Your Music Career Will Suffer if You Don’t Do This
Money. It's not something that we maybe talk about a whole lot aside from maybe what we got paid for a gig or something, but let's be real, this is a serious matter, and if you're not paying attention to what you're doing with your money, you will get caught with your pants around your ankles, if you know what I mean.
So let me tell you a story. So there I was, showing up to the Tin Roof Cantina on a Sunday night. All of you Atlanta folks remember back about 10 years ago or so, maybe more like 12 even, it was hopping, every Sunday night was crazy. And it still could be that way, but honestly, I've not been back in many, many years, so walking up to the venue with my guitar or my shoulder, I see a familiar face, which shall remain nameless. Upon seeing him there, I knew that he was kind of a fish out of water because usually I see him at other jam sessions, not particularly this one, so I walked over to him just to say hello... After exchanging pleasantries, I asked, Hey man, I haven't seen you at this jam session before. What brings you out? I'll never forget the response that I got from him that day, he said, Yeah, man, I'm low on gigs, don't really have a lot of money right now, and I need work. And I heard this was a place that you could get work, so I'm here... Who do I need to talk to? I just remember in that day thinking to myself, Wow, this guy is 50+ years old, I'm 20 something years old, and he's here today trying to find work, in my mind, I just always thought that people in your fifties, as a 20 year old who surely have their stuff together, right? But life's not always that way, life there's people curve balls all the time, and we have to be prepared and ready for it.
Right, so as he walked away, I realized, wow, I don't have my stuff together at all, and I cannot turn out like this guy right here now for all I know, like I said, he could have had a bad run a book and just... Things didn't really work out for him, and those things happen to people all the time, but to the people who plan and work really hard at planning their financial future, you would be surprised what they can endure, and from this day on, I got serious about money.
Okay, the first thing that you're gonna do is you're going to ask your friend network, whether it's your parents or friends and family that you deem somewhat responsible, just ask them if they know someone that has a financial planner.
Financial planners are really cool, they set up all of parameters for you to meet these goals, for saving and investing correctly, and the good news about it is their job to really guide you with good information so that you make wise choices if you don't have a lot of time or you feel like you're overwhelmed in the whole process, these people really help you figure it out. Now, some of these things that I'm gonna tell you, they're probably going to tell you, but in the event that you just feel uncomfortable talking to someone about it, you'll at least have some information.
Number Two, you're going to get a Roth IRA.
Yes, I know, it's a scary word. What the hell does it mean? A Roth IRA is an individual retirement account that allows tax fee growth and taxfree withdrawals. A basic rule about a Roth IRA is if you wait till after the age of 59 1/2 and you've at least had it in there for five years, so I'm assuming if you do it in your 20s or 30s, obviously you're going to qualify for that, you will not pay any federal taxes on that money. I can't stress this enough. Compound interest over time, means something... The market goes up, the market goes down. These are things that you just accept as an investor is what's really cool about a Roth IRA is you can choose how aggressive or how conservative you'd like to be with your money, so that if the market dips too much, it doesn't make you feel a little queasy about losing money that you've invested... But you have to think about this as a longterm thing. You're thinking about 59 years old. Chances are, if you're watching this and you're a young musician, you're probably in your 20s or your early 30s, that is so far away that if you just continue to put in money, you'll be surprised what you can achieve. So currently, the financial world allows you to contribute up to $6,000 a year for a Roth IRA. So you have to prioritize this in your budget, $6,000 in one chunk sounds like a lot, but if you divide it up over an entire year, it's not that much.
So forego the extra coffees at Starbucks or think about all the small gigs you play from time to time, for example, this is a great way to get your financial health up. Let's say you get a gig and it's $50, right, you get done with a gig, you don't buy a beer at the bar and slowly decrease that amount, but you take all that $50 home with you and you decide to put it into a high interest rare account, for example, that you can withdraw at any time, that will earn you on average, maybe 18 to 22% per year on your money, that $50 will add up very quick, if you continue to feed it, so take that $50 gig, right? Put into a high interest savings account at 22% or something and watch the money grow.
There's this really cool app called Acorn, have you heard of it? It's pretty awesome.
What it does is it actually rounds your transactions to zero, so let's say you buy something for $3.60 cents, what it'll do is it'll add 40 cents to your bill and that extra money that it rounds up, it invests, it's a really cool trendy way to save money these days, and a lot of people are doing it. So you should check it out. They also offer a lot of really cool perks to sign up, like free money and stuff like that, so check it out.
The next bit of advice is really simple, and it doesn't cost you anything.
One of my favorite apps that I use for finances is Mint, Mint is a really cool platform for linking all of your bank accounts together, so that you can see your overall financial health, you can set different budgets for different things, like I spend $200 a month at the grocery store, 'cause I'm a single guy, and I eat the same things every day. You can budget how much you want to spend out for the month and it will warn you when you're getting close, which is really cool because sometimes we're dumb and we make dumb decisions. What happened to me over longterm use of using Mint was really interesting, I started recognizing my spending habits right away, and I started making cuts, so my budget actually shrank over time because I realized how much money I was wasting.
Where is all the savings going to?
That's right, you've heard it probably a thousand times from a whole bunch of different people, you need to have $10,000 in the bank because let's face it, bleep happens like pandemics. And listen, I realize it might be a really hard time for you to implement these things right now, but I promise you, if you stay true to yourself and you follow some of these rules, you're gonna be in a far better financial state than where you were before. Something like this, pandemic came along, and so that's why I bring this up now of all times, financial health is so important. It factors into everything I do daily. If you're not serious about your financial career, your music career is going to suffer.