The Lure of Easy Money

0
508

The Lure of Easy Money – Is it a blessing or a curse?


      21 years as a DJ. I’ve worked in them all. The small town go-go bar with a $25 shift pay and no mandatory tip out to one of the biggest clubs in NYC with 100 girls, 4 stages and 7 girls onstage with a split rotation. I’ve had shifts where I went home with less than $50 and nights where I went home with $2,000. And through it all I made well over a million dollars in that time. And… I also ended up losing pretty much all of it. Why? Because I thought the money would always be there and I was not taught how to manage the money as it was coming in.
     It’s a cash business. And when you have cash in your pocket it is tempting to spend it. There may be many of you out there that have much better habits around money than I did. But for those of you who were like me, the guy who always needed to have the newest and latest electronic toys… The guy who always needed to be taking care of the bill for my friends when we went out because I knew I was doing better financially than they were… The guy who was always looking for ways to “play”. This article may save you some serious pain in the future.
      I always tell girls when they are first starting, “If you work this business right and manage your money correctly, in five years you could retire and never have to work again.” But no one ever told that to me as a DJ. I was well into my career and close to $250,000 in debt before I was finally taught some “simple” principles that turned around my whole approach to money.
     First off, invest some of your hard earned income into a financial education. Read some books, listen to some audios on the subject or attend some classes at a local college. No matter if you are making $15,000 a year as a DJ or $150,0000 a year there are things that you need to learn to prepare yourself for the future. Examples: What is the benefit of establishing a business for yourself as a DJ? What is the difference between a DBA (Doing Business As) and an LLC (Limited Liability Corporation/Company)? We invest tons of money in music and equipment, but few of us invest any money into developing our knowledge of how to protect ourselves and our income.
     Second, my suggestion is that if you are not currently paying taxes. Start! Unless you have some tremendous income from another job, when it comes time to buy a car, a house or anything else that requires “proof of income” you are going to be screwed. Or you will make the mistake that myself and others have made of putting those purchases in someone else’s name. Bad choice. When we’re doing it we may think that we are beating the system. Until the break-up, divorce or family feud happens. Then we are out the house, the car and the hard earned money because we have no legal right to them and no proof of income to claim them. And if you apply the first step that I suggested of investing in increasing your business and financial intelligence you will find that there are ways that you can actually gain money through claiming those taxes.
     Third, start paying more attention to your income and expenses. I was never big on “budgeting”, but learning exactly what I needed each month to cover my living expenses allowed me to plan much better on where my money went. Write down what your expenses are. Get very clear on all of them. Rent, car payment, insurance, phone, Internet… write it all down. Add it up and then divide it by 4. You now know what you need to bring in and set aside every week to cover those expenses.
      Fourth, start a discipline of creating “buckets” where you will put a portion of your income that is over and above those expenses. I learned this from reading a book called Rich Dad, Poor Dad by Robert Kiyosaki. Many others out there teach the same thing. T. Harv Ecker and Dave Ramsey are some of the better known authors on the subject. The idea is pretty simple, but it dramatically changed my approach to money. Let’s say that my break even for the month is $4,000. Divided by four that means that I need to set aside $1,000 a week to cover those expenses. The bucket process is where you take the money that is over and above the break-even point and you split it into different buckets. One bucket is for saving, one for investing, and one is for “play money”. They suggest having at least those 3. Personally, I created several. I had a health fund, one for vacation, one for taxes… anything that I wanted to prepare for, I had a bucket. I personally had a total of 10 allocated to different things. So each week, I would take the $1,000 and put that into an envelope that was dedicated to my expenses. Then I would take what was left and divide that by however many buckets I created.
     Fifth, become disciplined around finances. When you commit to increasing your financial intelligence and creating those buckets, you need to have the self-discipline to apply what you have learned and to ONLY use the money in those buckets for the reason you have created them. Do not borrow from one to increase another. You are going to have money to play with, play with it. But only use what is in the bucket to play with. Need to take a vacation? Start a bucket for it.
     No matter what you are earning currently you can begin to plan for your future financially if you start using this process. Remember this saying… People do not plan to fail. They fail to plan. Take advantage of the great opportunities that this business can create for you to create a future for yourself financially. Don’t end up like many I have seen in this industry who have been in it for 10 years and have nothing to show for all the time and effort that they have put in. It’s never too late to get started.
     Sincerely,
    Willard barth

Comments

comments

SHARE

Dane Hansen is the current president of PANDA. He’s been nominated multiple times by Exotic Dancer for some of their most prestigious awards, Employee of the Year and DJ of the Year. Dane puts in exhaustive work to bring the dj community to a higher level year after year.