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Investing regularly when your income isn’t regular


Canada’s workforce continues to evolve with the rise of self-employed and contract workers driven by the on-demand, or “gig,” economy.

A recent survey about the rise of self-employment in Canada shows that full- and part-time freelancers, independent contractors and on-demand workers are expected to account for up to 45% of the workforce by 2020.

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Gig Stats1

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(47%) of self-employed Canadians pursued that work because they desire greater work-life flexibility.


of self-employed workers are doing so to supplement income.
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are financially better off since starting their self-employed work.

1The rise of the self-employed economy in Canada, 2017

Living with an irregular income stream means you may have to do things a little differently, like rely more on budgeting so you can get through times when your cash flow is low or unexpected expenses arise. It also means that setting up a consistent savings plan could be challenging. Here are a few tips that can help:

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Percentage over fixed

Set a percentage amount – rather than a fixed-dollar amount – to contribute from each of your paycheques. For example, 5% or 10% of your gross pay is a solid savings target to help reach your goals. Since the size and timing of paychecks can be irregular for self-employed workers, choosing to set a percentage of your income aside may work better for you. For example, instead of setting a contribution of $100 a month, you set 5% instead. This way, your contributions are proportionate to your income. Even though it’s not the same set amount every month, it’s still “regular” and regular investment plans are an effective way to build wealth over time. This mindset ensures that investing remains a priority throughout the year, not just at certain times – like the yearly RRSP contribution deadline.

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Watch out for 'windfalls'

Take advantage of "windfalls" like income tax returns or bonuses to top up your investment account.

It’s a good idea to think twice about how you spend any expected, or unexpected, ‘windfalls’ (like your tax refund). Resisting the temptation of splurging and that all-too-familiar mindset of “it was money that I wasn’t planning on having anyway” will ultimately work in your favour. That money could be invested and potentially grow to be worth more than its original value.


Look to the long term even if it's hard

Freelancers or contract workers may be more wary of fluctuations in their portfolio value. Because their income is less predictable, they might see their savings as something they need to access in the short term rather than a longer-term investment.

Adopting and sticking with a long-term perspective would be worthwhile, even during times when no checks are coming in. If you’ve been taking out a set percentage of each paycheck (whenever it might come) and investing it, the money you’ve set aside will continue to benefit from the power of compounding even between contracts when your contributions are low or even zero.

Bring these tips to an advisor to help determine what savings strategy is best for you.

This information has been provided by RBC Global Asset Management Inc. (RBC GAM) and is for informational purposes only. It is not intended to provide legal, accounting, tax, investment, financial or other advice and such information should not be relied upon for providing such advice. The information contained herein is from sources believed to be reliable, but accuracy cannot be guaranteed. Please consult your advisor and read the prospectus or Fund Facts document before investing. There may be commissions, trailing commissions, management fees and expenses associated with mutual fund investments. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. RBC Funds, BlueBay Funds and PH&N Funds are offered by RBC Global Asset Management Inc. and distributed through authorized dealers.

® / ™ Trademark(s) of Royal Bank of Canada. Used under licence. © RBC Global Asset Management Inc. 2017

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