Second quarter didn’t break any records or get us off to a huge start but we did see many good indicators throughout the market … until this past month.
Brexit first of all looked like it was never going to actually happen, for many reasons. But then it did. Subsequently, the markets took a tumble on that Friday and Monday as we all came back to work. But as we closed out the quarter the S&P 500 had recovered to 2102, just 8 points shy of the 2113 pre-Brexit on June 23rd.
So why is this? Nightly news, your CNN Apple Watch notifications and just about everybody else made this seem like the end of the world. In contrast, this was quite a muted response to something expected to be so catastrophic.
Let’s look for some bright signs or silver linings that might explain this:
- Frankfurt and Paris are jumping for joy. London’s “City” (their financial hub) has traditionally been the European finance hub for decades. However with the cut from the EU these two euro cities are attempting to position themselves to become the new EU financial hubs. This can actually be a great thing for the continental EU. While the UK and Germany have been the #2 and #1 economic producers in the union much of the rest of Europe is still struggling from their previous economic crisis and could use some transfer of human capital to help improve their economies. Many EU countries still have 10% + unemployment and the shift of 1000s of jobs to the continent can actually be a good thing for continued improvement.
- Does the UK pose an issue similar to what we saw in Greece? No … quite simply it does not at all. The organization of the UK (already quasi-separate, on their own currency, etc) makes some stark differences. Furthermore, the UK gilts which were trading at 105 have seem a jump to 110, a 20% return which is really quite phenomenal given the “horror that would be the Brexit.” So rather than seeing risk premium applied to these debt instruments we’re experiencing a bull market in this area giving further confidence to the fact that the Brexit was only uncomfortable for a few days, has since recovered, and the market chugs along as it always has.
In summary - the S&P 500 actually had the strongest weekly rebound that its had all year. So for market timers or people who jumped ship at the first sign of rough seas, they would have locked in losses and been forced to buy back securities at the higher price point today. If your time horizon is long (or even medium for that matter) the best course of action continues to be stick with asset allocation, expect volatility within reason, and if you had cash on the side during those down days that would have been an opportunity to buy up securities at a discount. There are also opportunities for rebalancing and our advisory platform will be making recommendations for small changes as they see fit.
Let’s keep strong, stay on target and continue to methodically build wealth together.
Data and rates used were indicative of market conditions as of the date shown. Opinions, estimates, forecasts, and statements of financial market trends are based on current market conditions and are subject to change without notice. References to specific securities, asset classes and financial markets are for illustrative purposes only and do not constitute a solicitation, offer, or recommendation to purchase or sell a security. S&P 500 Index is a market index generally considered representative of the stock market as a whole. The index focuses on the large-cap segment of the U.S. equities market. Indices are unmanaged and one cannot invest directly in an index. Past performance is not a guarantee of future results. 2016-25639 Exp 9/16
“Damn the man! Save the Empire” has been a battle cry for me since I first saw Empire Records when I was 15. I remember my first viewing– my love for Lucas, admiration of Joe, confusion at Liv Tyler’s underwear choice to seduce Rex Manning, and new life goal to one day work at a music store with my best friends and have a concert on the roof to raise money in order to defeat corporate greed. Y’know, the basics.
Well, record stores barely exist anymore and the guys who work at the few remaining are aging stoners who probably have shrines built to Kurt Cobain. No family, no retirement plan, no liver – no future. I have been left with a void and a question of how to fill it.
Empire Records was a call for rebellion. The plot of the movie is completely anti corporate America, a record store struggling to remain independent with the villain of the piece being the only guy in a suit. Yeah, yeah it was the grunge generation but it was also a preview of things to come. As a whole, those of us who sit snugly between Gen X and the Millennials, are torn in two. We were influenced by our baby boomer parents to work hard and trust the financial markets yet just as we were gracing the age of financial responsibility the system failed us in 2001. And then just as we were getting comfortable in our adult lives, 2008 pulled the rug out again. So now we wander through life wanting inspiration from our careers yet tethered to traditional life and a desire for the financial success we require. We are all Warren (I know – his name isn’t Warren). Looking in from the outside to the eclectic group who work at the modern versions of Empire Records; Google and Warby Parker among them. Wanting to find work that satiates the soul but having learned from the past that financially stable is a requirement of employment. How can we achieve that balance of fun and productivity? When is Rex Manning Day??
I often wonder if I am “the man” or “the Empire.” I work in finance. But I don’t wear a suit. I listen to music all day at work. But my work involves budgets and bottom lines. I wonder if, like Mitchell, I would opt to sell to Music Town. Most days I’m sure I wouldn’t.
PROTECT THAT SHIT!! That’s right. Just like you learned in sex ed. Wrap it up. Protection first. I could keep going like that but then this would be a very different post. Here’s what I mean: Having stuff (money, things, income, couches, health, pets…) is awesome. I am a staunch materialist. But having stuff that could end up bankrupting you or that can vanish isn’t really having it.
Let’s take the example of renters insurance. My roommate and I love to have drunken brunches. Minnie Driver called one of them – it was an epic 12 hour brunch, the full details of which will never be shared. Anyway we love brunch. And we have dancer friends. And our dancer friends love brunch and booze but not so much food. So, good for them, they get super drunk. (No judgement.) Now what if one of them tripped over my pug, broke their own leg and in the process knocked over a candle starting a fire that not only destroyed all my stuff but my neighbors too?
No seriously. What would happen?
What would you do if you were my neighbor?
Yeah, I’d have my ass sued 7 ways till Sunday! (is that the right expression?) So let’s break it down. My dancer friend can sue me for medical bills and lost income. My neighbor will sue me for the loss of all their stuff plus anything else they can get. And I’m going to need to replace all my stuff. (Stuff clearly being the technical term.) I know this sounds outlandish but each piece of this individually could bankrupt you. Renters insurance for a one bedroom apartment in NYC that doesn’t have a lot of expensive property in it (ie. You don’t collect Faberge eggs) will run in the ball park of $20 a month. Worth it?
Health insurance. Get it.
Disability Income Insurance. Awesome. Long Term Care Insurance. Get it while you can.
Life Insurance. Absolutely. As much as you can, as young as you can. No, you don’t need it but trust me, implemented the right way, you’re gonna love it.
Legal documents. I’m not a lawyer. My brother is. My cousin is. My uncle is. My grandfather was. (I’m Jewish) Here is what I do know. There is no time in your life when having the following legal documents would be a bad idea. Living Will, Power of Attorney, Will. Most people don’t get any of the above unless they get a will. I actually think that when you get a government ID or drivers license you should be required to get the living will and power of attorney.
Let’s say for example, I didn’t have those two documents. I, for some reason (a hot guy), am distracted while crossing the street. I get hit by a car and am in a coma. Who can make decisions for me? Do I want to be kept on life support? Do I want to be revived? Without those papers, no one knows. And for me there are a lot of people who may have an opinion.
Sisters in Law (2)
Business Partners (2)
That’s 10 people who all have a vested interest and could be the person I entrust with this responsibility. But who has authority? Only the person listed. If you have no legal documents, this becomes a shit show. And it can make a really tough situation even tougher.
I know, I know some people just “hate insurance” but here’s the deal. You have insurance whether you purchased it from a company or not. Insurance is basically just saying this is who has the risk. Ifyou don’t lay the risk off on a company, you are essentially choosing to self insure. Which means if there is an incident, you are on the line for the whole shebang. If you own an insurance policy with a company you have laid that risk off onto someone else. And insurance isn’t as evil as everyone thinks. Check out this little story about the evolution of insurance companies. (My version but based on fact – look it up.)
Once upon a time, a long time ago, there was no insurance. So when bad stuff happened to someone in your village, the village busybody would come around a take a collection to help the family in need. After years and years of this, people got tired of being called upon for money and thought “isn’t there a way to plan ahead for this??” And they came up with the following: we know bad stuff is going to go down, so what if everyone puts in a little bit of money every month into the pot. This way when something does happen the family who is in need can draw the appropriate amount from that and we don’t all have to be on the hook. Yay team!!!
And that boys and girls, is my version of how insurance happened. Isn’t it kinda heart warming?
Living in New York City it seems like the dream for most is to own real estate. Free from rent hikes, able to redo your bathroom or kitchen, paint your bedroom without the concern you may have to just paint it back to white in 12-24 months, hang things on the wall without considering your security deposit and the overall pride of owning something that grown up! Recently, I have had clients surprise me with purchases of both either before consulting me or flat out against my recommendation. Which made me thing, what is it about the allure of home ownership that causes one to just go for it? Well, it could be for all the right reasons. The mortgage and maintenance payments are less than your rent. You want to build equity. The area is becoming gentrified property prices should go increase over time. Or it may be a kneejerk reaction to reaching a certain point in your life.
But the truth is, purchasing a house at its best, is a financial decision, not an emotional one. And there is much to consider. After the down payment, closing costs and moving expenses will your emergency saving be depleted? Will you be forced into credit card debt for additional expenses? Also, once the money is in the house in the form of mortgage payments and equity, there is no longer the guarantee that you can get to it. Home equity loans and house sales are no longer the sure thing they were pre-2008.
If your mind is set on buying a home it’s important to remember that some money on your balance sheet is available to you for that, and some isn’t. For example, the people who have been maxing out their 401k contributions for 10 years and now have 90% of their savings sitting in there. That money is not liquid. You cannot use it for a down payment. Best to keep to the boring way, save money in your savings account. Even in a taxable investment account values could go down causing you to have to sell investments at a loss for the down payment. And listen to your financial adviser, that’s what they are there for.
Arggh, Compound interest.
Everyone throws this phrase around and we need to get some clarification around it. I mean even Kimmy Schmidt claimed to get it and she was spot on with her math but way off with the logic of applying to real world scenarios. (If you have no idea who Kimmy is check it out on Netflix show) Let’s take her exact example. So Jane Krakowski’s character Jaqueline thinks that she can’t afford to divorce her husband because due to a prenup she will only get $1,000,000 for each year of marriage, totaling $12,000,000. Kimmy sets out to prove that this is, indeed enough money for Jaqueline to maintain her $1,200,000 a year lifestyle. Jaqueline starts the conversation by saying it would only last her 10 years.
12,000,000 / 1,200,000 = 10. That’s how she got her answer.
OK so if finance were that easy, you would be rich. So rest assured, it’s not. And you still can be rich.
Then Kimmy complicates everything by saying something like “I love beanie baby’s and you forgot about compound interest.” She makes a grand proclamation that Jaqueline can get 7% rate of return every year for the rest of her life. If she did, she would have $5,865,000 at the end of 10 years and could probably struggle through.
But that’s not the whole story. All of of this money is growing with tax implications. Which means that the government is taking part of that cash money. Here is what the numbers look like once we take into account a 20% capital gains tax rate. (That means that all investments stayed invested for over a year.)
Now, for those of you who can deal with numbers, take a look at it with taxes:
Can you spot the difference?? Yeah the $1,173,099 in the red category called “Annual Income Tax.” To put in normal language that means that this chick would have to come up with almost $1.2 million dollars extra to pay taxes while she spends her $12,000,000 down. If she took it out of the account we are looking at, that means instead of the sweet $5.8 million she has pre-taxes, she would only have $4.6 million. Not chump change, I realize, but a big deal if you live on $1,200,000 a year! That’s the impact of taxes on your beautiful compound interest.
But wait, there is more.
Kimmy, who, let’s face it lived in a bunker for a decade, suggests that Jaqueline could get 7% in the stock market. Let’s test her theory by taking a look at the history of the stock market. (Remember this picture?)
So, not guaranteed to get your 7% there. I mean you could it you’re lucky, but certainly not every year for 10 years in a row.
So if not the stock market, may be she could get it in the bond market!
Yeah, no again.
Not sure where she came up with 7% unless that’s a real nerdy 90’s reference cause that’s what people thought they could always get back then. Then in went down to 5% and now the Wall Street Journal claims the only sustainable number is 2%.
So conclusion? Mine is that Kimmy essentially did some old school needs based planning nonsense. Let’s take this out to it’s inevitable conclusion. Is Jaqueline going to keep the same clothing forever? Will she stay in the same house? Will she keep the same phone? The same face? Or will she keep up with the Kardashians and have an ever expanding lifestyle that costs her more each year because that’s what’s most important? Yeah, I think so to! So here is what her money would look like if we assumed that each year her life cost her 3% more then it did the year before. That’s called inflation kids, or the more inclusive term cost of living.
But that’s not it. What about paying for college for her son? What about parent care? (I doubt the reservation has a great nursing home or assisted living facility). What about her own care? How many more staff members? What if she gets sued?? This is all open to creditors. So really with life being life, Kimmys’ assurances are worth about as much as the Reverands. And, let’s be honest, Jaqueline would absolutely want some sort of legacy to be left behind so she will never be forgotten. May be an endowment? A wing of a museum or hospital? A scholarship program? Where is the money for that? Not in any plan here. So needless to say Kimmy’s plan is far from complete.
And that, my friends, is why you should never take your financial advice from sitcom characters.
As a stage manager, you don’t have a personality you have a job title, stage manager. This means you are the person who can get stuff done. You can get it done quickly, correctly and by pissing off the fewest amount of people. It’s a tough job but one of the most rewarding ones I have ever had. Now, to be clear, I quit the first stage management job I had. I found it ridiculous that actors couldn’t remember their own blocking, or rehearsal schedule, or props. And it was strange to me that a director couldn’t just put together and distribute a rehearsal schedule and report of what happened there. So I quit. After missing one rehearsal of “West Side Story” at the Jewish Community Center in Tenafly, NJ I got a call from about 5 of the cast members, one of whom I had a massive crush on, all begging me to come back. Saying that things didn’t get done without me. That they needed me to do the show. That was it. I was hooked.
I did more stage managing in college. I yelled back across Boston Common to people (some of whom now on Broadway) what their rehearsal call times were when I saw them between classes at Emerson. It was here that I learned that stage managing was much more than taking good notes (though that is a HUGE part). Stage managing was being the conduit for the directors, designers, actors and producers to honor their amazing vision in a way that was safe and repeatable night after night. It was never being on the side of an individual and instead always being on the side of the production. Stage managing meant making sure everyone on the show had all the information they needed in a way that let them know they were appreciated and respected. It meant making people feel safe and expressed. (Not the easiest job when your actors were literally hanging on chains from the lighting grid.)
After my car accident when I was no longer able to stage manage I started working in finance. To my complete shock I used every single skill I had learned as a stage manager. Only now the client is the director and the producer and it’s my job to help them find the designers (now financial vendors) and keep everyone in the conversation so that when clients get to opening night (retirement) everything works.
There are a few differences. Now instead of a production binder I deliver to my clients a personal financial website – but it serves the exact same purpose: transparency and tracking. There is no audience, which, let’s be honest, makes the whole thing earlier. I still have people reviewing my work and passing judgement on a daily basis. And sometimes it’s not clear if it is good work or luck that makes my strategy work.
I have not stage managed a show in nearly five years. But I am still a stage manager. I just have a different job title now.
There are certain words people bandy about like everyone knows what they mean. And I don't think that's true. People are born knowing anything about finance, it's all learned. The three that are the most prevalent in fiance are taxes, stocks and bonds. Here I offer just a little context for you to steal and use at a cocktail party.
I talk about taxes a decent amount so I just want to makes sure we are all on the same page here. So there are all sorts of taxes. I’m only going to address 2 – ordinary income tax and capital gains. First is ordinary income tax, the cruel bitch. Here’s a picture of the history of taxes. Important thing to note:
- People used to pay WAY more. Like up to 94ish% on their top dollars
- Taxes always suck now, but historically they are still pretty low
- The average highest tax bracket is 60% and the law of averages states that numbers are always moving towards their average so it stands to reason that taxes are going up. (Well that and the massive US deficit.)
The Stock Market or Ya Know, Wall Street Stuff
Owning stock in a company means that you own a share of that company. And from that notion an entire market was created. To me the stock market is like CatDog, the old Nickelodeon tv show, just when I start to think I understand it completely something new pops up that changes everything and kind of upsets me. I mean really, where does CatDog poop from?! How do stocks go up? What makes them go down? I know now that I got all licensed but really when you think about it, things are pretty arbitrary. I mean try to find a pattern in the chart below! I can’t, can you? I know there is a downturn every 3-7 years but not specifically when. I know the average return is 5.53% but I don’t know what my personal average will be since it depends on when I buy into the market and when I sell out.
Bonds, Because They Have Fiber
Bonds are kind of the opposite of stocks. When you own a bond it essentially means that you loaned money to someone/place and they are going to pay you interest on that money and then, after a certain amount of time, they will pay you back. Some people think bonds are a more reliable market because there is less chance of losing your initial investment (principle). Which is true but take a look at the chart below. If you were depending on bond interest (the money that comes when you own bonds) to live on the difference between 18% and 5% is massive. On $1,000,000 that’s either $180,000 or $50,000.
Basically this is all to say that with taxes and investments there are no guarantees. We can't predict the future. And without that skill, we leave ourselves open to risk whenever we get in the ring with taxes, stocks or bonds. Thankfully there are places you can get guarantees with financial products but I'll leave that for another day.
That’s right, I said it. Schmurf. But seriously folks, why does your net worth matter if you’re not aiming for the Forbes list? Well, think of it this way (you may want a shot of whisky before you read this next part), your net worth is the result of every financial decision you have ever made and at some unknown point in the future it will be responsible for financing the rest of your life.
Yeah, shit just got real.
Your net worth can be calculated by taking the sum of all of your assets (everything you own) and subtracting your liabilities (everything you owe). The most traditional way of looking at this is on a t-chart or balance sheet.
A common trap people fall into is thinking that assets are good and liabilities are bad and this is not the case. Do some liabilities wreak havoc on your life? Absolutely. Are some assets the best thing you could have? Totally. But that does not mean that every assets is good for every person at every point in their life. Let’s be honest, if there was one perfect asset we would all line up like tweens waiting to get back stage at a One Direction concert to get it. And as far as the liabilities, student loans suck but the college degree may be worth it. And mortgage payments are never the most fun autodraft from your checking account but it’s lovely to be able to put up a backsplash without asking a landlord. I guess where I am going with this is the waters get muddied and there is no one right way for a balance sheet to look. But there are some guidelines.
Balance Sheet Guidelines
#1 Net worth should be positive
Hmm… that’s actually the only one I have that applies to everyone. And is self explanatory.
#2 Mo’ Income Mo’ Problems
Most people think that all problems are solved when your income goes up. NOT TRUE! More income tends to mean more taxes, more expenses, more stuff, more property, so more protection (I hope!) and then you get used to it. Here’s the truth, the entire reason I am work in finance is so I have the power to make sure no one ever falls into the first Broadway contract trap ever again. Here’s how it gets you:
You audition for years. You start getting more call backs but never get the contract. Until that one magical day you get the offer for your first Broadway contract as a principal in “Hands on a Hardbody.” You see your guaranteed rehearsal, tech and run salary. You know extras are coming with the press events, Tony’s, recording the sound track and so on. So you move out of your spacious $1200 a month Astoria one bedroom to a $2500 a month studio in Hells Kitchen (so you can be walking distance to the theatre). You get a new couch, new mattress, flat screen, 3-d, high def, projection tv and all the premium channels. You spend a lot of money on your opening night outfit and you’re picking up rounds at the bar for everyone and their mother (literally because it’s other peoples first Broadway contract too). And then Ben Brantley (that douche) pans you in the Times because you don’t have a star. And then the notice goes up. And all of sudden, you are out of work in a month. You have credit card debt, a rent you can’t afford and probably gave all your “extra money” to the teat of the student loan. To put a fine point on it, you’re fucked.
And that is the curse of the first Broadway show contract. And what I have seen over and over again and have now sworn that never again will it happen. Not on my watch.
#3 Balance Bitches
Yeah, it’s a balance sheet. That means there should be balance in every way. Domain to domain. Within the domains. Think of it as a house. Cash flow is your foundations – because nothing exists without it. But that alone does not a house make. You need to leverage walls and floors that the Assets and Liabilities, they work together to expand the structure in a responsible and sturdy way. And Protection is the roof, protecting you from the elements. Without these all working in concert your house will fall down. And my suggestion is that you not only aim for balance but for guarantees on that balance maintaining as long as you can. How? You ask. Keep reading. (Boom. Drops mic, stops typing.)
Let’s start at the very beginning. Because, as Julie Andrews has been known to say, it’s a very good place to start. Everyone has been told since the dawn of time that they should be saving. Just like everyone has been told that if you want to lose weight you have to eat less. So we know what to do, why don’t we do it? My thought is that we don’t have a clear enough vision of what it looks like on the other end of the journey. What does it look like to save? And what is the money being saved for? And why can’t I spend it now on that awesome bag?
It all comes down to the first financial concept I ever learned, the one that actually got me hooked on finance in the first place. It’s called Time Value of Money or Lost Opportunity Cost. Let’s break this down because I guarantee that getting this will change how you think about money for the rest of your life. The simplest way to say it is “You can only spend each dollar you have once. And once that dollar is gone you can’t use it to buy anything else or invest in anything else or pay off anything else.” In other words you have lost all future use of that dollar.
So if I buy a grande soy chai latte at Starbucks (because it tastes like Christmas) for $4.98 I can’t put that $4.98 into my savings account. And it can’t grow over time. So that delicious jolt of caffeine cost me not only the $4.98 but all the future growth I am giving up also. Got it? Great! Now, here’s the rub. I’m going to buy many grande soy chai lattes from Starbucks over the course of my working years. (Again, because they taste like Christmas!) So let’s say that I were to have one of those 6 days a week for the next 30 years that comes out to $43,027 total dollars spent. But, let’s be honest, at some point Starbucks is going to raise their prices to keep up with inflation (a talk for a few pages from here). So let’s assume the cost of the SCL (soy chai latte) goes up 2% a year, that would mean I spent $58,175. But wait, there’s more! That is $58,175 that is never going into the bank and growing. So if my bank were giving me a 2% interest rate every year on all the money I had with them, not putting my SCL money there means I am losing out on $19,750 of interest for a total loss of $77,925!!
To sum up, by choosing to indulge in my SCL habit I would be forfeiting $77,925 of retirement savings.
Sounds pretty dire, no? May be. The truth is that without some sort of caffeine jolt once a day I may not survive to retirement. And I certainly wouldn’t be productive at 3 o’clock in the afternoon. And there we seem to be stuck. $77,925 seems like too much to spend on fancy coffee beverages but not working isn’t an option. As with everything else in life, it all comes down to priorities. And so I have compromised. With myself. And instead of rocking the SCL daily I now alternate in a Dunkin Donuts medium hazelnut with milk and sugar. And my total cost over 30 years is cut to $57,538. I’m saving over $20,000 just by switching out my caffeine beverage half the week. Now imagine what could happen if I would wake up early enough to make my own coffee!!
This is the impact caused by every dollar you spend.
So, why do you need to save? Because only so much money is coming into your world over the course of your life and you only get to spend each dollar once. Now or later. And if you spend it all now, there won’t be any left for later. One of my clients refers to her savings account as her “deferred shopping plan” and she couldn’t be more correct.
Make It Happen!
Track how much money you spend in a week on [insert your vice here]. Multiply by 52. That’s how much you spend on it a year. Multiply by 30. That’s roughly how much you will spend on it over the course of your working years. Ask yourself, it is worth this much to me?
As you go through the day evaluate everything you spend money on and really decide if it’s a priority for you. If it isn’t, don’t buy it and immediately transfer what you would have spent on it into a savings account. See how much you have saved by the end of a week.
Simply track everything you spend money on for one week. Categorize and see how much you spend on things you don’t consider a priority in your life.
I’m angry. Yup, that’s how this is starting: I am (expletive deleted) angry! I graduated with a BFA from Emerson College in Theater Management and Production. I had no accounting class, no personal finance class, no economic class. I did, however, learn how to climb a ladder in class and tie knots. Not to say I haven’t used all of the skills I learned at college but there were so many left out that are integral to running a freelance business. And running a freelance or small business is what everyone in the arts does. In some cases, not only are you the CEO (chief executive officer), CFO (chief financial officer) and COO (chief operating officer) but you are also the product and the materials!! None of those skills are included in any arts degree I know of and so I’m pissed off about it. But me being angry doesn’t help you. Well, actually, if you’re reading this I guess it does since that’s kind of why I’m sitting here eating donuts and drinking bloody marys and writing right now. Back to the point, if these skills aren’t taught in school – how do you learn them? The truth is, I’m really not sure. So I’m going to share with you some of the top tips from all the amazing people I know who have figured it out. Because you deserve to make money! Yes it’s called a play but as an actor (director/stage manager/designer/choreographer…) you WORK for a living. And not as in “werk gurrl, werk. That’s for your down time.
So what can you do about it?! Here are three suggestions and a picture of my pug, Cleopatra Norma Desmod to help.
1. Separation of church and state – Business accounts and personal accounts. Even if you are a sole proprietor this holds true. It’s easier for you to track your income and to know if your arts business is running at a profit or a loss. This means if you need to buy art supplies or an audition dress, it comes from the business account or is purchased on the business card. If you buy dog food for say, your pug who is on prescription food (not that I know), that goes on the personal card or from the personal account. Sometimes you may pay your personal account extra from the business account. Sometimes you may borrow from your personal account to your business account. Just keep track. And by keep track, I mean it could be QuickBooks, excel or just some sticky notes. Doesn’t matter to me as long as the system works.
2. Business Plans!! – Yeah, you have to have a business plan. Otherwise you’re like Alice in Wonderland talking to the Cheshire Cat.
“Would you tell me, please , which way I ought to go from here?"
"That depends a good deal on where you want to get to."
"I don't much care where –"
"Then it doesn't matter which way you go.”
― Lewis Carroll, Alice in Wonderland
Yeah, that’s you sans business plan. What are your goals for the year? What income do you want? Where do you want to work? When do want to take vacation? HOW WILL YOU DO IT?!?! I’m not saying everything on your business plan is going to come true but at least you have a direction.
3. Get a Team – No one is great at everything. Surround yourself by people who are the best at things that you are the worst at. (And might I recommend checking out www.entertainingfinance.com for some great potential team members?)
I think it’s important that you know a little about me so you know what biases I have when you read this. Now I’m going to try to keep these posts as factual as possible but let’s be honest, all of us are colored by the things that have happened to us over the course of our lives. The main this I want you to know is that I ended up as a financial adviser by accident. Car accident to be exact. I was getting my associates degree in massage therapy in NYC the summer of the horrible heat wave and as a “starving artist” my roommate and I had no air conditioner. So I slept with frozen peas. Dirty, right? Wrong. Also in that kind of heat frozen peas only stay frozen for about 20 minutes before you have to switch them out. So on no sleep I borrowed my parents’ car to drive home and take a nap in their central air conditioned house in northern NJ. 9 minutes from my sweet arrival home I turned off the highway, and relaxed for 10 seconds, fell asleep and my car veered across the road, up on the curb and into a tree. I’ll spare you the gory details, all you really need to know is that I destroyed my arm. Fractures my humorous into 5 pieces. It took 2 surgeons hours to put it back together. And to this day (almost 10 years later) I am still dealing with the repercussions. Needless to say with a break like that there was no massage therapy for me to do. I couldn’t stage manage since my arm was locked in a 90 degree angle for months (and I was on Percocet to help me through the physical therapy 3 times a week). Had I not had health insurance and my parents not had great auto insurance my medical bills would have put me into 6 figure debt that I would have never gotten out of. The truth is, I probably wouldn’t have had all the therapy and might not have gained full mobility back in my arm. Anyway, after a few weeks of taking up residency on my parents couch, they came in one day and asked me if I had plans to go back to work. I looked at them and said, “Look at me. I can’t do anything I have a degree in, I can be a temp or a cashier. I can’t do anything. So you find the fool who will hire me and I’ll work for them.” They agreed that I made some good point and said they would get back to me. The next day my dad came in and said, “You’re working for me.” He had been a financial adviser for about 25 years at that point. “You’ll get licensed and help me out. If you like it you’ll stay. If not, when you’re better you’ll go back to whatever you want to do.” And that’s how it started.
So, hi I'm Bailie and I'm attempting to write something interesting on the subject of finance. Who am I to attempt such a feat, you may ask your self. Well, I have a BFA in Theatre Management and Production from Emerson College. Which is simply meant to imply that if I can understand financial talk, you can understand financial talk.
Second, my intention is to write without using the term “dude.” But I really can’t make any promises.
Third, this blog is by no means everything you need to know to be financially successful. If anything this is the first step of the first step. But my hope is that as a result of reading this you will know what financial success means to you, what you are willing to do to achieve it and that you know how to get to the tools and people who can help you.
Fourth, why and I doing this? Well, I think Nikka Graff Lanzarone summed it up best: “Don’t tell me I can’t have the American dream because I’m a creative person”
As for the picture - it's as close as I can get to a pumpkin spiced pug on this very autumnal day!