One of the questions I get asked most at Filmmaking Lifestyle is about wealth, money and filmmaking finance. Lots of people ask how I maintain my lifestyle and a question that often comes up is filmmaker finances. This article will give you solid tips on how you can best deal with money, maximize the money you earn and overall how to be richer.
The goal here is to be a richer person this time next year.
Filmmaking Finance: Why Getting Financially Free Is So Important
Freedom is something that can’t be taken for granted. In fact, it’s your destiny. Something that people really don’t talk about is videographer or filmmaker finances. Money is one thing, but being financially free is where it’s at. Here are two very important questions to ask yourself when considering filmmaking finance:
- Why do you want to be wealthy?
- What does being wealthy mean to you?
Notice I didn’t say “rich,” I said wealthy. Being wealthy means lots of things to lots of different people. It’s an inherently subjective state. You can be rich because you have lots of money. You can rich because you have lots of property. Equally, you can be rich because you have fantastic people in your life.
You can also be rich in time. That’s where freedom comes into things. The man who has total control over his time is rich. That’s real freedom.
Money’s not everything, but it sure is important.
Here are some things that getting financially free will enable you to do:
- Make career decisions because you want to, not because you need to because of money. That means being able to work on film projects that you want to. It also means being able to be in a position to take time off to work on passion projects that might not pay much (of any) money.
- Help your family or help your parents in their retirement, so they don’t have to work if they don’t want to.
- Spend lots of money on the things you love, whilst being extremely frugal about the things you don’t.
- Start passing on your wealth (however you define it) by giving back to those around you. That’s real freedom.
Money’s Not Everything, But It Sure Does Help!
So we now know that being wealthy (or rich) isn’t just about money. Here are a few things you should know about Money:
– Most people in our lives have strong opinions about money, but they don’t have a clue how to manage their own.
– Spending money can be fun, as long as it’s concious, directed and purposeful. At least most of the time.
– You should enjoy your money. It isn’t just made for being shuttered away someplace where no one can even get a whiff of it. Although some of the richest men in the world (like investor extraordinaire, Warren Buffet) have billions locked away in various stock assets.
In fact, Buffet is an an anomoly in the world of billionaires and he represents something very counter intuitive to what most people would expect a billionaire would be like. For instance, he still lives in the same house he has owned for decades, drives a very affordable car and lives life extremely frugally.
Strangely, most people he meets in everyday life wouldn’t have a clue that he’s one of the richest men in the world with assets in the billions! But he lives life on his terms.
– A rich life goes beyond just yours. It may start with you getting wealth, but this is all about passing things on, remember? A rich life is about more than money. It starts by managing your own, but it continues by helping others become rich.
The Slow Lane Or the Fast Lane?
There are many ways to become financially prosperous:
The Job Path
You can ascend a career ladder. That is, get very good at your job and keep getting promoted. Maybe this means you’re working for a Hollywood studio or an independent film company in New York. Or maybe you’re reading this from your desk at a non-film job and you have aspirations of getting to one of those aforementioned positions.
The Business Path
You can start your own business and make money on your own terms. As we’ll discuss later, this is something that I highly recommend. As I’ve mentioned in the past, I own a video production business and it’s my main source of income.
The Investing Path
This can come in many shapes and sizes. The central idea is that you’re putting money into something in order to allow your money to grow. You can invest in stocks, in property, even in antiques. In fact, a close friend of mone does very well for himself by investing in classic cars.
All of the above paths are useful and viable. A route to financial success will most likely feature any combination of all three of these.
One of the most efficient ways to grow your wealth is to invest in the stock market. I know, I know. You’ve heard about that one, and it doesn’t end well, right?
Well, the stock market is actually a lot safer than you might think. I invite you to do your own research rather than taking my word for it, but the market has steadily grown over the decades, despite taking numerous donwturns over the years, the most recent of which was the 2008-09 financial crisis. I’m sure you heard about that one.
Just know that the overall average of the market has risen over the years despite the periodic downturns. If you’re in it for the long haul, then you’re dandy.
1. Investing in an index fund. This has been discussed by top investors like John Bogle, and is outside the scope of this program.
2. Research your investments. Tools like Etrade are great for this.
3. Continue to stick with your index fund as a long term investment strategy.
How The Skilled Filmmaker Uses Their Money
Freedom. There’s that word again.
Everything we’ve discussed here is an effort to get you to have more freedom. Freedom with money. Freedom from the bank. Freedom from the tax man. Freedom from debt. Freedom to do what you choose in your life.
Here are some practical ways you can use money to better yourself and improve your life.
– Avoid any kind of spending sprees, even if you don’t think they’re reckless!
– Stop spending tonnes of your money on damaging vices like drinking, drugs, gambing, etc.
– Debt can be one of the most damaging of all vices in your life, because it slowly but surely eats away at your freedom. Setup your Credit Cards to benefit you (if you have them.)
– Get a full credit report and find out where you’re at (myFICO)
– Call up your credit card company and ensure it’s a ‘no fee card.’
– Ensure you have an automatic payment setup, so that your card balance is paid off in final every month.
– If you have debt…pay it off as quickly as possible. Start with the debts with the highest interest first, tackle those first and then move onto the smaller ones.
– Setup your bank accounts and make sure you have no-fee accounts where possible. Always call up and query any chargers that look suspect. It’ll help to have dates and times to hand when you call up. The person armed with this info has power and authority, and the receiver of your call is more likely to bow to your better judgement.
– Start an investment account. More info on a recommended investment strategy that I endorse can be found at Bogleheads.
– Work out exactly what your income and expenditure is. Spreadsheets are great for this. Yes, it might be painful, but this step is very important.
– Automate your entire financial infrastructure so that everything works together like a well oiled machine. This means ensuring that you have automated payments going out for all your bills, etc.
Filmmaking Finance – Wrapping Up
With that said, here are some Action Steps that you can take starting today that you enable you to be a more wealthy person this time next year:
Action #1 – Sort out your finances once and for all. taking the advice in this section, take time now to give your financial situation an oil change and ensure it’s running in top shake and efficiency.
This means working out methods to eliminate your debt and, most likely, cutting up those darn credit cards! Just think how much money you’ll save for film projects you have your mind set on!
Action #2 – Start saving towards something cool today. Open up a savings account. It should be a separate pool of money aside your main savings account. You can even do this online and set part of your monthly income to be channeled through to this savings account.
Ideas to save up for? What appeals to you? What do you really want? If you could have anything in the world what would it be? This is a really cool way of goalsetting as you actually see real, measurable progress towards your goal every month!
Action #3 – Join a club/community/group. It could be anything – the gym, a local sports team, a cinema club, a convenient of witches or a feminist literary society! It’s entirely up to you. But get yourself around like minded people that share your interests and passions.
Action #4 – What turns you on? What’s your real passion in life? Are you doing enough of it? Decide what you should be doing more of in your life and do it!
I hope this helped you reconsider your financial situation and start making important steps towards changing it for the better. Thanks for reading and please drop a comment below!