Editorial: Musicians and their Money Management Woes

Microphone-Holding-Bag-of-MoneyIn the recent months, we have seen several hip hop artists, get flagged by the IRS, Uncle Sam -aka- the Man.  We have witnessed Music Industry Artists like Fat Joe or otherwise known as Joseph Cartagena, who was sentenced to 4 months in federal Prison and a fine of $15,000 for unfiled taxes, Lauryn Hill, was sentenced to 3 months of jail time and 3 months of house-arrest for tax evasion and many more go through the money woes that come along with poor money management skills and “mis-education” in the music industry.  Some artists feel as though “why should they be bothered with knowing about the business side of the music industry, if they can just hire someone to do that for them?” I say don’t take the easy way out on paying someone to teach you the business, know the business and then hire someone to look over your funds.
Now maybe you can ask, why did these rich entrepreneurs fall flat on their money issues? For some it was just being plain lazy and pushing the buck to another person to take care of, for others its not even having the money to actually pay your debt because maybe you’re not making as much as you were before. Whatever the reason, you should be the one responsible for your spending habits and debts.  Yes you can hire an accountant but again educating yourself is key.  When Uncle Sam comes knocking, he is coming to your door not your accountant.
So when you first get signed what is the first thing you will purchase a house, a car, jewelry, lavish trips etc.? What about clearing previous debt? Heres something that always mind boggles me “ about some indie artists, they will pay 400.00 for a pair of kicks to walk a red carpet or to show off in a video but when you listen to their demo it sounds like a wolf crying because it just got ran over by a train!” Invest in your career, in your dream and then flaunt the wealth through your wants. Just because you signed a deal with a company for 2.5 million dollars just means, you have to pay that back in albums, cash, time etc. Also, money made from shows, features, concerts etc. have a tax that need to be paid- so don’t think you’re getting free $$$.
As an artists you need to know the Business side of things.  Knowing the 6 “w’s” of the financial side of the music industry is key to a successful career and money management skills. The main tip don’t just focus on your talent or craft, know your craft in its entirety-Get organized.  The six “w’s” are:
When, what, where, when, why, which and who.
What you need to know:
When you’re getting paid: Knowing when your royalty checks are coming in, bills need to be paid, and deadlines are first step to making sure you stay on track.
Where you’re getting paid from: making sure that all you follow up with concert/show organizers that need to pay you and knowing their info is important because concert organizers can get tricky when it comes to payment sometimes, especially if you’re an INDIE Artist. Secondly, know where your money is going is a known factor!
Why your getting paid: Make sure that you are aware of why you’re receiving a check not just for services, but know what each check that gets deposited into your account is for, just in case there’s a mishap with information.
What your getting paid: “Know your worth!” Sticking to an agreed payment amount is important and making sure you have a SIGNED contract on paper with sponsors, companies, show organizers and more.  Anyone can debate and dispute amounts if it was only a verbal contract signed with saliva. YUCK!
Which account its getting deposited in: Don’t leave it up to your accountant to keep everything in line, know which account you can purchase a Maybach from and which one you can only purchase a dollar menu item from McD’s-it will save you the trouble of getting declined at the register. Have separate accounts for frivolous spends, investments, vacations and more- if you can afford to have that!
Who is managing your $$$$: do your research on accountants and money management firms.  Don’t just go with a referral because what works for the Jones’s might not work for you.  But then on the other hand, sometimes trusting the word of a colleague can help you find the best in the business for the right price. Also, Knowing how many people have their hands in managing your financial portfolio is a must. Be a stickler with your money and your music!
For the Indie artists who might can’t afford the luxury of having an accountant, do your research on simple money management tips, learn how to penny pinch and splurge. Make a budget and a plan on how you are going to get to the next step in your career.  Sit down and write out what it will take financially for you to produce your music, photo-shoots, clothing, jewelry, features and more.  Remember once you sign a record deal and receive millions, it all has to be paid back. So just know that you are the last man on the totem pole to get paid, unless you’re the entire team i.e. producer, manger, pr, artists, etc.
Now some of you reading this might say, “what makes you an expert on this topic?” Well actually, I am not a professional expert in money management but I am an expert on how to manage money personally, with a car note, mortgage, children, 3 small businesses, savings, etc. -we all are. Day in day out we manage our personal funds to benefit our needs.  We might even rob peter to pay paul.. Whatever the case, don’t end up with a beautiful talent and then 3 years down the line have to still be paying for it.
Here is a list of other Music Industry Artists that have run into money trouble woes in the past:
Snoop Dog -aka- Snoop Lion
Lauryn Hill (mentioned above)
Fat Joe (mentioned above)
Method Man
Little Wayne
Young Buck
Scott Storch
Toni Braxton
Beanie Seagal
Kawin LongThis article was composed by Ms. Kawin Long, the CEO and Founder of Prime Vision PR Specialists Group, Owner and Operator of Capchique Accessories and Lead Designer at Innocent Damsel, Inc. All articles written by Ms. Long are her summarized opinions and plan guidelines on specific topics discussed. She has had an extensive background in public relations, marketing and business management. You can contact her at info@primevisionpr.com for any questions, services or tips.
To read more about music artists and their money woes and my article inspiration http://thekoalition.com/2013/06/10-hip-hop-artists-fat-joe-tax-evasion/
Image 1: http://ledgerlink.monster.com/news/articles/507-ledgerlinks-top-15-songs-about-money
Image 2: http://www.bendockery.com/my-blog/music-business/

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