Is the Sky Falling?

The past two weeks have seen some of the greatest financial volatility and dire predictions of modern times. Even some of the most savvy investment experts seem on the verge of real panic as bad mortgage investments lead to broad problems throughout the economy.

Many of my friends are asking me "are we on the brink of another great depression?" Of course, I don't have a crystal ball and I don't know how bad things are going to get in the months to come. But I do know one thing: those who have been consistently saving money and living within their means will weather the coming storm better than those who haven't.

It's easy to get cynical and angry about the reckless Wall Street practices which led to this mess. I am as angry as every other honest investor about the collateral damage my portfolio is suffering as a result of greedy investment banker speculation. It makes me sick to think that taxpayers will be required to bail out these criminals.

But that is the nature of our globalized free market economy. Just as the rising tide of 2003-2007 lifted all boats, so the current economic contraction threatens to lower all boats to varying extents. Like it or not, we are all very interconnected these days, and in the long run, the upside of that global network outweighs the disadvantages.

Rest assured that the people involved in the riskiest speculation during the housing boom will suffer the most painful consequences in its aftermath, with or without a bailout. Those of us who have been conservatively investing and staying out of debt all along will also get hurt, but to a significantly lesser extent. The people who stand to suffer the most are those who never saved anything at all, and thus have no safety net to fall back on when times get tough.

This is not the time to abandon your savings plan. Just as you will have good days and bad days in your instrumental practice regimen, you can also expect to go through peaks and valleys on your path to financial independence. Remember that long-term winners persevere through thick and thin, knowing that there will be ups and downs along the way.

Staying Local, Staying Loyal

It's always taken a certain amount of courage to embark on a musical career, and now seems like a particularly daunting time, what with all of the current instability in the music business and the economy in general. One strategy to improve your odds for long-term stability is through cultivating steady relationships with employers in your local music scene.

Too many musicians view local gigs as mere stepping stones on the way to stardom, but I've found that if you really make the effort to cater to the needs of your local benefactors and show loyalty to them, you can gradually build up a rewarding variety of steady work for yourself. With this in mind, here are some suggestions for your consideration:

Do's
1) Keep a positive attitude and be open to the gigs available to you locally
2) Consistently be there for your steady gigs when they need you
3) Stay in regular touch with all of your local contacts
4) Be prepared, considerate, and punctual on EVERY gig (even the cheap ones)
5) Get to know your clients and be responsive to their needs
6) Do favors for people and express your gratitude for favors received

Don'ts
1) Don't sub out your gig every time you get a better paying offer
2) Don't leave town for extended periods (people will stop calling)
3) Don't cop the attitude that a gig is beneath you
4) Don't be stubborn; if a club owner or bandleader wants something different from you, try to accommodate him
5) Don't sacrifice a long-term, decent paying gig for a short-term, great paying gig

If you can maintain this kind of attitude, you won't lose many gigs. And as you hold on to your existing gigs, you will fill up the holes in your schedule with more steady work. This should all eventually add up to a decent and relatively stable income. I'm not suggesting that you should be a pushover or that you should never aspire to anything bigger, but if you can't maintain a great attitude on local gigs, don't expect to get offered any bigger opportunities. Use the challenges and frustrations of smaller gigs to develop your constructive, pro attitude.

By the way, I was recently interviewed for the very informative music business podcast Musicians Cooler. Please check it out for many great tips:

http://www.musicianscooler.com/

The Modern Renaissance Musician

New technological advances offer unprecedented power and opportunities to musicians. With affordable, powerful new software and global Internet access, anyone can effectively create and market music. But you must first be willing to master this technology in order to reap its full benefits.

I'm no different than most of you reading this blog: all I really want to do is sit around writing and playing songs all day. But when it came time to make my solo album, I immediately knew there would be a lot more to it than that. I could have hired a producer, engineer and recording studio to handle the whole recording process for me. I could have hired a graphic designer to design my album artwork, promotional materials and website for me. I could have hired a promoter to get airplay and sell the album for me, etc., etc. All of these things cost money, though...a LOT of money!

D.I.Y.

In order to make the kind of album I wanted to make and stay within a reasonable budget, I had to wear many of these hats myself. That meant setting up a home studio, buying and learning to use professional recording software, designing and maintaining a new website, and devoting time to promotional activities. It is a lot of work, but I have saved a fortune by doing these things myself, and picked up some valuable new skills in the process.

Perhaps you're intimidated at the prospect of using recording or web site design software? Often, you'll find that these things aren't quite as hard as they might seem. Also, remember that even if you hire a "pro" to do it for you, you might still not be satisfied with the result, but you're stuck with it. If you do the recording, designing, etc. yourself, then you can keep working at it until you achieve the desired result. As they say, if you want a job done right, do it yourself!

Having said all that, doing absolutely everything by yourself can be overwhelming, and there are some jobs that may be best left to experienced professionals. For example, I am of the old school opinion that nothing beats real, live experienced musicians (as opposed to loops or sequences) for backing tracks. Many also feel that the cost of hiring a professional photographer is money well spent. You might be able to barter or call in some favors from friends with the needed skills. But don't be too quick to delegate all of the work to others. Remember, your music is like your kids: nobody else will ever care about it as much as you do, so try to take personal responsibility for as much as you can handle. Good luck!

P.S. I just discovered another cost-cutting music fanatic like myself! Please check out Bob Baker's free e-book on money saving tips for musicians:

http://www.bob-baker.com/buzz/recession-proof-music.html

Time to Dream

Okay, most of my blog posts up to this point have essentially been exhortations to be disciplined and save money. Doesn't sound like much fun, does it? And what is the point of saving money anyway, when I could walk out the door and be hit by a bus tomorrow? Well, the point is to achieve my dreams, most of which will require money. And since I probably won't get hit by a bus tomorrow, some kind of plan seems in order.

So now I'm going to ask you to dream -- something that musicians are generally pretty good at! Dream about your future. What kind of lifestyle would you like to achieve, and by what age? Where would you like to live? Do you plan to get married, or put kids through college? How long do you expect to keep working? Some of these goals may not yet be clear to you, or may change as your life progresses, but try to picture your future as best you can. Estimate roughly how much money each goal might require (taking future inflation into consideration), and divide your goals into short-term, medium-term, and long-term categories.

It can be shocking to add up how much you will spend over a lifetime! It can also be pretty impressive to estimate how much money you will earn in a lifetime. If you're a musician, chances are good that the lifetime earnings estimate will appear lower than the lifetime expenses estimate! But you can make up the difference through investing, if you plan wisely.

Getting a handle on your future money needs will allow you to gauge how much you'll need to put away each month in order to achieve your short, medium and long-range goals. It will also help you to choose the appropriate mix of investments to meet your goals. Generally speaking, it is usually wise to choose lower-risk investments for shorter-term goals. For example, if you plan to buy a new car next year, you probably shouldn't put all of your savings for that car into highly volatile oil futures. If you did, there is a chance that you could double your money quickly, but there is just as good a chance that your money could suddenly evaporate right when you need it. One year definitely falls within the short-term time frame, and safe investments like Certificates of Deposit are usually best in such cases.

Musicians may have one advantage over the rest of the population in terms of investment goals. Many of us actually love our jobs, and don't necessarily want to retire young. The longer you keep working, the less ambitious you will have to be with your retirement savings goal. On the other hand, some musicians have their peak earning years when they are young, and may be somewhat less able to earn and save substantial money later in life, even if they decide to keep working. It can be difficult to predict your future money needs precisely, but you will certainly need some money! Try to estimate as realistically as you can, reevaluate your plans from time to time, and save accordingly so that you aren't caught shorthanded when those expenses arise.