Saturday, July 16, 2011
Top 8 Financial Tips for Writers
1) Embrace Your Inner Skinflint. Just because your wallet’s fat, that doesn’t mean it’s time to live like Diddy. Screenwriting careers can be notoriously short-lived. At some point, the gravy train will derail. The high life is great for Miller beer, not you. Now is not the time to buy that mansion in Pacific Palisades. Stay cheap!
2) How Many Reps? If you have both an agent and a manager, God bless you. But each one of them Hoovers away 10%. Do you really need both? Maybe, if they’re both amazing and functioning as a team. But what if your manager is doing all the work and your agent doesn’t do jack? A manager and an attorney (at 10% and 5% respectively) might be the move.
3) Pay Yourself First. It’s easy to forget to spirit away a chunk for yourself when you’re loaded down with debt. Instead: lop 10% off the top (or more if you can) whenever you get a check and tuck it in an IRA, a CD or whatever your favorite investment is. You may only be earning a percent or two, but the main thing is you’re slowly building wealth. Even if it’s only 20 bucks – do it.
4) Diversify and Conquer. Learn the basics of investing (or find a trusted financial advisor to handle that stuff) and then make like the big boys and have multiple types of investments. Maybe you’ll own some stocks, some mutual funds, shares in non-US companies, maybe even physical gold or silver. This will prevent you from taking too big a hit if any one market or sector, or the entire economy, tanks.
5) Build a Secondary (non-industry) Revenue Stream. There’s a reason every actor in town owns a restaurant. Consider investing in or starting a business that has nothing to do with the movies. Love baseball cards, crocheting, line dancing, cheese-making? Then start a business involving one of your other passions. If your career ever goes down in flames, you’ll be glad you did.
6) Get an Accountant Who Knows the Biz. Here in Los Angeles, there are quite a few terrific accountants who not only know their tax law but all about how it applies to writers. Your family accountant in Terre Haute just ain’t gonna cut it. Your accountant becomes your partner in many ways and may even prevent you from making bad financial decisions. Best of all, they generally work for a flat fee, and will often dispense advice at no additional charge.
7) Get an Income Property. Real estate may not be the surefire investment it once was, but mortgages right now are dirt-cheap. Consider buying an income property such as an apartment building. For example, in a 4-unit building, the rents should cover the monthly costs and make you a little profit on the top. You might even be able to live in one of the units!
8) Never Pay Retail or Sales Tax! Ah, the wonder of eBay, Craigslist, the Recycler, Amazon marketplace… Why drive to the local Target and pay top-dollar plus the usurious 9.75% Los Angeles sales tax? Order online and save a bundle. You’ll often be able to find the exact same item brand new for less, with either free or cheap shipping, or even better, slightly used at deep discount.
It’s all about being having financial foresight and being frugal. Remember that the industry does not care about you. You are chattel to be utilized and then discarded. So even though right now you might be on top of the world and rolling in six-figure paychecks, two years from now you could be desperate and unemployed. Many writers have found themselves burnt by the system, left stunned, despondent and broke! Don’t be one of them. Follow these tips and shore up your financial empire. Good luck!
Posted by Admin at 3:30 PM