Episode 28
Ways for Musicians to Start Investing
“Someone is sitting in the shade of a tree today because someone planted a tree a long time ago.” -Warren Buffett There is one thing most older people say about their investments is that they wish they had started sooner. And that’s what we focus on today, giving everyone here access and an introduction into some very simple options to get your investment funding started.
0:00:01.7 S1: Welcome to the show that explores the methods and strategies on loan the financial side of your music business with over 40 years combined experience. Here are your host, Chris Webb and Dave tank. Welcome to your musicians tiptoe. We talk about musicians and money. Today, we will introduce the atonal ensemble of robo advisor and robo investor all for your financial entertainment. I'm your host, Chris web, joined by my co-host and the man best known for his robot dance moves, Dan taming. Thanks.
0:00:35.9 S2: Chris, thanks for having me. I appreciate it very much. Everybody check out these moves, check that out with... Look at that. Oh yeah. Okay, great moves. Very impressive. Thank you, I'm corner investing.
0:00:52.4 S1: Might as well talk about Warren Buffett. He says, Someone is sitting in the shade of a tree today, because someone planted a tree a long time ago, there's one thing most older people say about their investments is that they wish that they had started sooner. And that's what we focus on today, giving everyone here access and an introduction into some some very simple options to get your investment funding started, and just like those helpful AI drummers in your dad to get you started in racist IC breakthrough. AI investing can break through that huge wall of getting started in your retirement funding, we are going to discuss investing in yourself and the marketplace right after this.
0:01:36.8 S2: Live string to 30 plus platforms simultaneously expand your reach and boost your views with the number one live streaming solution in the world, re-stream, millions of people around the world use re-stream to reach, engage and monetize their audiences. Their customers include professional and amateur gamers, Fortune 500 companies, media, politicians, celebrities and definitely musicians, stream keeps nurturing the product portfolio to empower content creators to reach wider audiences and brains to spread their messages throughout a massive network of streamers. They offer multi-streaming to reach a wider audience, scheduler to automate your recorded videos live and show your day one of your streams go off without a hitch, engage viewers in a multi-chat, forget about TAP switching from multiple platforms, and you can't aim for success if you can't see your target, measure your success and get insights on your live stream across all 30 plus platforms on a single screen with musicians tar dot com deals to grab your seven-day free pro trial today. Welcome back, everybody. This week's non-profit is swallow Hill music out of Denver, founded in 1979. It began as an outgrowth of the Denver folklore center, a music store, Denver swallow Hill neighborhood that offered music lessons and performances to the community in the 1960s and 1970s.
0:02:58.2 S2: So all Hill is a community for individuals and families who wanna learn about listen to and perform music, they host exceptional musical experiences featuring world class artists who enrich the local art scene and range from noteworthy local performers to see some national and international acts. The Music School welcome students into an exclusive community where they make social connections through music, with more than 200000 musical connections made each year. Swallow Hill is building a dynamic and innovative community of music listeners and learners, I have the fortunate opportunity next week to be teaching there for their songwriting program every morning, so check them out at swallow Hill Music dot org.
0:03:38.6 S1: And make sure you rate and subscribe to this podcast leave us to comment, go to our website and check out all these resources and discounts that we've collected for you, and while you're there, sign up for our weekly newsletter, it's free, and we'll connect you to other related articles and keep you up on all these new opportunities in your music business. Yes, it's true. We will all get old. At least the lucky ones. Right. Just look at magar and simply read. We
0:04:08.4 S2: Simply read, I just...
0:04:10.6 S1: I think of him and my child that is being... That artists that I was like, Well, what happened to that? Did and his old...
0:04:18.5 S2: I was watching the documentary for Woodstock 99, and they had Dave Mustang interview... They couldn't believe it was Dave was thing. I just have him forever young in my brain.
0:04:32.0 S1: You will eventually want to stop having to play house concerts in Kansas City to keep your summer two or numbers in the green, whatever it is that is sustaining you to be an artist will eventually change. And time will come when you won't want to have to work, giving a little bit of thought on this can go a very long way in the sooner, the better. So let's talk basic investing into a future free of mystery and scarcity. First, we're gonna start with investing in yourself, now, this might sound like this isn't about finance, but it truly matters if you invest in yourself well or not, and we're just gonna brush over a couple of the very basic intro ones, we've talked about some of these previous podcasts at some capacity or another, but it's a good reminder that the most financial reward you're gonna get, it starts with investing in yourself first, please try to accumulate professional gear, don't buy the cheap stuff, because you will only get it to last for is about as much as you paid for it, it doesn't mean going to a bunch of dead, I'm not saying that, and I'm not really talking about how to afford it at this point, I'm just trying to make you realize that you pay for what you get and you will be a better artist for having better gear.
0:05:50.8 S2: I believe we have 27 episodes on how to afford it.
0:05:55.8 S1: It's true. To say it again, so make sure that you're really thinking about what software and what gear might really improve your ability to be successful... Pay off any debts. We've said that one, 100 times self-fund your next album, don't go into debt, he calls the opposite direction of the financially free artist, another way to invest in yourself is by getting a videographer, making some content that people will watch over and over again on the Internet, spending a little extra, I'm making that a high quality... So it becomes an asset. Same with photography.
0:06:32.5 S2: You bring up spending a little extra, I want... And it's funny, you brought up the Warren Buffett quote for this. Have you seen the Warren Buffett documentary in...
0:06:39.9 S1: Oh my God, now, but I'm going to watch it. The moment. A sense.
0:06:43.5 S2: Okay, well, all I need you to do first is fast forward through the opening scene, because he talks about how much change, you know... Yes, his wife, when he goes to work in the morning, like three numbers, like dollar 89, 275 or 320, and whatever she picks, that's what happy mean all or breakfast meal he gets at McDonald's. So I just need you to fast forward through that part and then hunker down because talk about investing, he's talking to a bunch of students and he says, Now let's imagine that I was gonna give everyone in this room a car right now... And the catch is, this is the only car you get for the rest of your life, you're gonna treat it differently than if you had options to get other cars, you're gonna take care of it. And when you're talking about investing, he says the number one thing you have that you only get one of is your body and your brain, and to invest in that because everything that we talk about as far as money is concerned. Is not that important if the machine doesn't work, so when we are talking about investing and something that I probably took way too long in life to learn, to eat healthy, getting enough sleep, start to meditate, probably don't consume too much in excess of anything.
0:08:08.1 S2: So I think that's an important part of this too, is invest in yourself and your brain and your body take care of yourself, you know
0:08:15.5 S1: It's funny 'cause I just re-signed up for the gym, I canceled that on covid hit, but today I just paid for a year's membership today, like two hours ago, so I'm feeling real good about that one day, did you buy any denim over the pandemic.
0:08:31.1 S2: 'cause you're gonna have to get... You're gonna have to upgrade, you're gonna swell up a little bit.
0:08:35.9 S1: The shirts are gonna get tight, Chris, it's gonna hold right through those to slaves of my dental... Well, let's move on. We've talked a little bit about how you invest in yourself, and that is a very important part, and it's something that you could also do by learning new skills, by the way, if you're gonna take lessons about learning a new style of music, but just make sure that it's gonna pertain to the ways that you're gonna be able to get the financial reward for it. Let's talk a little bit about the stock market, and these again are just overview so that you feel like if you haven't done anything yet, this is something you could do to get started right away, and if this is investing in the stock market is something you've been doing for a long time. Congratulations, I'm super happy about that. But maybe this will give you a few extra Ways to try something new.
0:09:23.1 S2: I'd like to start out with the acorns app. I had no idea about investing, all I kept hearing was, Make money work for you, compound interest. And when I got the ad for a core come around somewhere, I don't know, when I was doing marketing for some financial company, it was an easy way for hands-off investing, and what it does is that you connect your debit card, and every time you make a purchase it rounds up to the nearest dollar and places that an investment account that you can pick for investing conservatively or aggressively, and it gives you a whole bunch of different options, so not knowing anything about investing, I think Acorns is a pretty cool thing to look into, because you don't have to do much as far as know much about the stock market, and you can start to see compound interest happening and from there, you could start to say, Hey, well, maybe I wanna put 50 bucks in a month and have that go into that account, and that's a great way to help you save to... It also introduced me to retirement for Roth, RA and Spira, and something I had knew nothing about.
0:10:43.4 S2: So it's a good option there. And if you don't know about those things, you can go to your bank and ask them and then take their advice and go to a core, they go there, especially when it happens automatically, it's something you don't have to think about, so if something is already putting something into a retirement account for you that you don't have to think about. I think it's better than having to make that choice every month, like I'm putting this money towards that, it's just automatically happening another awesome action with the acorns that you and I... A long time go. Start talking about budgeting. And with acorns, they can give you your own card where it's kind of like a separate debit card, but I'm able to budget whatever I want for my acorns card, and that's still... I put money into that card for whatever I have allocated for that budget, and it also rounds up and takes that into an investment account, so I use that and I just... I have it to replenish at the end of every month, and I know once I hit my limit, that's my limit, and if I have extra...
0:11:52.7 S2: That's awesome. Just gray, I thought of this or I don't have kids, but I have nephews and nieces. And I'm sure there's someone on this bad gas that has kids, two of them, it also allows you to invest early for kids as soon as they're born, and they have a social security number where you can just take small acorns, quarters dollars and what an... And I do is we put an account for nephews and nieces, and maybe instead of getting them toys every holiday or birthday, we can put it into that account and start getting them ready for whatever they have planned for their future when they turn 21. And if you think of that, and I think even right now at 50 bucks a month, it turns into something over 20, 30000 depending on the investment for 20 years. For that small of amount, I know you and I will probably talk a little bit later about different amounts in different accounts, but so as musicians performers, songwriters, we can create accounts like these from extra earnings, so the money starts working for us now rather than working for the money, later in life.
0:13:04.7 S1: What we were talking about the other day, I love this idea that one of the new things I do is you have a QR code everywhere when you're playing to show, and so for people playing music all that... I'm sure a lot of you are already using QR codes to get Venmo tips. And it's such a great way that if you don't depend on your tips, so I guess it depends on the type of show, but most of my show is the tips are the gravy, and to take that Venmo money and it never hits me, it goes straight from the Venmo tips to an investment, and it's sort of like... It's extra amount that I'm not even thinking about, that will go straight into an investment.
0:13:41.9 S2: That acorns app also allows you to know if you're buying anything online such as Apple products or go on Groupon over eats, which I mean, get off your ass and go get it yourself, but percentages of those purchases also help you invest to... So if you're going to buy those things anyway, check out all the different vendors they have on their app and... Every little bit helps. It works as Leo referral program or an affiliate program, which we've talked about in the past. We do have an acorns affiliate program for musicians sitar to, and we give a percentage as you sign up, so it comes from us 510, and we also get 5 or 10 when you sign up, so it helps us keep going here and puts a little bit money in your pocket to... And you can try it out for yourself. Stasis, another app that is also like this, also like acorns, but it's more for investors who want deleting individual investments and... And I diversify in a way where I use a corns and because she's much smarter than me, she uses dash, so it has different in individual brokerage accounts, but it's not individual stocks, it's still fun, it's still funds, but you can pick individual stocks as well on stash.
0:15:08.7 S2: So it gives it's for new investors wanting to learn more about it, and on same has online debit accounts and custodial accounts, but I think the best is the automatic reinvestment and also the dividends that comes back, they reinvest that into your account as well. It has a pretty cool retirement calculator on it to which acorns does have, but I kinda like states a little bit better, and then there's some other ones out there to betterment Robin Hood crime, so suggest you're looking to them, see what works best for you, but definitely something for the beginner investor, just to put some change way to start investing for your future.
0:15:51.3 S1: And hopefully one of those, just at least for those who haven't started yet, gives you that push to do something and to see how it works and to feel some sort of momentum towards the whole thing, and that might lead towards putting a little more energy to it, maybe a little more interest in learning about it, because I know for myself it was super overwhelmed in the first time I started trying to learn anything about it, and I use with glaze over all this information and all these different types of investments, and then all the lingo that they use within the psycho world, and I think a lot of people feel that we went enter into playing with a wedding band, for example, and all these signs and all this different lingo and the way that everything functions, it's very intimidating and it's similar, it's that, but once you kinda get used to it, then you can rack the set, you know a man and keep taking those gigs and keep investing bigger and smarter and be more confident with what you're doing.
0:16:50.6 S2: In the beginning, you mentioned investing in yourself by learning new skill set, will stash and acorns also gives little quizzes and trivia and Petco articles that are easy to understand, that keep you learning.
0:17:06.9 S1: So another way to go would be, of course, hiring somebody to do this stuff for you, and if you could just figure out how much you have, using a good budget, you'd be able to know how much each month you have to invest, and then you could find somebody who will do that investing for you, of course, you need to find somebody who you trust, and there's a couple of ways that they get paid, and some of them get paid on a commission, and some of them get paid a flat fee for their time with you... And so you may wanna decide which way you wanna go, and typically the ones that take a commission aren't gonna be interested in beginners, so it's usually better to get started a little bit before you get towards one of them if you're really interested in them, but personally I don't really see as much value in paying 72% of my wealth just to kind of manage it a couple of times a year, but that's my opinion, Plus they charge you to move your money on on
0:18:00.8 S2: And there's nothing fun about that.
0:18:04.9 S1: Nice, nice. But you make jokes. You do have kids, I tell you. But moving forward, for IRAS, there are two main types traditional and Roth IRAS. And so, just to clarify what the two differences are between a Roth in a traditional IRA, which an IRA is just basically a pool of different funds that you put your money into, and so a Roth IRA is when you contribute after you've paid taxes on the money, so the money gets taxed and then the money that is left after taxes goes into the fund and then grows tax-free, and generally, you can make it so that it's tax and penalty free when you withdraw the money after the age of 59 and 15, the traditional IRA and the other hand, you contribute pre or before taxes are taken out of the money, so the full amount that you have available would go straight into the fund, your money grows tax deferred, meaning that no taxes get taken out until you withdraw the money after 59 and a half, but at that point, you will have to pay whatever the tax rate is and any money withdrawn from your funds.
0:19:26.5 S1: So one good way to go. I like this group a lot, there's a lot of different investment banks out there, and most banks will offer some type of investment if they're not really focused on it as their main thing, but fidelity is... When I've used a lot over the years, I'm pretty comfortable with them. And one thing that I've used with them as an entrepreneur is opening my own Roth IRA and using their robo advisor that they have available, which is a third party, but they work together really well. Everything's super clean on their website and their app and everything can be seen, and you can still delegate your risk level for the way that the funds are diversified. So just so everyone knows that the cap right now for an annual contribution in the IRA or a Roth IRA is 6000 per year for most people, unless you're older.
0:20:21.6 S2: So how much are you allowed to put in the...
0:20:24.3 S1: 500 a month would be 6000 year. I know, but I tell ulterior. Oh yeah, sorry, I actually don't remember the age where it changes, but it's like half older than 68 maybe. I think it goes up to 7000 maybe. I don't know, I feel like it changes, I don't know. So this obviously refers to only individual created accounts, not corporate counsel, if you do have another day job or you work for a company, you should be looking into what that company has to offer, so we really... We're discussing entrepreneurs, independent musicians, who don't have that option of a corporate contribution. So if you put in 6000 a year, that would be 500 a month. I just want you to get an idea that as compound injuries works and it's magic, after about 20 years of continuous 50 a month investments, your predicted average return is about 375000, that's simply by putting in 500 a month and doing nothing else for 20 years. The more time your investments have to grow makes all the difference in the stock market, and warn buffets quote at the beginning of the podcast, so outside of the world of the stock market, there's always the world of real estate and real estate to me is fascinating because when you invest in real estate, it's actually brick and mortar, it's made of actual materials, and those materials are valued to, but it's something about the land owning the property, owning the walls and the ceiling, and so it's an investment unlike stocks.
0:22:02.5 S1: It's an investment that actually has a physical reality to it, so let's talk about a few ways that we could consider investing into real estate, obviously, this is a wide range, but I think that some of these might draw some ideas and some stuff that you might already be able to do right now, first of all, you can rent a room to two or a musicians, and whether that means that they come and stay for the night, or you use it with a record label of some sort, or... There's Facebook groups of torsion that help each other out, that kind of thing. You can post it there and it becomes a room are available to touring musicians that to or through, and it could be a good deal for them and a good deal for you.
0:22:45.8 S2: So if you have rehearsal space, that's something that you could rent out to as well as studio space, if you're sharing a room, Marsalis ACE with a band and its dark foreign evening, you can also put that online and see if someone needs somewhere to rehearse for the evening, there's always people looking for someone to go where they can build it.
0:23:07.4 S1: I used to be lucky enough to rent it out to people when I had a detached garage back down in the Highlands, I used to rent it out to touring bands to practice before their gigs in the afternoons, 'cause sometimes people would come into town and they would assemble the band when they got here, and so this would be a place for them to do that. Rehearsal that. That carries awesome. I love it, I missed that correct. Another way it would be Airbnb-ing your house. Sometimes if you're touring a lot, for example, you could be gone for a while, and that you can turn your house into an Airbnb while you're on to, or even if it's just a rental of your own, there's ways around it, but check with your real estate or check with your rental agreement first in Rahway long-term rentals is of course another way to go, especially if you own more than one property, if you're lucky enough to have that, long-term rentals are a great way to build passive income, starting a recording studio, even if you only rent the space that you're in, or if you find a rental space, 'cause you know you can draw clients renting a space for recording might actually really pay off for you, keep a home that you're in when you move up or when you move...
0:24:17.0 S1: If you get relocated to Benin, if you move to LA because you've got a great opportunity, you gonna keep backing me up when I'm talking about this, it makes it more setting, but a lot of times people will... The first instinct, the only thought is to sell the home, the guy to move to the next one, and if there's any way that you can avoid having to sell the first time, you can build... This is the easiest way to get into rental properties, I'm clearly sure. That's the way you did it. On your first one.
0:24:41.0 S2: Right? Yeah, it is, and we were very fortunate enough to do that, if you don't have the funds to create a venue, you can use a venue to create income for yourself by doing open mics, starting one approaching a venue for that idea, or even an artist here, you see if you can get book the night for one night a month and bring in all the artist friends that you have and make a series of your own and you can get paid to... You can be in charge of that and curate a great kind of music and make money while doing it. There's also the idea of gear that you had mentioned earlier to me, not to anybody else, when my first trip to London, I was very worried about bringing my guitar over, and I looked for online rentals and they were pretty expensive if you wanted to rent a guitar for a week or two, and I found a musician that had just part of his blog on his website that he was insured, had his garner wanted to talk to you, wanted to discuss what shows your plan where you were playing. And I was able to run his guitar at a much cheaper price than anywhere else, so while he wasn't using his instruments, it was still making money for him, so it's a little risky.
0:26:00.0 S2: I know how I feel about my guitars, but maybe you have a third retire that another musician can use while they're traveling through town. Yeah, you want Dorothea? My second one too, that I really like, the third and fourth one.
0:26:15.7 S1: It's so great, the idea that you could help each other out, basically, if you're going to Kansas City to play a house concert, you can easily have somebody there that's gonna rent their room for you, give you a place to have the show, if it's a house concert. And then also have a gear for you to rent basically to charge, and you pay them and then they come to your town and you do the same for them, provide them with a place to play, a place to stay, and geared rent, and this just becomes symbiotic but it also becomes a good side income...
0:26:48.8 S2: Absolutely, and once people trust you with their instruments and you trust them what their recommendations are, awesome, because you're gonna spread that around, readily wanna come back and use that same instrument. I also just said, Really.
0:27:03.9 S1: Neil's talk about some of the dues and do ads from these...
0:27:09.0 S2: When did we stop saying, Do not let a Horst that.
0:27:13.0 S1: Let's talk about some news and donuts about all this. How many times when making a financial plan... Have you heard the saying, Pay yourself first? Well, it's true, that is a do, and it is the only way that these ideas will actually work, you have to actually put the money aside first, because those collectible guitars, you did up real fast, so these third ones that you lay... Don't care about...
0:27:38.2 S2: Yeah, sure. Bora. Don't put it off any longer. I so wish that I had something like acorns 10 years ago, because it would have put me in a much better position in my life financially today, and I probably would have learned more about investing by the time I got to where I am today.
0:27:57.9 S1: Don't get overwhelmed if you start an early or starting from the beginning, just let it wash over you and don't be intimidated, that's why a coach is a great place to start because it's about as simple as we can get so that you can just do something you know, yeah, and the small investments, we're talking about change taking... Change that no one uses anymore. 'cause I'm not touching someone's change and put it into an imaginary tip jar and maybe try implementing this Venmo idea that I've got here, and if it does work, I'm coining it as my own idea, but if it doesn't work, I don't wanna hear about it, but hunters tone, I play to show with him and he had a PayPal sign in a Venmo sign behind him while he was playing, I said, virtual tips here, and he's like, I'll split them all with you.
0:28:40.5 S2: I couldn't believe by the end of the night, how many people that we would have never known tipped us, but had a little... They typed in something a little nice put a little picture and they were feeding us tips the whole time we were playing... That's great.
0:28:53.7 S1: You know, I'm gonna say this as a continuation of that too, another thing that people started doing is when they hit me on Venmo, they also put a request in there and the comments... So I get the Venmo shows up on my thing and it shows the request of the song they want me to play.
0:29:08.6 S2: So... That's awesome, I'd write back. I take requests, I just don't play them. Thanks for the money.
0:29:19.1 S1: So do start and do, start simple and small and steady, and let it go and grow over time, but make sure you define your retirement dreams, spend some time and have a conversation with yourself or your loved one, or both about what it is you might want to look like when you reach that sexy old age, if you could define that really well, then you'll know what it is that you might need to be planning for, therefore you'll know how much you should be charging to try to plan for, or how far behind you might be so that's sort of an action step, but let's give you one other actions that pick one of these discussed approaches and do it this week, it will only take a little bit of energy and it will take all of the fear and mystery out. So of course, if you've already started, Black an hour to review your accounts and make sure you're allocating to the right places still, and that they're still aligning with your goals, and then keep on rocking. We know how valuable your time is, and we really appreciate you spending this time with us and being a part of this community, it is seriously an honor for us to spend this time with you, it is our hope that you feel the sense of community here at musicians tip jar and help us spread the word.
0:30:32.7 S1: To make us all stronger. What's the best way to get ahold of us, Dave?
0:30:36.4 S2: Because out at musicians, tip jar dot com as the Osama El at musicians at Grand
0:30:42.4 S1: As always, thank you for joining us. Remember, there's a party enough for everyone, you just need to know how to get it until next time, on behalf of Dave tanking and myself, there's web please, they say to stay healthy and take care of each other, as they say the best time, the plane tree is 10 years ago. The next last time is right now, this is a musician Stephane. Nothing in this show should be Senator Esso advised these consultant appropriate tax, legal, business or financial professional through your antonie individual results or the OT and all discuss strategies have isomerase host operating on the harmonica.
0:31:30.2 S2: Tippecanoe on a walk to weeks in a rosenste. Some tahe