Working in the entertainment industry can pose some unique challenges when it comes to managing your finances and investments. Many entertainment professionals have incomes that fluctuate dramatically month to month¬—it’s likely that your nine-to-five “non-industry” friends don’t understand how you live with such uncertainties. With a fluctuating income, on top of a calendar packed with attending industry events and going out for networking drinks, it’s no surprise that entertainment professionals are seldom able to find the time to manage their personal investments.
Below are three easy steps you can take to help improve your financial situation.
Step 1: Get a plan in place.
A surefire way to improve your situation is by creating a monthly budget. This is a practice everyone should abide by, but it is an absolute MUST for those who have fluctuating incomes. As many expenses are recurring or constant, the amount of money you spend every month should not be determined by the amount of money that comes in every month.
Those who spend more when they receive larger paychecks are putting themselves in a position to never be able to save anything, stuck constantly waiting for the next check to come in. The monthly budget you create for yourself should allow you to save a MINIMUM of 10% at the beginning of every month. What’s left after that, is what you use to pay for everything else.
Step 2: Build your emergency cushion.
It’s long been a rule of thumb that you should want to have a three to six month cushion of your total monthly expenses saved up in your bank account at all times. For example if it costs $5,000 to pay for ALL your monthly expenses (i.e. rent/mortgage, car expenses, food and drinks, entertainment, etc.), you should have $15,000 - $30,000 saved up in your bank account. Once you have your cushion built up, it’s important to ask: “what’s next?”
Step 3: Put your team in place and invest.
Congratulations, you’ve checked off some major boxes. You have created a budget for yourself that allows you save every month, alongside building up your emergency fund. Now, it’s time to get your money working FOR you. Let’s face the facts: leaving your assets in the bank and trying to grow them by earning between 0.01% - 1% is a very, very difficult thing to do.
This is when you need to hire a financial advisor and get your financial team in place. How important is it to have a financial advisor? Last time I checked, no one has ever won an Oscar for ‘Best Picture’ by doing everything on their own. All ‘Best Picture’ winning films have had an amazing team of people in place from the director, the editors, to hair and makeup professionals, to the actors themselves. The same principle applies when working to achieve your financial goals. Give Gerber Kawasaki a call, where our goal is to help you produce an award-worthy financial plan!
By Elijah Souza
Registered Investment Advisor
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which course of action may be appropriate for you, consult your financial advisor. Investing involves risk including loss of principal. No strategy assures success or protects against loss.
Gerber Kawasaki, 2716 Ocean Park Blvd. #2022 Santa Monica, CA 90405. Contact us at (310) 441-9393.