Hi everyone and thanks for joining me for episode 7 of the Nate Zeisler show! Before we begin, I’d like to give a shoutout to Buzzsprout, the platform I use to create this podcast. If you’ve been thinking about launching your own podcast, now is the time to do it and I strongly encourage you to follow this link to get started. Doing so lets Buzzsprout know I sent you, gets you a $20 Amazon gift card if you sign up for a paid plan, and helps support our show. Get started today! Now, on to the question from Reily.
RILEY: Hi Nate, Riley Mulherkar here from the Westerlies. Thanks for taking my question. I know that one of the topics your covering is financial stability and what I’m wondering is how you define financial stability because I think so often in the arts we get so used to lifestyle and a culture of gigging and hustling for jobs, for health insurance, and we often don’t have access to the types of employment and opportunities that have to do with longer term planning and financial stability. So I’m wondering how you think of financial stability for artists in 2020?
NATE: Hi Riley, thanks so much for the question and a shout out to the Westerlies, an incredible ensemble based in New York City of which Reilly belongs! Check them out on Bandcamp, their newest album Wherein Lies the Good is absolutely stunning.
Riley, first and foremost, let me acknowledge that we are in what I hope is a once-in-a-lifetime moment in time and that many of us have seen our financial stability flipped upside down by this Pandemic. While we will be in this for some time, when it comes to financial stability, I apply the same rules now as when we in a roaring economy six months ago.
You can’t have financial stability without financial literacy, which is, for some reason, an incredibly taboo subject in this country. What I’ve found is that if you had parents who were fiscally responsible, they likely passed financial literacy onto their kids. If parents didn’t help their children attain financial literacy, it’s often up to the kids to develop those skills. I believe that financial literacy is a “one size fits all” process of helping individuals understand personal finance. While financial literacy is necessary, I believe that financial stability is the truest way to find balance in your life.
When it comes to the definition of financial stability, everyone is different. Due to this, I talk about financial stability in terms of a volume dial on the radio. The lower the volume the lower the financial risk tolerance. If your financial stability dial sits at 1 or 2, you are likely the person who is most comfortable in a full-time job with benefits because you know where the money is coming from. On the other hand, if your dial is at an 8 or 9, and you still feel financially stable, you might be willing to sacrifice things like health insurance and a steady paycheck in order to pursue more meaningful work. I like the dial analogy because everyone is different. Some will gladly sacrifice the steady paycheck to pursue their art, while others prefer to have the financial stability first and pursue their art in other ways. When I coach individuals, I help them define their own personal definition of financial stability. In order to help them think about where their dial should be turned, I distill financial stability into four basic questions:
- What can you control right now? Most often when I get questions about financial stability, it’s because the person I’m working with is in, or getting close to, crisis mode and they’re feeling trapped. Before you get into long-term financial planning, you need to work on getting your immediate needs taken care of. These immediate needs include having access to shelter, food, water and clothing. If one of these needs is not being taken care of, you must take quick action to meet these needs. That might mean you breaking your lease in order to move in with friends or a family member, deeply cutting all other expenses, and identifying ways to make some extra money.
- Where is your money coming from? So often, financial experts recommend that you simply save your way to financial stability. While that’s an important part of the equation, it’s equally important to identify and chart your sources of income. As artists, or anyone in the gig economy, for that matter, it is often feast or famine when it comes to income. Your goal is to identify work that balances out your income and provides stability. I think about types of work in three distinct areas:
- Traditional work requires your time on a specific, non-flexible schedule and provides financial stability and often benefits such as health insurance and retirement. From a financial stability perspective, traditional work is the most stable and has the least amount of risk. This is work in which you have a boss that has hired you as part of a larger organization or business. For performers or individuals pursuing work in the gig economy, this work likely provides the financial stability for you to pursue your art or other gigs when you’re not at your traditional job.
- Flexible work provides you with the flexibility to work on your own schedule with the stability that allows you to make ends meet.
- Expertise Driven Freelance jobs—Jobs accomplished without a set schedule and generally, on a contract basis. Jobs in this area include graphic design, private lesson instruction, or web development.
- On Demand Economy Jobs—New to our service economy, these jobs provide maximum flexibility for individuals to make money on their own time. Jobs include Uber, Doordash, Lyft, and AirBnB.
- Passion Driven Work and Entrepreneurship. This area is where artists and individuals in the gig economy often spend the majority of their time. There are two types jobs in this category:
- Service Driven Income—Work in which you can easily break down your earnings into an hourly rate. This includes being a performing artist, independent contractor or consultant and involves an hour of your time in person as a way to make money.
- Product Driven Income— Work which involves a lot of upfront time but can be converted into passive income if developed correctly. This includes writing a book, developing an online tool or even creating a method book for your students
- How important are factors such as long-term savings and health insurance to your overall comfort when it comes to financial stability? In other words, how much risk are you willing to take on as you pursue your art or life in the gig economy? If you look at the types of jobs above, area c., Passion driven work and entrepreneurship is often the most rewarding work but also comes with the highest risk. This is for a number of reasons, but in the context of your performance career Riley, you are sacrificing some stability to pursue the type of work that is most important to you. That means you have to hustle for health insurance because our healthcare system most often ties health insurance to your place of traditional employment. If you’re not pursuing traditional employment, it makes it that much more difficult to have that stability in your life. Due to the fact that your income is largely service driven, and we are in a time that you are not able to serve, it makes things particularly complicated for artists and members of the gig economy to achieve stability.
- How quickly would you like to attain financial stability? The x-factor when it comes to financial stability is how quickly would you like to stabilize. After you control your immediate needs of shelter, food, water, and clothing, your goal should be to build out as long of a financially stable runway as possible. If you seek immediate stability, that means you might have to pivot away from a career in performance or in the gig economy where things might not be back to normal for another 12-24 months. If you are playing the long game to financial stability, I would encourage you to come up with a 3-year plan that allows you to achieve the level of stability that is comfortable to you.
Riley, my advice to you and, really, to anyone who is involved in the performing arts or the gig economy is to develop a strategy for income in the following two areas:
- Using flexible work that is expertise driven, identify ways that you can make at least twice the established minimum wage in your community. For artists, the easiest way to accomplish this is to build an online private lesson studio. In the time of the pandemic, you can teach students from anywhere and there are many kids who want to continue to grow their acumen on their instrument. Launch your website and start teaching private lessons now.
- Identify product driven income that you can automate. So many of us in the workforce have hit the pause button, now is the time to start writing, podcasting, and exploring other ways to earn income. The more passive income you can generate over time, the more flexibility you will have to pursue your art in the long-run. I think this is often the place where artists and individuals in the gig economy are missing out on opportunities to earn income and ultimately develop financial stability. We equate an hour of our time to the amount of money that we’re making rather than thinking about ways to develop products and services that can be automated and ultimately generate income for us at all hours of the night. The goal and trick is to figure out what the needs of your community are and develop tools that will help them achieve the things they are trying to do in their lives. Can you solve a problem for somebody else that will ultimately help solve a problem for your own financial stability.
Thanks again for the question, Riley and I hope this provides a good foundation for how I think about financial stability. If you have a question about financial stability, work/life balance or finding meaning in your life and career, I’d love to help. All you need to do is record your question on your phone and send it to email@example.com and I’ll respond in a future episode.
Thanks for listening!