Being successful is what any artist aspires to do, but it also comes with a lot of pressure. For most, this will be their first time seeing that much money, and depending on their experience, upbringing, and the people around them, managing this can be overwhelming. This is especially true if you did not know money management before. However, managing your money all boils down to a few fundamental principles that anyone can apply. Here are a few money management tips for young successful recording artists.
Invest in Yourself
While a lot of musical artists will want to start looking at things like real estate, cars, or toys, this should be an occasion to invest in yourself. This means that you should focus on things that could help you become better and eventually branch out. Maybe you could take some acting or dancing lessons, or learn how to produce your records if you’re a vocal artist. It would help if you also spent some of the money on hiring a good wealth manager.
Don’t Overspend on Recording.
Just because you had a hit, doesn’t mean that you have to overspend on the recording. The difference between a big-ticket famous studio and a regular studio will make little difference when everything is set and done. Studio time often has to be covered by the artist and is also one of the areas where so many people end up overspending.
Instead, it would help if you tried to take advantage of free recording sessions as much as you can. Brooklyn has a lot of great and affordable recording studios you can check out. You could have a free session at Pirate Studios, which is just opening their Brooklyn recording studio, for instance. They have everything you need for a professional session, only for a fraction of the price. Their studios are also open 24/7 with self-booking, and you can bring in your engineering team with you if you want.
Shelve Some of Your Income
One of the standard techniques that artists use to save money is to only live on the part of their income. For instance, some will never touch their royalty cheques but will live on their merchandise, touring, and appearance money. This alone could make saving much easier, and make sure that you have something for a rainy day. Otherwise, a good advisor will be able to help you give you some tips on where and how to save money, as well as how much of your income should go towards savings.
Diversify Your Income
You should also focus on building as many streams of income as you can without compromising your brand or artistic integrity. Make sure that you look at partnership possibilities, and see if the brand you decide to work with aligns with your core principles. You might not know where you might reach a new audience. You also never know whether a stream of income could become your main one and start eclipsing revenue from music. Merchandising, in particular, could turn into something big, so if you have other interests, explore them and see if you could turn any of these into a credible product.
Be Financially Literate
While you might not be able to get the qualifications to manage all of your money yourself, you cannot delegate money management completely. This is a sure way to get ripped off, and the reason for so many music industry horror stories. Just ask lead singer of the popular ‘90s alt-rock band Nine Inch Nails, Trent Reznor.
In a case that went in his favor in 2005, Reznor was awarded a 2.9 million judgment after it was found that his manager had been skimming money off the top for years. If you leave your money to someone who knows everything about it and you don’t, the chances are very high that you’ll get taken advantage of.
The same goes for signing contracts. While you may never have the legal acumen to truly understand everything, you have to take advantage of the resources available to you as much as you can. That means having more than one lawyer on call, and certainly not the one that was recommended by the record company.
Creative Success is Not a Guarantee for Longevity
While everything may seem okay now, know that it only takes one disaster for your whole world to turn upside down. There have been tragic events where artists were not able to perform or even record anymore. We can think of one case where a former member of a rap supergroup lost the use of his vocal cords after a terrible accident. Luckily for him, he was still able to make money by working as a writer. This is why it’s always important to have a plan B, even if you feel like you’re on top of the world.
The music industry is a tough one, but can also be an incredibly rewarding one when appropriately managed. One of the most important things to manage is your finances, so make sure you stay on top of them at all times.