* Conquering your financial fears so they are no longer a barrier to your success
* Becoming financially organized so you know your exact financial starting point and can develop a strong plan for the future
* Creating a debt elimination plan that will allow you to stop stressing out about those credit card bills
* Developing attainable financial goals and dreams that inspire and motivate you to move forward
* Much more besides!
So click Prosperity for more information and registration details, and I will look forward to seeing some of you there.
I am working on a specific investing post for next week, so stay tuned.
Also, please click the "comments" button below and let me hear from you - I always value people's input!
To your prosperity!
Miata
> > SOCIALISM
> > You have 2 cows.
> > You give one to your neighbour.
> >
> > COMMUNISM
> > You have 2 cows.
> > The State takes both and gives you some milk.
> >
> > FASCISM
> > You have 2 cows.
> > The State takes both and sells you some milk.
> >
> > NAZISM
> > You have 2 cows.
> > The State takes both and shoots you.
> >
> > BUREAUCRATISM
> > You have 2 cows.
> > The State takes both, shoots one, milks the other, and then throws the
> > milk away...
> >
> > TRADITIONAL CAPITALISM
> > You have two cows.
> > You sell one and buy a bull.
> > Your herd multiplies, and the economy grows.
> > You sell them and retire on the income.
> >
> > SURREALISM
> > You have two giraffes.
> > The government requires you to take harmonica lessons
> >
> > AN AMERICAN CORPORATION
> > You have two cows.
> > You sell one, and force the other to produce the milk of four cows.
> > Later, you hire a consultant to analyse why the cow has dropped dead.
> >
> > ENRON VENTURE CAPITALISM
> > You have two cows.
> > You sell three of them to your publicly listed company, using letters
> > of credit opened by your brother-in-law at the bank, then execute a
> > debt/equity swap with an associated general offer so that you get all
> > four cows back, with a tax exemption for five cows.
> > The milk rights of the six cows are transferred via an intermediary to
> > a Cayman Island Company secretly owned by the majority shareholder who
> > sells the rights to all seven cows back to your listed company.
> > The annual report says the company owns eight cows, with an option on
> one more.
> > You sell one cow to buy a new president of the United States, leaving
> > you with nine cows.
> > No balance sheet provided with the release.
> > The public then buys your bull.
> >
> > A FRENCH CORPORATION
> > You have two cows.
> > You go on strike, organise a riot, and block the roads, because you
> > want three cows.
> >
> > A JAPANESE CORPORATION
> > You have two cows.
> > You redesign them so they are one-tenth the size of an ordinary cow
> > and produce twenty times the milk.
> > You then create a clever cow cartoon image called 'Cowkimon' and
> > market it worldwide.
> >
> > A GERMAN CORPORATION
> > You have two cows.
> > You re-engineer them so they live for 100 years, eat once a month, and
> > milk themselves.
> >
> > AN ITALIAN CORPORATION
> > You have two cows, but you don't know where they are.
> > You decide to have lunch.
> >
> > A RUSSIAN CORPORATION
> > You have two cows.
> > You count them and learn you have five cows.
> > You count them again and learn you have 42 cows.
> > You count them again and learn you have 2 cows.
> > You stop counting cows and open another bottle of vodka.
> >
> > A SWISS CORPORATION
> > You have 5000 cows. None of them belong to you.
> > You charge the owners for storing them.
> >
> > A CHINESE CORPORATION
> > You have two cows.
> > You have 300 people milking them.
> > You claim that you have full employment, and high bovine productivity.
> > You arrest the newsman who reported the real situation.
> > AN INDIAN CORPORATION
> > You have two cows.
> > You worship them.
> > A BRITISH CORPORATION
> > You have two cows.
> > Both are mad.
> > AN IRAQI CORPORATION
> > Everyone thinks you have lots of cows.
> > You tell them that you have none.
> > No-one believes you, so they bomb the **** out of you and invade your
> country.
> > You still have no cows, but at least now you are part of a
> Democracy....
> > AN AUSTRALIAN CORPORATION
> > You have two cows.
> > Business seems pretty good.
> > You close the office and go for a few beers to celebrate.
> > A NEW ZEALAND CORPORATION
> > You have two cows.
> > The one on the left looks very attractive
Panic! Run for your lives! The world is collapsing! In the last year, the housing market has collapsed, taking with it the stock market. Oil prices have exploded, banks are showing record losses (how about $10 Billion for a quarter anyone?), and going out of business left, right and center, and, basically, lots of people’s money is going down the toilet. So now is not exactly the best time to be learning about one’s finances, right.
WRONG!! There is a great quote by Warren Buffet (Multi-Billionaire, Philanthropist and strong candidate for greatest investor ever) that says:
“Be fearful when others are greedy, and only be greedy when others are fearful”.
What happens when there is a big economic slump is that people panic. Sometimes this is with good reason: when it is easy to borrow, people tend to get in over their heads with debt. Combine that with a housing market bubble, and suddenly that house you’re making payments on is worth 25%less than you paid for it. Ouch. Or those banking stocks that were being pumped by brokers collapsed under the weight of bad loans. Ouch again. Or... but you get the picture. The trick to riding this all out, however, is to keep ones head, and not follow the herd.
Take stocks as an example. Let’s say you bought a solid company when it was at $25. Things happen, we hit an economic downturn, and suddenly that same stock is worth $15. Oh no. We’ve lost almost half our money. Quick, sell before we lose any more...
...Or not. If the company is strong, then it might not be its specific results that have caused its down turn, but a more general tide of poor performance across the country. If this is the case, then all selling does is make real the money you have so far only lost on paper. Combine this with the fact that you should be looking at holding stocks for at least the 3-5 year range, and with luck you won’t make any quick decisions that will loose you money. Everything goes in cycles, so instead of loosing ones head (and money at the same time), remember the old maxim:
“This too shall pass”
And keep on keeping on. The other thing, of course, is that when everything is down is actually a perfect time to be looking at putting money into the market, a house, or other currently depressed investment vehicle. I remember during the last economic downturn, in early 2002, I had just put my first real money into the stock market. A friend said to me “Why on earth would you be buying now? Everything is down?” I looked at him and said “Exactly”. We made over 50% return on that money in 2 years.
Not that we should be running out there and jumping into things willy-nilly. Random buying will make you just as broke as panic selling. But now is the time to seriously look at your financial situation. As opposed to fleeing all things financial in the coming months with the rest of the herd, swim up stream a little. Learn how to handle your debt properly, so that it isn’t hanging over you any more. Start a high interest wealth account so that you can have some money to start investing with in the next year. Set up your finances so that you are maximizing your tax deductions. Learn about how to handle money now, so that when things turn around (which they will) you are way ahead of the curve, instead of behind it.
Everyone’s going out for drinks after class. There’s a bar down the street that has great appetizers, and the cocktails aren’t too expensive, and it will be really good to connect with other people in the class, so never mind the fact that, with a couple of $7 drinks and an $8 plate of food and a 20% tip, that social hour ends up costing you $25. And you have class a couple of times per week, so that adds up to an extra $200 per month that you could really do with avoiding, but everyone else is doing it, and you don’t want to be the one to admit that finances are tight, and be a downer on the evening, so you go along and have a good time, but all the while feeling just slightly anxious because you know that most of this is going to end up on a credit card at the end of the month, and those bills are getting high enough as it is...
Does any of this sound familiar? I know this used to a regular occurrence when I first moved to Los Angeles to pursue my acting career. I would go out with friends after class, or rehearsal, and have a great time, but there would always be that nagging voice at the back of my head telling me that I couldn’t afford this. So the question is: how does one balance the need for a social life with the realities of a tight budget? We have three different suggestions here.
1. Don’t try to keep up with the Joneses. We are in some ways lucky, as artists, that we don’t have the pressure of some of our corporate counterparts in this area. For us, this area is more about dress and eating out than driving the newest Mercedes or living in the right part of town. But it is still a factor. The need to “look good” is almost beaten into us from an early age, so avoiding falling into this trap can be hard. Try shopping at a discount store instead of going to name-brand shops, or having coffee with friends instead of drinks (a $1.50 coffee is much easier on the wallet than a $6 beer). You will often find, especially when it comes to socializing, that people are really glad not to be spending money, as they are all engaged in keeping up with you as well, even if they cannot necessarily afford it either...
2. Forecast your fun. Forecasting is the process of projecting what your spending will be in any area of your life. The way to determine this is to complete a Chart of Expenses (email us at info@abundancebound if you would like one), from which you will be able to see exactly what you are spending, on average, across the financial board. You can then determine exactly what areas you are overspending in, and where you can spend a bit more if necessary. The key to this process is not denial, however: not not remove categories as trivial without serious consideration, because there is nothing like “forbidden fruit” for enticing you back. So never go into a month saying “I am not going to go out at all” - you are simply setting yourself up for failure. Instead, allocate a certain amount for “Eating Out”, or “Drinks”, or whatever other category you want, and then, when the end of the month comes around and you are near the end of your allocated funds, suggest Denny’s instead of the local bar for those after class drinks.
3. Work together to save money. Given that most people are in the same boat as you when it comes to money, be the first one to broach the subject of saving money with your friends. There is such a taboo in this country about discussing one’s finances that most people go through life never saying more than the obligatory “I’m fine...” (usually a lie) or “I’m broke...” (but with no real attempt to solve the issues causing that situation). Break with tradition and work with others on ways to both save and make more money. You will be amazed at the ideas that come out of brainstorming these things with like minded individuals, so give it a go! At the very least, it will take the pressure off the next time you say “Make mine a water...”
So anyway, I hope these pointers give you some ideas about how to have fun but still make sound financial decisions at the same time. Again, it is never about saying “I won
‘t go out until I’ve made $X.” That may work for some people, but I have yet to meet them. Instead, map out your spending, and put your money towards things that you will enjoy. Instead of feeling guilty about buying a Ice blended latte every day, and then stressed about the $30 on drinks going out with friends, drink regular coffee instead. $1.50 a day instead of $3.50 is $14 per week you have saved, which is $28 every two weeks, which covers an evening out with friends every other week. Talk to people, and work out things together, and then stick to your plan. Your bank account and stress levels will thank you for it.
“Economic Stimulus” is something at the forefront of everyone’s mind these days, especially in the entertainment industry. With the Dollar at an almost record low, gas prices soaring, the general economy spluttering, a costly WGA strike just behind us and a possible SAG strike looming, things are looking a little gloomy.
Luckily, a little relief is at hand. As of May, those that have filed their income tax returns will be starting to get bonus checks in the mail; $600 for an individual, $1,200 for a family (check www.irs.gov for details on eligibility and timing). So the question on everybody’s mind is: “What do I do with my new found money?”
If you ask the government, you spend it. All of it. After all, that is the point of an “economic stimulus” package: you give people money, which they go out and spend, which generates cashflow to numerous business that would otherwise go with out, which means more money they spend in turn on supplies, and staff, and taxes... you get the picture. However, unless you strongly feel it is your patriotic duty to blow through your upcoming $600 at Macy’s (or Target, depending on where you like to shop), we would encourage you to consider using this windfall as your very own, personal “economic stimulus” package...
So, if we accept that we are not going to do what GW and friends want us to do with our money (you rebel, you), what to do with it? We would suggest putting it into three distinct areas in your personal financial life.
Debt Relief - $200. If $600 is the amount you end up with, then $200 of it should go to the credit cards. This should be on top of whatever amount you are paying them anyway, as it means the additional money will go straight to the knocking down the principle. Not only will this reduce your interest payment next time, but will feel great as well - something that is all to rare when it comes to money, but is none-the-less crucial to work our way out of tight financial situations.
Wealth Account - $200. This is one of the cores of the Artists’ Prosperity System, and is essential to any wealth building process. All a “Wealth Account” is is a high interest savings account which you use to build up money in until you are ready to invest with it. We think highly of ING for this (www.ingdirect.com), and they always offer highly competitive rates, but there are certainly plenty of other institutions that are just as good - they can easily be researched online. What I want to stress with this account, before we move on, is that it needs to be liquid (ie you can get your money in and out of it easily), and that it is not a savings account, or an emergency account, or a travel account (all of which can be great, but are separate from your wealth account). You only take many out of your wealth account to buy assets, namely things that either generate money for your or increase in value. Nothing else. Ever. Period. Have I made my point?
Treat Yourself - $200. OK, so blow through some of the money, and feel great about doing it! When else have you been given money to go out and spend? And it is for the good of the country! A real win win! So get out there and buy a new shirt, or that pair of shoes you have been coveting, or a couple of games for the Wii, totally guilt free. Reward is an essential part of building wealth, because it makes the discipline required in other financial areas significantly easier to bear. So treat yourself. You have, after all, just paid an extra $200 towards your debt, and started a high interest account (into which you will be putting money regularly, right?), so now is the time to spoil yourself a little.
And that is it. Nice and simple. Three areas into which to put your “free money” - and any other money that comes your way if you choose to. Some of you may, of course, want to put more into debt and your new wealth account than into a splurge for yourself, and that is fine. Just don’t take it out all together. As I said earlier, one of the keys to growing money is feeling good about it, so you really do need to reward yourself for having taken action on improving your finances. There are a number of places to go next but, if you really allocate your money into the three areas listed above, you have laid a great foundation for yourself, and taken a strong step down the road of financial security and prosperity.
But the reality is that there are several small, simple things that anyone can do to improve their financial situation right away, things that will lay great ground work to build on over the course of people's creative careers.
Pay Yourself First
This really is the corner stone of any long term financial stability, let alone wealth. What this actually means is simply that, every month, you are putting a set percentage of your income into a high interest savings account, and not touching it until you are ready to invest with that money. And that is the key. This is not the "rainy day" account that you dip into when things get hard, nor is this the "splurge" account to get something special for yourself as a celebration. Money is only withdrawn from this account to buy assets with - an asset being defined in this case as something that either makes you money, or appreciates (increases) in value (so a new car would not be an asset under this definition!). Do this consistently and, over time, you will build up a very nice amount of cash to be investing with.
Regular Money Days - records & Organization
A "Money Day" is simply a day that you set aside to work on your finances. Now, it does not have to be a whole day, of course - unless your situation merits it... usually because you haven't done one for a long time! Personally, I set aside a couple of hours every other week, and then a meeting with my accountant over the phone every couple of months. Doing this accomplishes two things: it keeps your accounts in impeccable order, and it allows you not to think about your finances between times, freeing you up to think about and do other things... like your art
Fore-cast your spending
Forecasting is the process of allocating where your money will be spent. You start by going through your Chart of Expenses (email us at info@abundancebound.com if you need one of these), and finding out where and how you currently spend your money. You then go through that list, and determine which categories cannot change (rent, for example) and which ones can (groceries, entertainment etc). Having got that list, you can then make strong, educated decisions about where you choose to spend your money... as opposed to just blindly trying to cut out Starbucks or eating out. And that is the big difference between this process and traditional budgeting. We never suggest eliminating a category, as we have all heard "absence makes the heart grow fonder". But as opposed to going to Starbucks every day, can you go every other day? Or order a Tall instead of a Venti? Doing this in several areas can make a huge difference to your overall spending.
Keep business separate from personal
Many of us do something called "co-mingling": we operate our entire lives out of a personal checking account. The problem with this is that no "real" business does this - you would never see the CEO of Kinkos write a check for the company out of his personal account. What we need to do, at the very least, is set up a DBA (Doing Business As) account (www.legalzoom.com can help with this) for our artistic career, and get a business bank account associated with that DBA. Not only does this then allow us to clearly see what we are spending and earning through our acting career or art sales, but it also legitimizes the tax deductions we take due to our art - the IRS can clearly see that we are running our career as a business, not as a hobby. The reason this is important? Business expenses are deductible, hobby expenses are not (this distinction can hurt, to the tune of thousands of dollars of back taxes: one of our students got nailed this way)
Regular financial learning
Keep doing what you are doing right now! We take time to go to art school, acting classes, workshops... but we expect our finances - something most of us have never worked on (a fundamental problem with our education system, and something we will address in a separate article) - to somehow take care of themselves. Not only is this not realistic, it is dangerous, as we can make numerous serious mistakes blundering around while we try and find our financial way. The biggest reason people stop pursuing their artistic careers is lack of money. Knowing this, doesn't it make sense to put some time into financial education now, so that you are around for the long term? We read all the time about people only breaking out in their forties: wouldn't it have been sad if they had had to leave the arts before then because they had to make money? And wouldn't it be sad if that was going to happen to you... and you had to quit for the same reason? So carve out some time now to learn about money - it will be well worth it in the long run.
So there you have it - five simple things you can implement right now that will significantly improve your financial picture over the coming months and years. Incorporating all of these things into you daily and weekly lives is only a tiny time commitment of time, but the dividends from doing so can last a lifetime.
I would welcome any comments or thoughts. Also, don't forget to check out our Artists' Prosperity System
for details on how to get $300 worth of FREE GIFTS!
To your prosperity!
We’re all familiar with the phrase “What you don’t know can’t hurt you.” Unfortunately, especially when it comes to money, it’s completely wrong. What we don’t know about money can lead to extremely painful and expensive mistakes.
What we want to achieve with this article is nothing grand. No big concepts or sweeping statements. Our goal is to provide just a few simple, practical things you can implement right away that can save anywhere from a few, to a few hundred, dollars a month.
The first step to getting a handle on your finances is completing a Chart of Expenses. (Email us at info@abundancebound.com with “Chart Of Expenses” in the subject line and we will send you this Excel spreadsheet). This document will guide you in determining (in extreme detail) exactly how you are spending your money on a monthly basis. It also allows you to determine your average monthly earnings. Completing this chart can be a tedious process, but is a crucial part of really understanding your financial situation.
Something fascinating happens when you start to really look at your finances. All of these things on which you didn’t realize you were spending money, will suddenly surface. It is amazing (and frightening) to discover how much is disappearing through financial leaks we don’t even know are there.
Some examples:
Where do you bank? How much are you paying just to have your account? Are you charged extra if you actually go into the bank and make deposits or withdrawals with a teller? We had one student who had never realized she was spending $30 per month in “Bank Charges.” Explore what options exist for free checking, free savings etc: then shift away from whoever you are currently banking with that is over charging you for this stuff.
What credit card do you use? Another student had a “great deal” with American Express. They were getting all kinds of special stuff... and were paying around $350 per year for it. Once they looked into the services that were actually important to them, it turned out that there was a free option that provided everything they needed. They had been paying that extra money every year for nothing.
Do you carry credit card “insurance?” We have all been guilty of this one. You know, the tele-marketer who signs us up for a free 30-day trial of some service, offering a free credit report or something similar. All we have to do is call and cancel if we don’t want to continue... and it seems such an easy thing to do at the time... and yet somehow we never do! Then three years later we find out we have been spending $40 per month for something we never used or cared about... you get the picture.
The point is that, with just a little bit of effort, all of us can probably find an extra $25-$100 or even more – just by taking the time to really figure our where our money is going. This is money that can start going to paying down debt, building investment accounts and actually creating a prosperous future. This month, make a commitment to find and plug your money leaks.
Putting it off will just make it more expensive.
***
Take action about your finances! Visit The Artists' Prosperity System to check out our new home study course, and really start taking control of your financial situation.
The main reason I am passing along this letter and my answer is because I get a lot of mail with this sort of request for 'help.'
"Can you look at my headshots and pick out the best one?"
"Can you send me the names of some agents who will help me start my acting career?"
"Will you read my screenplay idea and give me your thoughts on how I can sell it to Warner Brothers?"
"Can you get my pictures to J. Lo? I want to work with her."
"Should I move to New York or Hollywood?"
"I have an idea for a show I can star in. If you can get it to the right people, we can split the profits."
"Do I need a manager? If so, could you tell me who the good ones are? I don't want to get cheated."
... and so on. Okay ...
One of the first (most important) things I talk about in my courses, my articles, my columns and my blogs is the absolute necessity of doing the legwork and homework yourself.
As long as you live in a world where someone else is going to do the work it takes to get you into the acting business - well, you are not going to move forward - and you will probably get hurt ... financially or otherwise.
In fact, it is precisely this mindset that scammers are looking for. When a scammer meets an actor who believes it is possible for someone else to make it happen FOR them - he knows he's landed a sucker.
This belief in a one-step process (or a short-cut, or a secret doorway, or an easy way 'in') is what gets most actors in trouble.
When you think all you have to do is 'convince' an agent to represent you and you'll be on your way - you're just asking for trouble. The kind of agent that can be 'convinced' is generally a scam artist.
Real agents make their own decisions based on their assessment of how much money you'll make as an actor. If you aren't making any money now, don't expect a legitimate agent to be very interested in you.
When you focus all your energy on getting into the union - you are going to be unpleasantly surprised at the result. 93.6% of members of the acting unions earn less than 243 dollars a year. (This is one of my fake statistics - but I'll bet it's close.) Can you live on $243 a year? NO. That will barely cover your dues.
Will it be different for you when you get into the union? Not if you think getting into the union is a step you must take to be successful.
It isn't.
If you concentrate on making money as an actor, you will get into the unions and land an agent ... as a matter of course.
If you up and move to Hollywood or New York (London, Mumbai, Sydney, Vancouver, etc.) without a solid plan of action - in the hopes that you will meet someone who will help you achieve your dream ... you ARE going to end up an unhappy camper.
Again, scammers are looking for uninformed pigeons all the time. They will spot you, trap you and take your money. They're good at it. They've been doing it for years.
The absolute truth is that there are MANY steps (and a lot of them are difficult) that you MUST TAKE ON YOUR OWN - if you ever expect to make your goal of becoming a professional actor a reality.
Here are just a few:
You must learn how to get a good picture. This is not a matter of finding a good photographer - it's a matter of learning what you must do to make a great picture happen ... no matter who takes the pictures.
You must learn the 'culture' of show business and work within that reality. Most actors think this will "just come naturally" and find themselves, five years later, still working at a crummy job and trying to 'make it' in their spare time.
You must take care of yourself - yourself. 90% of actors don't have a sugar daddy or a family who will take care of them as they pursue their dreams. Somehow, successful actors make it a point to 'take care of business' by themselves. If you
need a 'keeper' to get the basics taken care of ... then your prospects are dim.
You must make a lot of decisions.
You will have to decide on a budget for your acting business.
You will have to decide whether your new 'friends' are for real or out for your money.
You will have to learn the 'map of the territory.'
You must decide what niche will work best for you.... and I'm just skimming the surface.
This idea, that you have to find other people to help you, is a major mistake. MAJOR MISTAKE.
This mindset is the reason I put together my four acting career courses, You Must Act!, Nail It! Headshot Secrets Revealed, and Action!
Not to plug the courses too outrageously, but if you want to know what ALL THE REAL STEPS you must take to have a professional acting career, get my courses.
(The nice thing about my stuff is that if they don't work for you, you can get your money back - be sure to read my One Year Guarantee for details.)
Also, read the biographies of successful actors.
Almost every biography has the elements (steps) that lead to a career in the business.
And you should read David Mamet's books - and K.Callen's books -- and Stanislavski - and Michael Shurtleff, Allan Miller, Lee Strasberg - well, it's a very long reading list. (Not to mention Michael Caine's video acting classes.)
In other words, there is lot of homework for you to do.
A dream without work to make it happen, remains a dream. You can't spend a dime of the money you make in dreams.
Is it easy to do it all this work on your own?
NO.
Is there a shortcut?
NO.
Is there another way?
NO.
You have to do it. Agents, managers, connections, etc - are people who come along AFTER you have started to succeed ... on your own.
There are three elements you must have in order to be successful on your own:
You must be willing to learn ... INFORMATION
You must do what it takes ... HARD WORK
You must not give up ... TENACITY
You don't need an agent, a manager, a teacher, a photographer, a friend, a lover, a consultant, a coach, or sugar daddy to take the steps necessary to get you to your destination.
In fact, if you wait for somebody else to do things for you, you will be waiting a long time ...
... like forever.
If you want to be a professional actor, you must get the information, do the hard work and be willing to keep at it for a while.
In other words... YOU must act.
Great article, so I really appreciate Bob letting us re-post it from his newsletter. And I feel that, although it is obviously directed at actors, the message is applicable across the artistic spectrum.
I would welcome any comments on this, so please leave them here, and I promise I will respond.
Also, if you are interested in courses to take you from your acting schools or art programs to a career in acting or the arts, don't forget to check out our monthly audio program "Monthly Money Management".
Until next time, to your prosperity!
