Tuck as much wage money into savings and investment accounts as soon as you can.
The dumbest thing that people do, the dumbest thing that I did, was spend every dime of every paycheck. The dirty little non-secret is: money is stretchable. If only you have the will to stretch it ...
A famous and well-paid story artist complained to friends of mine that he could not for the life of him save any money. They knew his life-style, and said to him:
“You and your wife go to eat at nice restaurants Monday through Saturday. How much do you spend dining out in a given week?”
He answered: “Three hundred, maybe three hundred fifty dollars.”
(This was twenty-five years ago.)
I know artists who made huge money in the go-go nineties, spent it on toys and bigger houses, and are now broke. And I know artists who stayed in their small two-bedroom places, lived frugally, squirreled the extra cash into bond and stock funds, and today are financially independent.
Funny how that works.
If you choose to work in the animation biz, you will likely have times of fat, steady employment and periods where you’re living hand to mouth. It’s the way the industry has been for as long as I can remember. The folks who survive in it are the ones with talent, the right training and work ethic, and a knack for getting along well with co-workers. (Being in the right place at the right time* doesn’t hurt, either.)
But there are periods when even those things aren’t enough, because crap sometimes happens. That’s why it’s important to have a cushion of moolah for the thin times. You are, after all, working in the entertainment industry, and you need to be prepared for external events.
Live under your means. And the lower the elevation, the better.
* This is sometimes known as luck.
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6 comments:
Hear, hear! I'm a VFX artist between gigs, and having savings for times like these means a lot.
"I know artists who made huge money in the go-go nineties, spent it on toys and bigger houses"
This doesn't really make sense, since anyone who bought a big house in the 90s here in LA would now have hundreds of thousands of dollars in equity...
And your friend who lived in a small apartment would have paid hundreds of thousands in rent over this period. Sure he'd have a portfolio but he'd still be paying rent indefinitely....
@Anonymous 9:43:00 AM
What you write may be true for people with steady employment. A house is OK as long as the homeowner has steady income to pay off his mortgage debt. However, the animation/VFX industry does not guarantee steady employment.
I've met VFX artists whose homes turned into anchors around their necks during slow times. It didn't matter how much "equity" they built up -- houses are not liquid assets like cash and mutual funds. These artists emptied out their retirement accounts to save their homes from foreclosure during rough times. They're also restricted to Los Angeles for as long as they own a home in Los Angeles.
Meanwhile, artists who rent are free to move and work on projects in other cities, states and countries. Renters also pay less per month than homeowners who must pay for a mortgage, home insurance, and maintenance. This monthly difference in living costs can go straight to a renter's savings account.
Obviously you shouldn't buy a house if you do not have enough cash liquid for downtime, this is true for anyone.
"They're also restricted to Los Angeles for as long as they own a home in Los Angeles."
Sure a renter can move around but a homeowner can equally do so by renting or selling their property. The difference is when your 60 and the work dries up, the renter will have the joy of using his stocks and bonds income to continue paying rent and building someone elses equity..
Welll ... every case is different.
In L.A., animators who bought houses prior to '99 would have done fine. They wouldn't be underwater.
But if you bought a big house in, say, 1997, just before the air began to leak out of the business, and you got laid off in 2000 (as many did), you might not have an over-leveraged house but you'd still have a big house on which you couldn't make the payments.
My main thrust here is: Live below your means. You still might hit tough times, but you'll have more maneuvering room.
Wow.
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