Miata Adventures

Miata Edoga asked:


We all have a list of things we “should” do – stabilize our check book, take that class, read that book, call that casting director – yet somehow most of these things remain undone. We know that our life would improve if we were to complete these tasks, and we know that we feel a continuous level of concern around not doing them. Yet, somehow, they keep getting pushed off.

The justification, I believe, for our procrastination in areas where we know it is hurting us is dread: fear of not succeeding (what if I call that casting director and they blow me off; or if, even worse, they are impolite to me?), dread of what we will find (what if I stabilize my accounts and find out that I am living above my means each month? I would have to actually address the issue, instead of sticking my head further into the sand), and so on. The predicament is that, fundamentally, the dread we feel at the conception of addressing the issue is less than the discomfort we currently feel by avoiding it.

We’ve all done it. In terms of your finances, it is horrible knowing that you are falling short $500 per month on your living expenses. It is distant easier to avoid the issue, and continue to live in the fantasy world of “when I get my immense break, then it will all be OK,” than it is actually go to work solving the dilemma. (For help with this, email us at info@abundancebound.com with “Chart of Expenses in the subject line. We will send you a detailed excel spreadsheet to get you started on the process.)

With regards to your acting career, it is easier to have the mentality of “I’m so good, they should be looking for me” than it is to pound the pavement, make those phone calls, take those classes and so on.

Now, does that mean that we shouldn’t take the time to establish and write down our goals, both financial and creative? Of course not. But as long as we are living in the space of “I really should do those things” we will never get any closer to actually achieving them, or getting the benefits that come with their accomplishment. Anthony Robbins, a well-known speaker and author, says:

“If you don’t take action on something you want, you are merely stating a preference.”

In other words, you can say that you want to be a direct on a nighttime drama, or have sufficient passive income to cover all your living expenses, or be featured regularly on SNL. If you aren’t out there actually gathering those casting directors, or learning about investments, or honing those comedy skills, your words are practically meaningless.

We have all heard, at one time or another, that knowledge is power. It isn’t. If it were, librarians and academics would dash the world. What is really the case is that applied knowledge is power. We can know everything we need to do to alter our situation, but, until taking action becomes a must, we will do nothing and therefore, accomplish nothing.

No-where is this clearer than in our finances. Consider these examples. Anyone that has been reading these newsletters for long knows the importance of establishing a wealth account and developing the custom of paying yourself first every single month. Have you actually done it? Every month Abundance Bound runs a completely FREE teleseminar offering plenty of extremely useful financial information for artists. Typically, about 25-50 people register to participate in these calls. Yet, every month, only about 25% of those registered actually exhibit up.

Are we suggesting that not taking action to improve your relationship with money makes you dumb or lazy? No. But you need to be absolutely lucid that your financial situation will only alter when you determine that making that alter is completely non negotiable. Your life will only become what you want it to be when you cease talking about what you SHOULD do and get into action on what you MUST do.

So the question to inquire yourself is this: what has to happen for you to be glad, healthy, affluent and successful? And of those things, what do you directly control? Now establish a strategy and plan of attack for accomplishing each of those things, along with a lucid understanding of the resources you need to accomplish your goals. Accountability has to be a piece of this, as well as coaching from someone who has already walked the path you are setting out on, or you will likely stumble at the first impediment, or spend years finding the correct way of doing things (both of which can be avoided with the correct resources).

Do you want to shoot a short to showcase your talent as an actor? Then you must write a script, get someone to shoot it, cast the supporting talent and find good locations. Bringing on a producer who as gone through it all before will make that process 100 times easier. Are you sick of struggling with money? Then you must take action to alter that situation, be it attending a free teleseminar or being coached by a successful relative about genuine estate investments. Want to make an easy transition from acting school to a stable acting career…? You get the thought.

The key is to make it a must: when something is a must, human beings can do extraordinary things; and extraordinary is what we all want from our lives.



Cell Phones

Miata Edoga asked:


Everyone’s going out for drinks after class. There’s a bar down the street that has fantastic appetizers, and the cocktails aren’t too expensive, and it will be really good to connect with other people in the class, so never mind the fact that, with a couple of $7 drinks and an $8 plate of food and a 20% tip, that social hour ends up costing you $25. And you have class a couple of times per week, so that adds up to an additional $200 per month that you could really do with avoiding, but everyone else is doing it, and you don’t want to be the one to confess that finances are tight, and be a downer on the evening, so you go along and have a good time, but all the while feeling just slightly anxious because you know that most of this is going to end up on a credit card at the end of the month, and those bills are getting high sufficient as it is…

Does any of this sound familiar? I know this used to a steady occurrence when I first moved to Los Angeles to pursue my acting career. I would go out with friends after class, or rehearsal, and have a fantastic time, but there would always be that nagging voice at the back of my head telling me that I couldn’t afford this. So the question is: how does one stabilize the need for a social life with the realities of a tight budget? We have three different suggestions here.



1. Don’t attempt to keep up with the Joneses. We are in some ways fortunate, as artists, that we don’t have the pressure of some of our corporate counterparts in this area. For us, this area is more about dress and eating out than driving the newest Mercedes or living in the correct part of town. But it is still a factor. The need to “look good” is nearly beaten into us from an early age, so avoiding falling into this trap can be tough. Try shopping at a discount store instead of going to name-brand shops, or having coffee with friends instead of drinks (a $1.50 coffee is much easier on the wallet than a $6 beer). You will often find, particularly when it comes to socializing, that people are really happy not to be spending money, as they are all busy in keeping up with you as well, even if they cannot necessarily afford it either…



2. Forecast your fun. Forecasting is the process of projecting what your spending will be in any area of your life. The way to decide this is to complete a Chart of Expenses (email us at info@abundancebound if you would like one), from which you will be capable to see precisely what you are spending, on average, across the financial board. You can then decide exactly what areas you are overspending in, and where you can spend a bit more if essential. The key to this process is not denial, notwithstanding: not not remove categories as frivolous without serious consideration, because there is nothing like “forbidden fruit” for enticing you back. So never go into a month saying “I am not going to go out at all” – you are simply setting yourself up for failure. Instead, allocate a sure amount for “Eating Out”, or “Drinks”, or whatever other category you want, and then, when the end of the month comes around and you are near the end of your allocated funds, propose Denny’s instead of the local bar for those after class drinks.



3. Work together to save money. Given that most people are in the same boat as you when it comes to money, be the first one to broach the subject of saving money with your friends. There is such a taboo in this country about discussing one’s finances that most people go through life never saying more than the compulsory “I’m fine…” (generally a lie) or “I’m broke…” (but with no genuine attempt to solve the issues causing that situation). Break with tradition and work with others on ways to both save and make more money. You will be amazed at the ideas that come out of brainstorming these things with like minded individuals, so give it a go! At the very least, it will take the pressure off the next time you say “Make mine a water…”

So besides, I hope these pointers give you some ideas about how to have fun but still make sound financial decisions at the same time. Again, it is never about saying “I won

‘t go out until I’ve made $X.” That may work for some people, but I have yet to meet them. Instead, map out your spending, and put your money towards things that you will delight in. Instead of feeling guilty about buying a Ice blended latte every day, and then stressed about the $30 on drinks going out with friends, drink steady coffee instead. $1.50 a day instead of $3.50 is $14 per week you have saved, which is $28 every two weeks, which covers an evening out with friends every other week. Speak to people, and work out things together, and then stick to your plan. Your bank account and stress levels will thank you for it.



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Miata Edoga asked:


 

What To Do With Your Tax Rebate?

 

“Economic Stimulus” is something at the forefront of everyone’s mind these days, particularly in the entertainment industry. With the Dollar at an nearly record low, gas prices soaring, the general economy spluttering, a costly WGA strike just in back of us and a possible SAG strike looming, things are looking a little cheerless.

 

Luckily, a little relief is at hand. As of May, those that have filed their income tax returns will be starting to get bonus checks in the mail; $600 for an individual, $1,200 for a family (check www.irs.gov for details on eligibility and timing). So the question on everybody’s mind is: “What do I do with my new found money?”

 

If you inquire the government, you spend it. All of it. After all, that is the point of an “economic stimulus” package: you give people money, which they go out and spend, which generates cashflow to numerous business that would otherwise go with out, which means more money they spend in turn on supplies, and staff, and taxes… you get the picture. Notwithstanding, unless you strongly feel it is your patriotic duty to blow through your upcoming $600 at Macy’s (or Target, depending on where you like to shop), we would encourage you to consider using this windfall as your very own, personal “economic stimulus” package…

 

So, if we accept that we are not going to do what GW and friends want us to do with our money (you insurgent, you), what to do with it? We would propose putting it into three distinct areas in your personal financial life.

 

1. Debt Relief – $200. If $600 is the quantity you end up with, then $200 of it should go to the credit cards. This should be on top of whatever quantity you are paying them besides, as it means the extra money will go straight to the knocking down the precept. Not only will this decrease your interest payment next time, but will feel fantastic as well – something that is all to uncommon when it comes to money, but is none-the-less crucial to work our way out of tight financial situations.

 

2. Wealth Account – $200. This is one of the cores of the Artists’ Prosperity System, and is fundamental to any wealth building process. All a “Wealth Account” is is a high interest savings account which you use to accumulate money in until you are ready to invest with it. We think highly of ING for this (www.ingdirect.com), and they always bid highly competitive rates, but there are certainly plenty of other institutions that are just as good – they can easily be researched online. What I want to stress with this account, before we move on, is that it needs to be liquid (ie you can get your money in and out of it easily), and that it is not a savings account, or an emergency account, or a travel account (all of which can be fantastic, but are separate from your wealth account). You only take many out of your wealth account to purchase assets, namely things that either generate money for your or increase in value. Nothing else. Ever. Period. Have I made my point.

 

3. Treat Yourself – $200. OK, so blow through some of the money, and feel fantastic about doing it! When else have you been given money to go out and spend? And it is for the good of the country! A genuine win win! So get out there and purchase a new shirt, or that pair of shoes you have been coveting, or a couple of games for the Wii, totally guilt free. Reward is an fundamental part of building wealth, because it makes the discipline necessary in other financial areas significantly easier to bear. So treat yourself. You have, after all, just paid an additional $200 towards your debt, and started a high interest account (into which you will be putting money regularly, accurate?), so now is the time to spoil yourself a little.

 

And that is it. Sweet and simple. Three areas into which to put your “free money” – and any other money that comes your way if you pick to. Some of you may, of course, want to put more into debt and your new wealth account than into a splurge for yourself, and that is fine. Just don’t take it out all together. As I said earlier, one of the keys to growing money is feeling good about it, so you really do need to reward yourself for having taken action on improving your finances. There are a number of places to go next but, if you really allocate your money into the three areas listed above, you have laid a fantastic foundation for yourself, and taken a powerful step down the road of financial security and prosperity.

 

 



Coffee Drinkers Hut

Miata Edoga asked:


 

Panic! Dash for your lives! The world is collapsing! In the last year, the housing market has collapsed, taking with it the inventory market. Oil prices have exploded, banks are showing record losses (how about $10 Billion for a quarter anyone?), and going out of business left, accurate and center, and, basically, lots of people’s money is going down the toilet. So now is not precisely the best time to be learning about one’s finances, accurate.

 

WRONG!! There is a fantastic quote by Warren Buffet (Multi-Billionaire, Philanthropist and powerful candidate for greatest investor ever) that says:

 

“Be alarmed when others are greedy, and only be greedy when others are frightened”.

 

What happens when there is a large economic slump is that people panic. Sometimes this is with good justification: when it is easy to borrow, people tend to get in over their heads with debt. Blend that with a housing market bubble, and suddenly that house you’re making payments on is of value 25%less than you paid for it. Ouch. Or those banking stocks that were being pumped by brokers collapsed under the weight of evil loans. Ouch again. Or… but you get the picture. The trick to riding this all out, notwithstanding, is to keep ones head, and not follow the herd. 

 

Take stocks as an example. Let’s say you bought a solid company when it was at $25. Things happen, we hit an economic downturn, and suddenly that same inventory is of value $15. Oh no. We’ve lost nearly half our money. Fast, sell before we lose any more…

 

…Or not. If the company is powerful, then it might not be its definite results that have caused its down turn, but a more general tide of destitute performance across the country. If this is the case, then all selling does is make genuine the money you have so distant only lost on paper. Mix this with the fact that you should be looking at holding stocks for at least the 3-5 year range, and with luck you won’t make any swift decisions that will loose you money. Everything goes in cycles, so instead of loosing ones head (and money at the same time), recollect the aged maxim:

 

“This too shall pass”

 

And keep on keeping on. The other thing, of course, is that when everything is down is actually a ideal time to be looking at putting money into the market, a house, or other currently miserable investment car. I recall during the last economic downturn, in early 2002, I had just put my first genuine money into the inventory market. A ally said to me “Why on earth would you be buying now? Everything is down?” I looked at him and said “Precisely”. We made over 50% return on that money in 2 years.

 

Not that we should be running out there and jumping into things willy-nilly. Random buying will make you just as broke as panic selling. But now is the time to seriously look at your financial situation. As opposed to fleeing all things financial in the coming months with remainder of the herd, swim up stream a little. Learn how to handle your debt properly, so that it isn’t hanging over you any more. Begin a high interest wealth account so that you can have some money to begin investing with in  the next year. Set up your finances so that you are maximizing your tax deductions. Learn about how to handle money now, so that when things turn around (which they will) you are way ahead of the curve, instead of in back of it.

 

 



Computer Items.

Miata Edoga asked:


The notion of tackling their financial situation often intimidates people. They feel as if the situation is too gargantuan, too overwhelming, to be tackled, and so they adopt the Ostrich mentality (ie sticking their head in the ground) and say things like “I will sort out my finances when I get my “enormous break”… at least, I know I did!

But the reality is that there are several small, simple things that anyone can do to improve their financial situation accurate away, things that will lay fantastic ground work to build on over the course of people’s creative careers.

Pay Yourself First

This really is the corner stone of any long term financial stability, let alone wealth. What this actually means is simply that, every month, you are putting a set percentage of your income into a high interest savings account, and not touching it until you are ready to invest with that money. And that is the key. This is not the “rainy day” account that you dip into when things get tough, nor is this the “splurge” account to get something special for yourself as a celebration. Money is only withdrawn from this account to purchase assets with – an asset being defined in this case as something that either makes you money, or appreciates (increases) in value (so a new vehicle would not be an asset under this definition!). Do this consistently and, over time, you will accumulate a very sweet amount of cash to be investing with.

Steady Money Days – records & Association

A “Money Day” is simply a day that you set aside to work on your finances. Now, it does not have to be a entire day, of course – unless your situation merits it… generally because you haven’t done one for a long time! Personally, I set aside a couple of hours every other week, and then a gathering with my accountant over the phone every couple of months. Doing this accomplishes two things: it keeps your accounts in impeccable order, and it allows you not to think about your finances between times, freeing you up to think about and do other things… like your art

Fore-cast your spending

Forecasting is the process of allocating where your money will be spent. You begin by going through your Chart of Expenses (email us at info@abundancebound.com if you need one of these), and finding out where and how you currently spend your money. You then go through that list, and decide which categories cannot alter (rent, for example) and which ones can (groceries, entertainment etc). Having got that list, you can then make powerful, educated decisions about where you pick to spend your money… as opposed to just blindly trying to cut out Starbucks or eating out. And that is the immense difference between this process and traditional budgeting. We never propose eliminating a category, as we have all heard “absence makes the heart grow fonder”. But as opposed to going to Starbucks every day, can you go every other day? Or order a Tall instead of a Venti? Doing this in several areas can make a mammoth difference to your overall spending.

Keep business separate from personal

Many of us do something called “co-mingling”: we function our whole lives out of a personal checking account. The dilemma with this is that no “genuine” business does this – you would never see the CEO of Kinkos write a check for the company out of his personal account. What we need to do, at the very least, is set up a DBA (Doing Business As) account (www.legalzoom.com can help with this) for our artistic career, and get a business bank account associated with that DBA. Not only does this then permit us to clearly see what we are spending and earning through our acting career or art sales, but it also legitimizes the tax deductions we take due to our art – the IRS can clearly see that we are running our career as a business, not as a hobby. The excuse this is necessary? Business expenses are deductible, hobby expenses are not (this distinction can hurt, to the tune of thousands of dollars of back taxes: one of our students got nailed this way)

 

Steady financial education

Keep doing what you are doing correct now! We take time to go to art school, acting classes, workshops… but we expect our finances – something most of us have never worked on (a basic problem with our education system, and something we will address in a separate article) – to somehow take care of themselves. Not only is this not realistic, it is hazardous, as we can make numerous serious mistakes blundering around while we attempt and find our financial way. The biggest justification people cease pursuing their artistic careers is lack of money. Knowing this, doesn’t it make sense to put some time into financial education now, so that you are around for the long term? We read all the time about people only breaking out in their forties: wouldn’t it have been unhappy if they had had to abandon the arts before then because they had to make money? And wouldn’t it be unhappy if that was going to happen to you… and you had to quit for the same justification? So carve out some time now to learn about money – it will be well of value it in the long dash. 

So there you have it – five simple things you can implement accurate now that will significantly improve your financial picture over the coming months and years. Incorporating all of these things into you daily and weekly lives is only a tiny time commitment of time, but the dividends from doing so can last a lifetime.

 



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