In the 1986 classic movie Wall Street, Bud Fox (played by Charlie Sheen) is a young up-and-coming stockbroker who’s trying to make his mark in the world of finance. As he’s adjusting his tie before a big meeting with the titan Gordon Gekko, he says, “Life is made up of a few big moments. This is one of them.”
Well believe it or not, if you expect to receive a tax refund check, you’re coming up on one of your “big moments.”
Every year, many people blow this chance to get ahead. They spend their refund on a big, frivolous purchase or take a vacation. While these might feel like fine short term uses of a refund check, there are several that could change your life, remove your debt, or help you build your business or security.
Here are my five favorite uses for a refund check:
1) Wallop some debt. Here’s your big opportunity to focus on your art more. If you’re drowning in debt, you may find that your attention is focused more on side-jobs and instant income opportunities than the big picture. Clear your mind by getting rid of some debt payments.
For best results, tackle smaller debts first. Wiping these payments out creates breathing room for your budget. If possible, use the money you save on these payments to tackle bigger debts next. Soon you’ll be on your way to being “debt-free” and focused on your income opportunities instead of the mountain of bills on the counter. (more…)
I was recently drawn to a new book by Austin Kleon called Steal Like an Artist. As an artist, who also works with many artists, I thought it was an important book to read…especially since I don’t feel like I (or any of my clients, for that matter) are thieves.
Kleon says that in order to maximize creativity, you must realize that everything has already been done before. Creativity is seldom about finding a new subject; it’s more about placing your own spin on existing work. I think this is true. Shakespeare’s plays are all stories that had already been told. He told them better. Monet wasn’t the first person to paint people, landscapes, or buildings. He just improved on the existing process.
What does this have to do with money?
So many people want to be great at money, but they don’t realize that to be good at something (ANYTHING), you should emulate the best work of the masters in that field. Only then will you begin to practice good money management techniques.
Artists often tell me that financial books are boring. My friends in the financial industry tell me that much in the art community puts them to sleep, too! The person who achieves greatness is the one who can dive into an area and keep practicing until they become great. The funny thing about becoming great? Those areas that used to be boring are suddenly some of the most exciting parts of the task, once you understand the nuances of the trade.
If you’re a painter, what would you say to a person who stated, “Painting like Jackson Pollack is simple!”? How does it feel if you’re an actor and someone remarks how easy it is to just pretend all day? You know the truth, don’t you? It takes years of practice.
4 Year End Financial Moves To End 2012 With a Bang!
I can’t believe it’s almost that time of year again! We’re saying goodbye to 2012….and it seems like we just said goodbye to 2011. This can be a crazy time for creatives. We’re busy building, sculpting, performing. But don’t forget that the end of the year is also a time to close the books on your financial life so you can begin 2013 fresh. Here are some of my favorite year end moves:
Paperwork & Technology Moves
This is a great time to shred unnecessary papers from the year and delete unnecessary emails. Set up your systems to ensure you roll easily into 2013.
- If you haven’t yet, create a series of email folders to funnel important financial documents. I also like the free financial tool Dropbox to store important papers in “the cloud” so they’re available from any computer.
- Adjust your budget. Automate budget tracking if you have a smart phone or computer using programs such as Mint. Last week I went over my grocery budget and before I’d unloaded the groceries into my car, Mint had already emailed me a warning.
- Create times to plan. Take out your 2013 calendar (or purchase one!) and lay out non-negotiable times to review your overall financial picture. You might want a quick once-a-week to review your budget, pay bills and review any new investment correspondence. More important is a twice-yearly “where am I” session. (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…)
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…)
A friend recently said, “I don’t know how you keep all of this straight…what the Dow Jones is doing, what’s a good rate on a credit card, how a will works, the right type of life insurance. Ouch! It makes my head hurt.”
You may feel the same way about your financial picture. Between your craft, family, friends and obligations, it seems like a huge hassle to remember everything you need to know.
But there’s good news: it’s not that difficult.
I imagine you might be thinking, “Ha! Easy for you to say. You do this every day.”
I understand that it’s a whole new world for many of our readers, but I’m serious: it’s not that difficult.
Sure, you might not understand every point about finalizing a mortgage or how to tell a good mutual fund from a bad one, but like any task, if you organize it correctly, it’s easy to see what you really need to know now and what can wait for later. (more…)
This time of year I like to look back over the last twelve months and reflect. For me, life is about making mistakes–mentors have told me that if you don’t make any mistakes, you aren’t moving fast enough. This year has been a whirlwind, so I must have made some real doozies!
While it certainly can be difficult, I try not to dwell on my missteps as long as I learn from them. At this time of year, I also like to learn from events and the mistakes of others. There are five that I think are well worth reflecting on before we march into 2012:
1) Don’t Wait on Government…In Fact, Don’t Wait.
Politics seemed to enter our life more than ever this year, with Republicans and Democrats waiting to the last minute before passing legislation in several key areas, including funding to keep the government open!
I’ve met people who’ve said that they can’t do any long-range planning because they’re unsure what measures the government is about to pass, or they aren’t sure if the tax structure is going to change, or they want to wait and see who the next president is.
Most artisans work on a 1099 income basis, so some important areas such as health care and small business taxes can have a big impact on your bottom line.
….but does this mean you should wait?
Waiting on the government doesn’t make any sense to me. Is it better to have a plan in place that you may need to adjust or to have no plan at all? I’d always prefer to revisit my plan when the government finally decides their actions, than be held hostage to whatever political problems crop up.
The Bottom line: Plan now and adjust as events occur. (more…)
Lately, a bunch my friends have been talking about buying gold. With the problems in Greece and Italy, should I be buying precious metals, too? Thanks!
Chris
Not necessarily Chris. All you have to do is watch late night television to know how sky-high metal prices are right now. When commercials tell you they’ll buy your gold, recommend that you buy real estate, or announce that the Snuggie is the next wonder of the world, buyer beware. (Although they may be right about the Snuggie…) Rule #1 of high school economics is to “buy low and sell high.” I’m always nervous when the price of any investment is through the roof.
That doesn’t mean that I think the price of gold is going to come down. It only means that I’d be cautious. Here are some things to think about:
If you’re a beginner, make sure you have a cash reserve in place before purchasing any investment that will fluctuate. If you run into an emergency, you need a safety net. According to CNN’s Walter Updegrave, gold prices are three times more volatile than stocks, so don’t listen to people who talk about gold as a “safe haven” unless they ride roller coasters to cure insomnia.
Only purchase a small amount. Many financial experts recommend only having 10 percent of your entire investment portfolio in precious metals. Start with mutual funds or exchange traded funds that buy stocks and bonds. Then move into more aggressive investments like gold.
Don’t try to time the market. I know prices are high, but could they go higher? Sure. They could also plummet tomorrow. If you’re buying gold as a long term investment using the parameters I’ve outlined above, great. If you think gold prices are headed “to the moon”, you’re just gambling.
Contribute to your 401k even if you don’t plan on staying with the company long enough to claim the matching dollars.
A 401k plan allows an investor to place money into investments on a pre-tax basis. Let me explain what that means: when you collect cash from an employer, they’ve already taken out federal tax, state tax, FICA tax, and in some cases, city taxes. Yuck. When you invest in a 401k, your money avoids ALL of these taxes until you take it out. That means you’ll have more money invested than if you tried to save these funds in the bank. Even when you take money out, it’s distributed as ordinary income, circumventing FICA taxes. The 401k is a powerful tool you should be using right now! When you leave your company, you can often leave it alone or roll it to an IRA until retirement.
In the 1986 classic movie Wall Street, Bud Fox (played by Charlie Sheen) is a young up-and-coming stockbroker who’s trying to make his mark in the world of finance. As he’s adjusting his tie before a big meeting with the titan Gordon Gekko, he says, “Life is made up of a few big moments. This is one of them.”
This time of year I like to look back over the last twelve months and reflect. For me, life is about making mistakes–mentors have told me that if you don’t make any mistakes, you aren’t moving fast enough. This year has been a whirlwind, so I must have made some real doozies!
Hi Miata,
Contribute to your 401k even if you don’t plan on staying with the company long enough to claim the matching dollars.