends.

I wouldn't be able to renew the grant because it limits personal assets to 7.500€ (Bafög), which would be exceeded by having the equity stake in the company.

A GmbH needs a capital of 25.000€. An UG might be a better option.

Subscriptions to an SAAS ? Are there any premium tools out there you could use? Some extra disk space? Premium hardware?

Maybe something marketing related, although I have no idea where to start. What did you start with?

Credits for Facebook marketing campaigns…?

Online education, networking events, business cards.

You would need to check rules on education spending as it's not always allowed as an expense

How much money are you trying to burn?

roundabout 3k

If you have the time and are wiling to put in some effort, I would write a book in the domain you are doing your freelancing in and self publish it(you could even try ghost writers if you want to burn the $$$ and save yourself some time) Then spend the rest of the money on marketing the book. This could bring in some income and also act as a promotional tool for you. 3k isn't a huge amount of money to do this though.

Give it to charity

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