The path of a musician comes with a lot of financial risk and it can take years to build a foundation that allows them to truly feel like they are doing the work they are meant to do.
Musicians often avoid planning for financial risk because doing so might mean giving up the pursuit of what they love most, like creating beautiful things for the world to enjoy.
There are many ways to make more money to lower your financial risk, however, what is often missing from the discussion is how much financial risk tolerance musicians are willing to take on. For example:
- Some musicians need rock-solid financial stability to feel comfortable creating, so they spend more time working in a job with predictable hours and then create during their non-work time.
- Other musicians are comfortable taking on a relatively high amount of financial risk, so they are more in control of a flexible career. The trade-off is that they are often more dependent upon taking work in their area of creative expertise to make ends meet, which is not always artistically satisfying. In addition, this type of career trajectory can leave musicians exhausted and without predictable income.
Neither path is wrong, however, despite a pretty clear way of thinking about risk tolerance, I have seen countless musicians dive headfirst into their career with blind faith that it will all just work out. Without a plan for understanding how much financial risk you are comfortable taking on, it is easy to get stuck.
Here is how I help musicians think about financial stability.
Determine your financial risk tolerance
Musicians often associate their financial risk tolerance with the type of work they take on without thinking about the things they want most in life outside their profession.
When I coach musicians, there are generally four areas that play a role in their financial risk tolerance level. The chart below will help you think about financial risk tolerance and has been divided into four separate columns — family, location, material things, and debt. These represent the four most common areas of financial risk factors when I work with musicians.
Each column has a row that represents low, medium, and high levels of risk tolerance. The bottom of the chart represents the lowest financial risk tolerance, while the top of the chart represents the highest amount of financial risk tolerance.
Table #1: Levels of financial risk tolerance.
Here are two scenarios to help you think about where you might sit when it comes to risk tolerance:
- Scenario 1: You are a freelance musician who lives in a studio apartment in Brooklyn, NY by yourself. College was expensive and you continue to pay off your loans which total over $50,000. While you don’t have a family yet, you and your partner (an artist) have started discussing living your lives together and you believe marriage is in your future. Finally, you can’t live in Brooklyn without enjoying all the great food, seeing the latest shows, and enjoying the incredible exhibits at all the great museums around town.
Under this scenario, you would have a low financial risk tolerance. That means you have a combination of expenses and debt that likely force you to take on work that is regular and predictable so you can make ends meet. All signs point to this freelance artist needing some 9–5 work to stabilize.
- Scenario 2: You graduated from college and moved to Madison, WI with two of your friends to launch a new business. You don’t have any debt (thankfully) and because you have roommates, you are able to share a lot of your expenses. You don’t see a family coming into the equation for several years and you are content to live without material things for a period until you can stabilize financially.
With a lower cost of living and no debt, you would have high financial risk tolerance in this scenario. That means you can take more risks and, relatively speaking, wouldn’t need to make as much money each month to survive.
Your ability to pursue work that comes with a higher financial risk also needs to be considered in parallel with other factors in your life. Considering the four columns (family, location, material things, and debt) listed above will ultimately help you plan and understand the level of financial risk you are able/willing to take on.
Percussionists have an additional, built-in financial burden: the cost and need for instruments. You will likely need to buy new instruments for many of the gigs you take on, and you might be saving for a larger ticket item: marimba, timpani, etc. This is unique to your instrument and something to consider in tandem with the factors listed above: What instruments do you have? What others do you need to buy? And, how soon do you need them?
In addition to instrument purchases, your financial risk tolerance will likely need to be lower in a large city as there is less space to store your instruments in a small apartment, and limited opportunity for shared spaces. You can gain some financial stability by using instruments already owned by the school/organization/institution where you teach (where you may be able to borrow the gear) or is hosting you for the gig. If borrowing gear is not an option, consider collaborating with your friends and colleagues to rent a studio/storage space to share the gear you have.
Looking at this graphic, I want you to think about the following things:
- This is not a fixed equation — Think of the graphic as a way to get you close to the type of financial risk you are comfortable taking on. Just know that things like having a lot of debt, living in an expensive city, or owning a home all represent higher financial risk activities that need to be figured into your career plan. Only you can determine where you sit on the financial risk spectrum so use this graphic as a guide to plan strategically for your financial future.
- When in doubt, live the minimalist lifestyle — One of the best ways to lower your financial risk is to live a minimalist lifestyle. That means setting a low food budget, continuing to drive your grandmother’s sedan even though you could technically afford a new car, and having roommates. This will give you some financial flexibility while you figure things out.
- This is not forever, this is until you stabilize — Regardless of what you end up doing for your life and career, the one thing you have going for you is time. What represents high financial risk now becomes a lot less risky five years from now when you have paid off your debt, or you saved up enough money, so you have a safety net in place when you move to a more expensive city. Set a timeline now for when you plan to stabilize your finances so you have a goal for a time when you can potentially take some greater financial risks.Top of Form
Understand where your money is coming from.
Financial experts often recommend that you simply save your way to financial stability.
But saving is only part of the work.
Your career also depends on your ability to track your income.
As musicians, it is often feast or famine when it comes to income. If you don’t know where your money is coming from, you run the risk of adopting a scarcity mindset, which can lead you to take on work that is not in line with where you want to go.
In the process, you lose valuable time and run the risk of burnout.
While everyone is different when it comes to earning a living, the type of work you take on is essentially the same.
The most successful musicians I know, understand that their money comes from three distinct areas: Traditional Work, Flexible Work, and Passion-Driven Work/ Entrepreneurship.
Here’s a breakdown of all three:
Traditional work requires your time on a specific, non-flexible schedule, provides financial stability, and often offers benefits such as health insurance and retirement. Traditional work is the most stable and has the least amount of financial risk. This is work in which you have a boss that has hired you as part of a larger organization or business. For creatives or individuals pursuing work in the gig economy, this work likely provides the financial stability for you to pursue your creative work 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 you to make money on your own time without the risk of running your own business. Jobs include Uber, Doordash, Lyft, and Airbnb.
Passion-Driven Work and Entrepreneurship. This area is where creatives and individuals in the gig economy often want to spend the majority of their time. This work also comes with the highest amount of financial risk. There are two types of 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 that 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
Let’s put these types of income into action.
Case Study: Desmond is a 25-year-old artist living in Chicago. His dream is to perform full-time with his percussion ensemble and he’s giving himself five years to see if the group can make it happen. In the coming six months, Desmond only has one week of performances lined up for the group, which won’t sustain him in a city like Chicago. To make ends meet Desmond has taken a desk job at a local community music school and he teaches private lessons in his home. Check out the table below, which represents the income breakdown for each job in a side-by-side fashion.
Table #2: Income breakdown example.
If Desmond only looked at the TOTAL amount of money made in a month, he might simply take on more traditional work. However, when Desmond looks at the percentage of time spent on the job, it becomes very clear that the place for him to put his energy is in private teaching where he spends 19% of his time making 38% of his annual income.
Given all this information, my recommendation would be as follows:
- Pursue your passion and find opportunities for financial stability. If Desmond wants to make performing with a percussion ensemble his top priority, he should continue to do so, but not expect that his work with the group will bring financial stability in the near future. This is primarily because he doesn’t have control over when the group gets hired for work. The same rule applies when you dive into your creative work or launch a new venture. Too many things are beyond your control to predict if your passion income or entrepreneurship will support your lifestyle. My general rule of thumb is that creative or passion-driven income should not be considered financially stabilizing unless it consistently represents over 40% of your overall income. Even then, I would suggest that you have 3–6 months’ worth of income in the bank before you start to pull back on other areas of work.
- Set work priorities to find more time. Desmond needs maximum flexibility so he can say yes to any gig that comes up with the percussion ensemble. While the desk job at the community music school is predictable and regular, it also takes a lot of Desmond’s time during set hours, and at a lower rate than any of his other work. In this situation, the priority should be flexible income from teaching private lessons. If Desmond simply picked up six additional students as a private teacher, he would make more than he is currently making in his desk job and as a teacher combined. From a time perspective, that is a savings of 9 hours a week. Congrats Desmond, you just got your Fridays back!
- Control what you can control. Desmond can’t (necessarily) control the upward trajectory of the ensemble so he needs to build a safety net with the other two positions. Nobody can predict the future so it’s important for Desmond to find other ways to financially support his work. In many ways, pursuing a career as a creative follows the laws of attrition. Try to do everything you can to extend the time you need to gain a strong financial footing in order to continue to do the work over a long period of time. You can’t entirely control the launch of a performance career, but you can control the mix of traditional and flexible work you take on, affecting the time it takes for people to discover your creative work.
- 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. In the case of Desmond, he has a five-year goal to be financially stable enough to focus completely on his career on the percussion ensemble. In the immediate future, Desmond might have to pivot away from a career in performance towards something more stable. However, if he is playing the long game to financial stability, I would encourage him to come up with a 3-year plan that allows him to slowly decrease his traditional work as he picks up more flexible work and passion-driven work with the ensemble.
This is not a one-size-fits-all equation and no one financial breakdown works for everyone. However, when you create a side-by-side comparison of your income, your path to financial stability becomes incredibly clear.
How I help others gain financial stability:
Financial stability is often elusive for classical musicians, but not impossible to attain. Musicians are often faced with ongoing financial challenges, including the support of a family, house payments, and college loans. At the same time, many musicians I work with are also in pursuit of stability in their art, seeking higher quality and more artistically satisfying opportunities for performance.
The pursuit of stability brings up an interesting dichotomy: Search for a financially stable life and risk sacrificing your artistic output; Search for an artistically stable life, and you risk sacrificing financial stability.
Here is a three-step process for finding stability as an artist:
Step One: Take stock of your current situation–Here are three questions to answer:
- List all the work you have had in the last year and break it down into the following buckets:
* Work you love that is directly tied to your art.
* Work you love that is not tied to your art.
* Work tied to your art that you do to pay the bills.
* Work not tied to your art that you do to pay the bills.
- Assign the salary you made to each of the four buckets.
- Assign the number of hours you spent on each job.
Step Two: Create a personal strategy statement–One of the biggest challenges to upward mobility is that we often end up sacrificing artistic integrity to achieve financial success, or vice versa. Here are some questions that will help you create a strategy around your work:
- Based on your current situation, write down areas that you may want to develop in pursuit of upward mobility (Tip: Is there a way to capitalize more on the work you love?)
- Identify the areas that you may want to let go in the pursuit of higher financial and artistic gains? (Tip: Can you replace horrible gigs with work you love but is not directly tied to your art?)
- What, specific goals do you have regarding stability?
- What is your timeline for accomplishing these goals?
Step Three: Develop an action plan for upward mobility–This is perhaps the most important part of the process. If you don’t get something down on paper, you’ll likely end up spinning your wheels.
- Write down your personal strategy statement for accomplishing your goals.
- Set a timeline of 1–3 years to achieve your goals. (I’ve found that any longer than three years is too long)
- The main goal is to retain your artistic integrity while also making more money. Consider dismissing artistic work that is holding you back from your upward mobility and replacing it with work that is more satisfying but may not be directly related to your artistic output.
To help you, I’ve created this financial stability worksheet. The first page is filled in and annotated with a fictional character so you can see how it works. I left the second page blank so you can fill it in on your own.
While this is not an exhaustive approach to finding financial stability, my hope is that you are able to use the information in this article to start on the path towards gaining a financial footing or build upon the successes you have already found as a musician.
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