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Continuing our previous  publication on “Macroeconomic Interpretation 101 for Wage Earners”, in this we focus on some specific financial recommendations according to macroeconomic information, for those independent non-salaried professionals. As in the previous case, your priority should not be to read this article if you do not have a clear and organized personal finances. Even if you are saving or investing if your finances are not organized, then in the best of cases, you are not being efficient with the management of resources, and that should be your priority.

Before starting our recommendations, we consider it prudent to make some suggestions according to the specific demands of independent professionals. As a freelancer you should know that the most important thing is to generate a regular passive income that exceeds the sum of your current expenses and liabilities, leaving a margin of safety for unforeseen events and annual inflation, which is not necessarily so important for salaried people. If you have not reached this point yet, you could be better off by being employed with an exit plan or you would be taking a high financial risk. Do not take the option of financing your fixed expenses with credits based on the high income you plan to receive in the future.

Having said the above, let us translate the following macroeconomic statement into actions: According to the appraisals published by Fitch, the rating of the sovereign debt [referring to the Dom. Rep.] Remains stable. What are the recommendations? In case you have the need to take out a loan and they offer you two rates: a low variable and another a few points higher, but fixed for “x” time; the recommendation is to take the lowest even if it is not fixed. In these times, lending rates have no chance of increasing, only going down. However, you should be very proactive in finding a better deposit rate for your investments in current assets, such as investment certificates. Get the best deposit rate you can get for your money, and if you need to get a higher rate, negotiate for as long as possible. Approach a local Stock Exchange and invest in public debt instruments, whether they are from the Central Bank or the Ministry of Finance. On the other hand, if your client is the State or people who work in the government, everything will be fine for you.

Second statement: The expected inflation for 2016 is 4% per year and the country projects inflation below this percentage in the first four months, while the CPI registers negative values ​​in the first four months of 2016. This implies that if you sell goods or offer your professional services, this is not the time to raise your margins or fees if you want to stay competitive; an increase of 4% is the cap. If you have to buy supplies or raw materials in the local market, keep your inventory to 30 days maximum, but if you can accumulate less it would be even better. If you want to increase your profitability, at this time focus your efforts on reducing expenses and operating costs, combined with the eternal effort to increase your sales. If your income increased by about 4% at the end of the year … make no mistake, you didn’t grow at all.

Finally and as we recommended before, keep your attention on the macroeconomic variables and get advice to know where you should focus your attention, financially speaking. You must be very clear that any variation in the macroeconomy will demand action in your daily life. Make macroeconomic financial reading a habit and discuss this information with your family. Learning to think about your finances wisely may be the best legacy you leave for your offspring.