Freelancer Or Employer: Identifying Your Next Career Move

While the current economic recovery in the United States may be a little less robust than was first envisioned, it has at least been sustained during the first two financial quarters of 2013. This sluggish period of growth is a consequence of the Great Recession, as consumer confidence continues to fluctuate wildly and the U.S. employment market experiences its weakest recovery since World War II.

While the global economic recession may have triggered long-term stagnation, it has also impacted heavily on behavioral trends in the U.S. This is most noticeable in the changing nature of business start-ups and the entrepreneurs who operate in the U.S. A growing number of individuals have been forced to work independently out of necessity rather than a deep-rooted desire or long-term aspiration.

The Rise of the Freelancer: Does it Represent a Good Career Move for You?
This trend is reflected in the rising number of freelancers in the U.S., which reached an estimated 42 million during 2012. Including temporary workers and self-employed individuals, this demographic now accounts for approximately 33% of the U.S. employment market and is set to grow even further over the next decade. As recently as 2010, technology giant Intuit predicted that freelancers would make up 40% of the total workforce by the year 2020, and while this may have a positive impact on lowering the national unemployment rate, it raises other issues concerning long-term job security, pension plans and the average citizen's ability to save.

With these points in mind, you will need to give careful thought to your next career move as you consider the alternative benefits of freelancing and traditional employment. Keep the following factors in mind as you appraise each individual option:

Industry Growth and its Compatibility with Remote Working
The industry in which you work has a key influence in determining your preferred method of working, especially if you are to maximize your earning potential and achieve career advancement. A survey conducted by freelance giant Elance in September 2012 revealed that businesses across numerous industries are posting a record number of fractional and project-oriented jobs, with 42% of employers also confirming that they anticipate hiring more independent workers in 2013 than the previous year. While this reflects the widespread and diverse growth that defines the market, it is important to remember that the remote nature of freelancing remains more compatible with some sectors and job types than others.

Further evaluation of this report suggests that creative and technical jobs are the fastest growing in the freelance market, as the vast majority of work can be assigned and completed online. Individuals with IT, multimedia and software programming skills can therefore expect to find well-paid and continuous work while freelancing, while 2012 also saw a significant rise in the demand for mobile application developers and accountants. While the market is constantly evolving to include new sectors and job types, it is important to evaluate your own specific niche and skill set prior to forging a career as a freelancer.

Time Vs. Money and Your Earning Potential as a Freelancer
When it comes to evaluating the viability of freelancing, it is important to calculate your earning potential and the number of hours that you will need to work in order to achieve your financial goals. This conundrum of time versus money is crucial to determining the precise value that you place on your marketable skills, and whether or not making the transition from traditional employment would be worthwhile. To begin with, it is worth noting that the typical U.S. citizen worked a total of 1,776 hours during 2011, which means that the average working week consisted of just over 34 hours.

In contrast, U.S. freelancers worked an average of 39 hours each week during 2011, which represents a considerable difference over the course of a single year. Despite this trend being prominent across several continents, a global study of freelancers revealed that 48.7% earned less that they had anticipated despite their increased output. An even greater concern is the issue that freelancers have had with regards to acquiring payment for completed work, with 40% of the global talent pool claiming that they struggled to claim the wages that they were owed. It is important to keep this in mind, as you must consider which method of working affords you the best financial rewards for your effort.

Your Personal Circumstances and Long-Term Goals
Although freelancing continues to gain in popularity, it is important to remember that there are disadvantages associated with this method of working. The most prominent disadvantage is a lack of benefits, as freelancers cannot access employment contract staples such as statutory sick pay and healthcare coverage. When you consider that the primary motivation to work remains financial remuneration and the compensation that is offered in exchange for your services, the lack of a detailed contract means that freelancers are often at a significant disadvantage within the existing employment market.

Freelancers must also cope without a long-term pension plan, which can seriously impinge upon their ability to save and secure financial independence. Given that U.S. workers are already held in the grip of a pension crisis and facing the prospect of exhausting their funds just 14 years into retirement, those who operate as freelancers appear to be facing an even more uncertain future. While there are personal and retirement account options that can help you to save towards your future as an independent contractor, you must also factor in the lack of employer contributions and your specific retirement goals before establishing yourself as a freelancer.

The Bottom Line
By giving careful consideration to these factors and your long-term goals as an individual, it is possible to gain an insight into the reality of freelancing and whether it is viable for your specific circumstances. Although the increasing accessibility of independent contracting has undoubtedly created vital opportunities within a struggling job market, it is important to remember that this method of working also has considerable disadvantages in comparison with traditional employment. If you are considering going it alone as a freelancer, you must make a balanced decision and ensure that you are not swayed by popular opinion or sheer volume of freelancing growth statistics.

S&P 500 Snaps 4-Week Gain Amid Earnings, Stimulus Concern

The Standard & Poor's 500 Index (VIX) snapped a four-week advance as investors weighed corporate earnings amid speculation that the Federal Reserve may reduce its asset purchases this year.

Caterpillar Inc. fell 4.2 percent after quarterly profit missed estimates and it cut its annual earnings forecast. McDonald's Corp. tumbled 2.2 percent after saying economic weakness would hurt results for the rest of the year. Homebuilders dropped 8.8 percent as a group as PulteGroup (PHM) Inc. and D.R. Horton Inc. lost more than 12 percent. Facebook Inc. (FB) surged 31 percent as mobile advertising helped profit.

The S&P 500 dropped less than 0.1 percent to 1,691.65, its first weekly decline since June 21. The benchmark index reached a record on July 22 and climbed within 3 points of 1,700 for three straight days before retreating. The Dow Jones Industrial Average (INDU) added 15.09 points, or 0.1 percent, to 15,558.83.

"The market is trying to figure out where we have some safety and where we have top-line and bottom-line growth," Samuel Lieber, the Purchase, New York-based chief executive officer at Alpine Woods Capital Investors, said in a telephone interview. His firm oversees $4.8 billion. "The underlying trend is being questioned."

The Fed has said economic data will determine the timing and pace of any reduction in its $85 billion in monthly asset purchases. A gauge of manufacturing in the mid-Atlantic region unexpectedly fell, while orders for durable goods rose more than forecast in June and consumer confidence unexpectedly increased in July to the highest level in six years.

Bull Market

The S&P 500 (SPX) climbed 150 percent since March 2009 as the U.S. bull market has entered its fifth year, driven by better-than-estimated corporate earnings and three rounds of bond purchases by the U.S. central bank. The stock gauge is heading for a 5.3 percent advance this month, the most since October 2011. The gauge fell in June, after seven successive months of gains, as Chairman Ben S. Bernanke said on May 21 the Fed could reduce its bond purchases as early as September.

Equity valuations have climbed 16 percent this year, with the S&P 500 trading at 16.1 times reported operating earnings, close to the highest level since May 2010, data compiled by Bloomberg show.

The Chicago Board Options Exchange Volatility Index, or VIX, gained 1.4 percent to 12.72 during the week. The equity volatility gauge, which moves in the opposite direction as the S&P 500 about 80 percent of the time, is down 29 percent for the year.

More Clues

The coming week will offer more clues to the state of the economy. In addition to earnings reports will be data on U.S. gross domestic product and the monthly labor report, as well as monetary policy announcements by the Fed and the European Central Bank.

"The Fed is going to be meeting and there is speculation that maybe they will start to reduce their bond purchases in September," Peter Jankovskis, co-chief investment officer who helps manage $3.6 billion at Oakbrook Investments LLC, said via phone from Lisle, Illinois. "The reports that we have had and any statements they make are going to be the big lead-in to that story. The big driver really continues to be the employment statistics."

Exxon Mobil Corp. and Procter & Gamble Co. (PG) will be among 134 S&P 500 companies releasing results in the coming week. Of the 260 companies in the benchmark equity index that have posted quarterly results so far, 73 percent have exceeded analysts' estimates for profit and 57 percent have topped sales projections, data compiled by Bloomberg show.

Industrials lost 1 percent as a group for the week, the most among 10 industries in the S&P 500, followed by a 0.8 percent drop among energy producers.

Slower Demand

Caterpillar (CAT) slid 4.2 percent to $82.06 for the steepest loss in the Dow. Earnings for the world's largest maker of mining and construction machinery trailed analysts' estimates for a third straight quarter and cut its forecast as mining-equipment sales declined on slower commodity demand from emerging markets.

McDonald's fell 2.2 percent, the second-most in the Dow, to $98.03. The world's largest restaurant chain posted second-quarter profit and revenue that fell short of analysts' forecasts and said sales for the rest of 2013 would be hurt by economic weakness.

Expedia Inc. (EXPE) sank 27 percent to $47.20 for the biggest retreat in the S&P 500 as the online travel agency missed sales and profit estimates amid increased competition. Netflix Inc. slumped 6.9 percent to $246.31 on slower-than-estimated subscriber gains.

Homebuilders Tumble

An index of homebuilders fell 8.8 percent as PulteGroup and D.R. Horton reported lower-than-forecast orders, adding to concerns that higher mortgage rates will hamper the nation's housing recovery. PulteGroup plunged 16 percent to $16.36 for its biggest weekly decline in almost two years. D.R. Horton sank 12 percent to $19.33.

Health-care stocks and technology companies added at least 0.8 percent for the biggest gains of the week.

Facebook jumped 31 percent, its biggest weekly advance, to $34.01. The operator of the world's most popular social-networking service reported sales and profit that beat estimates. Chief Executive Officer Mark Zuckerberg's decision last year to bet big on mobile software is paying off, with sales of ads on wireless devices now on track to surpass revenue from desktop computers.

Apple Jumps

Apple Inc. (AAPL) rose 3.8 percent to $440.99. The world's most valuable technology company, which hasn't refreshed its iPhone and iPad since last year, managed to exceed analysts' earnings projections, even as profit declined from a year earlier and sales were largely flat.

Boston Scientific Corp. (BSX) soared 13 percent to $10.96. The second-biggest maker of heart-rhythm devices reported profit that beat analysts' estimates and raised its forecast amid signs that demand for defibrillators and stents is starting to stabilize.

Starbucks Corp. (SBUX) rose 6.6 percent to a record $73.36 after profits topped forecasts. Chief Executive Officer Howard Schultz's push into food is starting to pay off, driving traffic into U.S. stores and lifting sales and profit.

Are You on Track to Benefit From Higher Natural Gas Prices?

In this week's edition of The Motley Fool's energy-focused show Drilling for Value, energy analysts Joel South and Taylor Muckerman discuss several topics around natural gas with Motley Fool senior analyst Michael Olsen, CFA.

Who can benefit from a rise in natural gas prices? How about CSX (NYSE: CSX  ) ? Here is a company that has made coal transportation a big part of its business. At current levels, utilities are indifferent to coal or natural gas use, but if prices rise much higher, the coal-to-gas switching that permeated 2012 could begin to reverse. This would be to CSX and its investors' benefit. There are a few other reasons CSX might be hoping for a price increase, and our analysts cover them in the following video.

Natural gas has been affecting other industries for some time now. Why not let it have a positive affect on your portfolio, too? Forward-thinking energy players such as General Electric and Ford have already plowed sizable amounts of research capital into this little-known stock ... because they know it holds the key to the explosive profit power of the coming "no choice fuel revolution." Luckily, there's still time for you to get on board if you act quickly. All the details are inside an exclusive report from The Motley Fool. Click here for the full story!

 

New Second-Quarter MLP IPOs

The rush of master limited partnerships going public continues unabated through the second quarter of 2013. As the month of June draws to a close, let's look back at all that we have gained this quarter in the wonderful world of MLP IPOs.

April
Kicking off the second quarter right, KNOT Offshore Partners (NYSE: KNOP  ) debuted on April 10. The partnership owns and operates shuttle tankers under customer contracts that last five years or more. Knutsen NYK Offshore Tankers (KNOT) controls the 2% general partner stake and all the incentive distribution rights. Shuttle tankers move crude oil and condensate from offshore oil rigs to onshore terminals and refineries, so it makes sense that KNOT Offshore's customers include BG Group, Statoil, and Transpetro. 

May 
We had two MLP IPOs in May. First up was Emerge Energy Services (NYSE: EMES  ) , which hit the books on May 9, and is up 16% already. The partnership has a sand segment and a fuel processing and distribution segment, which engages primarily in the separation of transmix.

Tallgrass Energy Partners (NYSE: TEP  ) followed closely behind, going public on May 14. This midstream company picked up some of Kinder Morgan Energy Partners' western-based natural gas assets when KMP was forced to divest them to receive the Department of Justice's blessing on the El Paso acquisition.

June
June was a little light on MLP IPOs. In fact, there weren't any. Brookfield Renewable Energy Partners priced on June 11, but then postponed its offering on June 20.

What June did bring, however, was a few announcements about IPOs planned for later this year. Devon Energy (NYSE: DVN  ) announced it would pursue the IPO process for its midstream assets, while Enbridge Energy Partners (NYSE: EEP  ) announced it would spin off some of its assets to form Midcoast Energy Partners. Midcoast has some intriguing natural gas and natural gas liquids assets in Texas and Oklahoma.

World Point Terminals and OCI Partners also filed initial IPO paperwork. Not surprisingly, World Point Terminals is in the storage business, focused mainly on refined products and crude oil. OCI Partners is in the methanol and ammonia business, and is currently the largest merchant methanol producer in the U.S.

Bottom line
Keeping track of all of these IPOs is the first step, digging in to find the best opportunities for investment is the second. Don't let due diligence be swept away in the rising tide of MLP IPOs, they are not all created equal.

If you're on the lookout for high-yielding stocks, The Motley Fool has compiled a special free report outlining our nine top dependable dividend-paying stocks. It's called "Secure Your Future With 9 Rock-Solid Dividend Stocks." You can access your copy today at no cost! Just click here.