Money and its good management is critical for everyone. For most people with “normal” jobs – in manufacturing, IT companies, etc. – managing finances is a bit simpler as both their life and their income/spending follow a certain pattern. Music Industry professionals have some unique risks and challenges in financial planning – different than even other types of artists.
Very specialised profession
An artist, for example an actor can get versatile roles. He can do drama, films, advertisements, brand endorsements and many other activities for generating income. Although a musician belongs to the same art fraternity, he has a very specialised role. The reason I say very specialised is that a musician for example, a singer gets work not just based on a good voice but also due to a specific genre like Pop, Classical etc. Very few signers will get projects across genres. This increases the risk in terms of capacity to earn.
Limited peak creative years
Every musician – music director, singer etc. will have a limited number of creative years when he is at the peak of his career. He will get the best projects and the maximum income during that period which may be between 5 to 15 years. The income earned during this period should last a lifetime.
Artists also have to take into account the fact that their emotional life, hit and ‘flop’ projects etc. also affect their work and hence their potential for income. Also, they have blank periods where they are not able to perform at all or at their best. Hence, we need to take into account these “breaks” while working out the financial plan.
Jet setting lifestyle
Musicians are the trendsetters in society. They move around amongst the elite of the country and the world. They need to maintain a certain lifestyle be it clothing or cars. This lifestyle is an integral part of their profession and we should call this an investment rather than an expenditure. However even the spending on this lifestyle needs to be planned properly so that the money is available when needed and you get the maximum savings when you spend the money which may include a possible brand endorsement/barter against a car/property purchase.
Odd work hours and schedules
What makes the financial planning for musicians the most challenging is their hectic schedules, odd working hours, deadlines etc. This is the primary reason why Financial Planners fail to work out a good quality financial plan for them.
Regular monitoring of finances
A financial plan can help you build wealth only if you can monitor whether the goals are being achieved and make necessary corrections on the go. The income and spending patterns of a musician will keep changing over the years and even within the year. These need to be updated in the plan so that we set realistic goals and achieve the desired results.
The author, Vinit Vyankatesh Deo is a Chartered Accountant and CMD of Posiview Consulting Partners Pvt Ltd. He can be reached at firstname.lastname@example.org and at https://www.facebook.com/vinit.deo.9
Get to know the current share prices of Music companies at http://www.musicplus.in/money-tunes/