10 Steps Towards Financial Freedom for Classical Musicians
Financial freedom is a goal that many people aspire to, but few achieve. This doesn't mean though that you can't achieve it! For classical musicians, the challenge is even greater, as they face a highly competitive and uncertain market, low and irregular income, and high expenses. However, financial freedom is not impossible for classical musicians, if they are willing to adopt some strategies and habits that can help them achieve it. Here are 10 bullet points that can guide classical musicians towards financial freedom:
Define your financial goals and track your progress. Financial freedom means different things to different people, so you need to have a clear idea of what it means to you. Define what financial freedom looks like to you. Do you want to pay off your debts, save for retirement, buy a house, travel the world, or pursue a passion project? Whatever your goals are, you need to have a realistic plan to achieve them, and monitor your progress regularly.
Diversify your income sources. Relying on one income source, such as performing or teaching, can be risky and limiting. You should explore other ways to earn money from your music, such as composing, recording, licensing, streaming, crowdfunding, or selling merchandise. You can also look for opportunities outside of music, such as writing, consulting, or investing. The more income streams you have, the more financially secure and independent you will be.
Manage your expenses and debt. One of the biggest obstacles to financial freedom is spending more than you earn. I have created several Google spreadsheets which I keep on my phone and I track my daily spendings through it. My particular spreadsheets are Monthly food expenses, Monthly general budget and Tax File. Comment below if you'd like me to send my templates to you. You should try to reduce your expenses as much as possible, by living within your means, avoiding impulse purchases, and finding ways to save money on things like rent, utilities, food, or transportation.
Invest in yourself and your career. Financial freedom is not only about money, but also about personal growth and fulfilment. Always educate yourself on the financial and business side of being a musician. You should invest in yourself and your career, by continuing to learn new skills, expand your network, seek feedback, and improve your craft. You should also invest in your health, well-being, and happiness, by taking care of your physical, mental, and emotional needs, and finding a balance between work and life.
Create passive income. Passive income is money that you earn without active involvement, such as royalties, dividends, interest, or rental income. Passive income can provide you with a steady and consistent cash flow, without requiring much time or effort from you. You can create passive income by investing in assets that generate income, such as stocks, bonds, real estate, intellectual property or crypto. If you have a spare room that you never use in your flat, rent it out or list on AirBnb. You can also create passive income by creating digital products, such as eBooks, courses, podcasts, or apps, that you can sell online.
Build an emergency fund. An emergency fund is a savings account that you can use to cover unexpected expenses, such as medical bills, car repairs, or loss of income. Having an emergency fund can help you avoid going into debt, or dipping into your long-term savings, when faced with a financial crisis. You should aim to have at least three to six months’ worth of living expenses in your emergency fund, and keep it in a safe and accessible place. Remember that you don't need to build it right away. It can take months or years, but you will rest easy knowing that there's a fund which can get you out of trouble.
Plan for retirement. Retirement may seem far away, but it is never too early to start planning for it. And for most musicians I talked to retirement seems pure fantasy. Retirement can be a time of freedom and enjoyment, but only if you have enough money to support your lifestyle and needs. You should start saving for retirement as soon as possible, by taking advantage of tax-advantaged accounts in your country of residence and investing in a diversified portfolio that suits your risk tolerance and time horizon.
Educate yourself about money and finance. Financial literacy is the ability to understand and manage your money effectively. Financial literacy can help you make informed and confident decisions about your money, and avoid common pitfalls and mistakes. You should educate yourself about money and finance, by reading books, blogs, podcasts, or magazines, taking courses or workshops, or consulting with experts or mentors. You should also keep yourself updated on the latest trends and developments in the financial world, and how they may affect you and your goals. "The more you learn, the more you earn" - Rob Moore
Surround yourself with positive and supportive people. The people you associate with can have a significant impact on your financial success and happiness. You are the mean of the five people you hang out with most. You should surround yourself with positive and supportive people, who share your values and vision, inspire and motivate you, and offer you advice and feedback. You should also avoid negative and toxic people, who discourage and distract you, or take advantage of you. You can find positive and supportive people in your family, friends, colleagues, mentors, or online communities. Create your own group in your area which holds one another accountable of reaching their goals.
Enjoy the journey and celebrate your achievements. Financial freedom is not a destination, but a journey. You should enjoy the journey and celebrate your achievements, no matter how big or small. You should also be grateful for what you have, and appreciate the opportunities and challenges that come your way. You should also be flexible and adaptable, and willing to adjust your goals and plans as your circumstances and preferences change. Financial freedom is not only about money, but also about happiness and fulfilment.
If you'd like to talk about your particular situation and how you can achieve financial freedom as a classical musician, you can book a "Chat over a virtual coffee" me. Until 1st of January 2024 I am giving away this service for free. Just use the promo code POD at check out to benefit from this offer. Comment below if financial freedom is something you had one your mind for some time.