Remember high school? Were you a person who wore what everyone else wore or did you stand apart?
I’ll bet you didn’t follow the crowd. That’s rarely the artist’s way.
Why do I bring this up? I only mention it because it turns out that creative people – those who are willing to go against the grain – should be great investors. Consider this: a financial company (Blackrock) sent out an email recently discussing the fact that many investors chase “negative returns.” Apparently, people try to guess where the market is headed; and Blackrock detailed just how horrible people are at guessing. In fact, it appears, when most people decide to turn right, the best decision was to turn left.
There’s Value in Turning Left
Everyone’s heard the mantra “buy low/sell high.” This even applies to your art, doesn’t it? Often I meet struggling artists who wonder “How come I’m not a sensation yet?” then they proceed to take the same steps as the herd.
It didn’t work in high school and it isn’t going to work now.
To truly get ahead, in your art and with your money, you need to turn left when everyone turns right.
The things “the herd” respects…a strict calendar and adherence to a to-do list, completely kills our creative function. To be creative, we need to play. Everyone else buckles down on the to-do list. The creative person throws it away.
I’m not saying you should be irresponsible. On the contrary. I’m saying that in some cases the most responsible advice I can give you is to turn off your “I should do this because everyone else is doing it” function. By looking down different roads, exploring new opportunities, you’re not necessarily wasting time. You’re creating magic.
“All who wander are not lost” – JRR Tolkien
The big ah-ha in this “negative returns” story for me today is that as a creative person, you stand a better chance of being a good investor and saver than the average person because you’ve already decided to change your life. We’ve already made the lifestyle decisions that allow us to play a little more and explore a wider boundary. We can teach this to others who don’t clearly understand how important this is in life.
How Can Being Creative Help Me Invest?
If your neighbor says, “I’m thinking about buying XXXX art, what do you think?” and they aren’t familiar with the art community, you may already know that the work they’re describing is overvalued. Think the same way with your investment decisions. If your neighbor tells you to buy gold because everyone’s doing it, there’s probably limited upside.
Here are some things creatives should know better than the “mass market” audience:
1) It isn’t about today. If you wanted to make money right now, you would have become an accountant. Investors are patient with their money and don’t move quickly.
2) Ignore the popular press. Magazines will always tout the 10 Stocks You Need Now. Creative people don’t really care what we “need now.”
3) Everyone’s buying it! There is no gold rush in investing and there isn’t a quick buck to be made. The best approach is to get rich slowly through following the basics, like building an emergency reserve and diversifying your portfolio.
4) Sometimes you have to be creative to find success. One client of mine really wanted to retire in northern California but couldn’t afford it. She found partners to help her open a bed and breakfast with wonderful views. Sure, she has to work every day, but the sunset over a beautiful wooded lake make her job much easier.
5) You have to have vision to succeed. Many creative people I know enjoy imagining the “maybe” scenarios. By exploring all the paths available instead of focusing on just one, you’re able to reach solutions where others see only brick walls.
Too often, I find my creative clients are afraid of investing. Don’t be! Maybe you think “I won’t know what to do with my money!” It turns out, according to Blackrock, that the best moves with your money are generally found by ignoring the herd. Isn’t that refreshing?
You may know the feeling: You’re at the bookstore and spy a wonderful new reference book that’ll help with your art….or you’re at the clothing store to pick out an outfit for an audition, and the perfect fit is just outside of your price range.
What’s a little credit card debt, right? You’ll be able to pay it off later. Hopefully.
Whether you took on debt by overspending on your craft, or your job doesn’t pay enough, debt is a weight that’s hard to relieve. That said, getting rid of debt is the first step when creating the Abundance Bound mentality. According to financial site NerdWallet, the average household in the U.S. carries $15,422 in debt. Ouch. More meaningful is the fact that once people have debt, they’re likely to use credit more and more often. The flip side? 53.3% of the American population carries no debt at all.
We can’t solve the American debt problem, but we certainly can help add you to the 53% without debt, can’t we? How should you pay it down?
Much has been made in the financial press lately about how you should attack your debt. Researchers recently concluded that often what people think of as the smartest option hasn’t been the most effective way to pay down debt. Let’s look at two popular methods and review why you might want to choose the sub-optimal method to pay down your debt.
The Mathematically Sound Method To Pay Debt
If you want to take the fastest path to debt relief, and can stay on it, here’s the obvious solution: (more…)
Remember setting up domino chains when you were a kid?:
I think artistic people understand more than others what these falling dominoes can represent. One positive result leads to another: an artist is shown in a gallery in Los Angeles, and a dealer in New York sees the show. That leads to a second show in Manhattan. An actor scores a part in a play that’s attended by a big producer. The actor’s next role is a small part in a motion picture.
I attached this video because even when all doesn’t go exactly according to plan (they had to roll the marble twice AND there was a break in the chain at one point), there are still positive results!
We tend to forget that one good result has a tendency to create another.
It’s the same with our financial situations, isn’t it? Successful people are far down the domino chain: (more…)
For most creatives, we’re comfortable working without a net. Many of us have gone months or maybe even years without a stable income. Some are amazingly agile at finding just the right resource at the perfect time. Like a trapeze artist on the high wire, we find a way to make it work.
That’s why the concept of insurance is so foreign to most of us. When you’re a high wire artist, your first thought probably is, “Why waste the money?”
Unfortunately, just because you’re comfortable on the high-financial-wire, those around you may not be. Today’s column is too short to go over ALL of the things you need to know about insurance, but we can cover the basics that most people should know:
Car Insurance: You must have it if you’re driving. If rates are a problem, look online. Many times companies such as Amica, Geico or Progressive will beat traditional insurance firms while keeping the quality of your coverage high.
Tip: Ask for a full list of available discounts. You may qualify for multi-policy, association and safe driver discounts, among others. A friend’s child has good grades in school, so Progressive awarded him a discount when he began driving. (more…)
I realize I talk a lot in Abundance Bound workshops and this blog about avoiding “too good to be true”.
But there’s a good chance that you’ll be able to easily implement THE SAME strategy I used to pocket more money NOW.
How did I do it? Easy. I paid attention to taxes.
TAXES? UGHHH.
How can five little letters (t.a.x.e.s.) put people to sleep so easily? It’s the same for me. I can’t stand tax discussions. However, I love talking about how to get more money in our pockets. (more…)
What is it about September? People walk a little more quickly. Long evenings under the stars with friends become nights at home in front of the computer. Kids go back to school. Client work picks up. Projects roll. The world shifts into gear again.
This is a time for productivity. It’s a time to set up a successful move for your art. If you’re going to celebrate a great 2012, this is the time to clean up your financial picture so you can focus on your craft, your clients, and your career.
1) Write out your goals. In the book The E-Myth, author Michael Gerber points out that most small businesses fail because they don’t have set workflow practices. Don’t just jot down some 1,000 foot goals, get your hands dirty!
- What are you going to do each day to reach your goal?
- What milestones along the way will you set to stay on track?
- How much is each goal going to cost?
2) Set up your budget and direct deposit schemes. By automating your financial picture you’ll be able to focus on your art instead of on a stack of energy-draining “to do’s.” If you have a side-hustle job to pay the bills, direct deposit this money into a savings account, then set up an automatic transfer of enough to live into your checking. Use online tools such as Mint or Yodlee to plan your budget parameters. Once you’ve written out your expenses, you’ll be much more comfortable in your financial shoes. (more…)
A talking head on television the other day said, “It takes deep creativity to find quality investment opportunities.”
Is this true?
If investing is about creativity, how come so many members of our community cover their ears the second an investing discussion begins? Why aren’t we the best investors of all?
In fact, when I think of investing, I don’t think about artists. I think about button down suits and Wall Street types. Maybe we’ve been wrong all along.
I think the talking head is right. We should be the world’s best investors. Legendary mutual fund manager Sir John Templeton built a reputation on always looking left automatically if the crowd was gazing to the right. That sounds like our community, doesn’t it? We see the unexpected, feel what others miss, and bring life to what others pass over as the mundane pieces of the world.
Imagine how rich we’d be if we applied our natural abilities to good financial management!
We can apply our abilities to financial planning. We can be great investors. All it requires is for us to overlay the areas where we already excel onto a new palate of good financial habits. (more…)
It’s time for the big reveal: I’m not a fan of spring cleaning.
Once I’ve finally dug in and begun the process, I enjoy organizing shelf space and rearranging household supplies so they’re easier to find. When it’s over, I’m always glad it’s done, and I love that when I want something, it’s right at my fingertips. Yet, if you asked me what my least favorite five tasks around the house would be, cleaning closets and organizing the garage would be near the top.
I mention this because the other day someone mentioned that for her, financial organization is like a trip to the dentist. She dreads the process and can’t wait for it to be over. My friend said that she’d much rather focus on her craft than organize her money. She loves the tools that I’ve made available and the coaching that she receives, but in the end she cried, “Miata, why can’t someone just do it for me?”
Ouch.
Let’s be clear. Most of my audience isn’t in love with the financial planning process. They don’t relish budgeting. I can’t recall any stories about my students jumping out of bed in the morning, clapping hands and screaming, “It’s time to review my car insurance!” Shockingly, it doesn’t happen. So why do people subject themselves to this process? Why do they endure the pain of learning how to streamline their financial lives? Wise savers know that the same truth about organizing closets applies to their financial picture. Once it’s clean, everything goes more smoothly. Items don’t get lost. Money decisions quicken. Accounts are easier to follow.
A solid financial plan frees up more time for your craft
Abundance Bound: Removing Ramen from the menu, one hungry grad student at a time.
Whether you’ve worked through the money plan we discussed two weeks ago, or you’ve jumped into this blog for the first time and are curious, let’s work through how to live a daily money plan. I have to admit, creating the plan was the most difficult part. Once you’ve written out your income and expenses and searched for opportunities to save money and raise income, it’s now time to live the plan. How do you live daily on a money plan?
Here’s what you’re not going to do: you aren’t going to write down every single expense for three months. I can’t find a semi-normal human being who can endure that gauntlet. Don’t get me wrong….I know people who can live this way, but you and I wouldn’t have them as friends. You also aren’t going to learn to live on fourteen cents and eat only Ramen noodles (unless you like Ramen noodles, in which case you can eat as much as you’d like because they’re incredibly economical).
My goal isn’t to help you find your noodle diet, and it isn’t to make sure the bills are paid.
For those of you in the LA area, I wanted to invite you to a profound and powerful play I’m directing and performing in by Toni Press-Coffman called TOUCH. It’s an extraordinary piece, and I’m proud to be a part of it.
Visit www.digtheater.org for tickets and more details!
It runs for two nights only in Santa Monica: Friday, February 12th and Sunday, February 14th. We’re intentionally producing it across the Valentine’s weekend as a celebration of love, loss, hope and the eternal spirit. It’s also an inexpensive alternative to the overpriced fanfare ($9 beers or dinners that cost $60 a plate rather than the typical $16).
Tickets are $15 only and each performance will be followed by a gala reception. So we’re expecting the production to sell out quickly.(more…)
It’s time for the big reveal: I’m not a fan of spring cleaning.
