Do you struggle with your finances as a creative? What about pricing your products? Do you have a system for managing your money?
In this episode of The New Music Industry Podcast, I share a chapter from my upcoming book titled “Finances.” I also share the Tony Robbins method I used to handle my money.
- 00:14 – Another episode on my upcoming book, Flashes of Elation
- 00:27 – What “Flashes of Elation” means
- 00:46 – Pre-orders
- 01:04 – The book is a work in progress
- 01:14 – Today’s topic, finances
- 01:19 – The “three taboos” and pricing creative services
- 03:15 – Firing your worst clients
- 03:39 – Going into debt
- 04:54 – Being selfless
- 05:22 – Making a living and getting money handled
- 05:43 – The three buckets of savings
- 06:33 – Paying attention to your finances
Hey. I’m back with another episode on the upcoming book, Flashes of Elation.
“Flashes of Elation” describes what creatives often feel. I know a lot of creatives that have major ups and downs in their lives. But when they feel happy, they feel ecstatic. And when they feel down, they feel downright depressed. And that’s what that terms describes.
If you’d like to claim the pre-order bonuses that come along with this book, then you’ll want to go to the pre-order page before June 30, 2017, when pre-orders officially close.
And just so you know, what I’m about to share with you isn’t necessarily in its finished form. I’m still working on the book. But it will give you a good idea of the content that is within.
And today’s topic is finances, so let’s take a look.
How do you feel when you hear the word, “money”?
Supposedly, the “three taboos” in conversation are politics, sex, and religion. But don’t you feel like money also belongs on that list, at least in North America?
What’s your response when it comes time to negotiate salary in a job interview?
What do you tell your future client when they ask you how much that website is going to cost them?
Do you answer promptly and confidently, or do you balk and start talking in circles? Do you ask for less, or come up with some kind of friendly discount and justify it later?
How about when someone asks what you do for a “living”? It’s a loaded question, and you know you’re being sized up.
When you observe the way us creatives price our products and services, it’s usually in a very timid, apologetic way. Our attitude is, “we don’t know what we’re worth, so you tell us”.
But people put more value on what they buy than what they get for free. Give an eBook away, and nobody will read it. Sell an eBook for $7, and that thing still might not get read. Sell it for $57, and people have to take it seriously (there will always be a percentage of people that still don’t read it though). Ironically, they’ll get more value out the eBook too, even if the information in the $7 eBook and the $57 eBook are exactly the same. Imagine that.
“Oh, but no one would buy my thing for $57.”
Have you ever tried? How do you know for sure that you can’t sell your thing for $57 (and if $57 sounds like chump change to you, let’s say $597)? How do you know you wouldn’t make more money, earn more sales, and attract better quality customers? You probably would, because people would value your work more.
There may very well be a threshold for how much you can charge for your work, but that ceiling is much, much higher than most of us even know.
I find it interesting that the first tip in Michael Port’s book, Book Yourself Solid, is to fire the clients that are causing you the most stress. Tim Ferriss makes a similar suggestion in The 4-Hour Workweek. It’s not about the money you lose as much as it is about the freedom and joy you gain back.
As sensitive creative people, we put up with far more and ask for far less than a person ever should.As artists, we tend to put up with more and ask for less than we should. Click To Tweet
I’ve gone into debt twice during my adult life. I’m not talking a miniscule amount of credit debt either – I was in serious trouble. Let’s just say the banks and the collection agencies knew what my number was.
But it was those experiences that taught me what to do and what not to do with my money. Whatever lesson I failed to learn the first time around, I sure as hell learned the second time around. I was tired of making the same mistakes, and I didn’t want to make them anymore.
I’ve talked about the fact that I was in network marketing companies for a while. I remember when one of my “mentors” sent me a message concerning a financial decision. This was smack dab in the middle of me going broke for the second time. I distinctly remember responding with something along the lines of, “I’m happy to invest in my business, but from now on I’m going to do it safely, and I’m going to pay myself first. I’m not going to put my future and security at risk to buy product I don’t need.” I might as well have said “F*** you”, because that’s probably what they heard.
Everything changed in that moment. Subconsciously, I think I knew that my so-called mentor wasn’t that concerned with my future. They just wanted me to put money I didn’t have into products I couldn’t afford to help them fund their dream. What about my dream?
The world tells us to be selfless, to be giving and generous, and to relinquish our resources and energies for the “greater good”. And I say you have to be selective about where you put your time, resources and energy, especially as a creative, because you don’t get a second go at this. Life is too short to waste on manipulative, self-interested human beings.
Did I warn you of that fact that money is a charged topic? If not, I should have.
If it was not important to you, you would not wake up to an alarm clock, shower, and risk your life on the road to rush into your job every morning. On that point, I can agree with my former mentors.
So you need to get money handled, and I don’t believe you need to be aggressive, pushy, or devious to make the kind of money you want and live the kind of life you want. What you need is a process.
A few years ago, I caught a video on YouTube in which Tony Robbins describes the “three buckets” to put your money into. To this day, my financial life is anchored by this concept. The three buckets are:
- Emergency fund. Robbins suggests six to nine months’ worth of expenses in your emergency fund.
- Dream fund. People tend to defer their dream vacations, cars, boats, homes, and other experiences they could be enjoying. But Robbins suggests putting your dream fund towards things you want to do now. Tomorrow is uncertain, so start doing the things you want to do today.
- Aggressive growth fund. Once you’ve built an emergency fund, you can use your aggressive growth fund for high-risk, high-return investments. That way, even if you end up losing money in your investments, you’ll have something to fall back on.
One final note about finances: you need to pay attention to them, because what you focus on expands. I know a lot of people that don’t like paying attention to their financial reserves. Is it any wonder why they don’t have any money?Pay attention to your finances - what you focus on grows. Click To Tweet
It doesn’t need to be hard. Opt to print out a receipt whenever you deposit or withdraw money at the bank. Log in to online banking and move small amounts of money into the three buckets on a weekly basis. Check your balance before going to eat out. Do the little things.
Crack the code on the music business. Get THE MUSIC ENTREPRENEUR CODE book.