In Money Matters for Musicians, I interview Financial Planner and Broadway Percussionist Dave Roth.
I first conducted this interview back in 2019, before the pandemic attacked our industry. I almost didn’t repost this in the wake of all that has gone on. In the end, I think one takeaway from this catastrophe has been that we need to consider our finances more than ever.
Personally, when all of my gigs dried up I realized that I had to work a lot harder to figure out how I was going to continue to earn money. So many of us have had to learn to adapt, by learning how to offer services online, to do virtual performances (and monetize them!), to better develop our side hustles, to consider weaknesses in our skill sets and to bring in to focus what is truly in our best interests as artists and as adults living in the world.
I hope this article provides some food for thought as we all continue to figure out how to move forward in the new world order.
As a freelance musician with an over twenty-year career, I am often asked for advice from younger musicians who are coming up. My number one piece of career advice? GET YOUR FINANCIAL HOUSE IN ORDER.
Why? Because being a musician, an artist or any other freelance worker requires capital in order to maintain and grow it. Being a musician also requires tenacity and longevity, which means young musicians have to take a long range approach to their careers.
To create a truly helpful experience, I enlisted the expertise of Dave Roth. Dave is an Enrolled Agent, which is a federally authorized tax practitioner recognized by the U.S Department of the Treasury. He is also a professional percussionist who has been playing Broadway shows for many years.
Dave is my family’s accountant and financial advisor and he has been a tremendous resource for both my family’s finances and the complexities of my business needs.
The goal of this post is to give musicians a chance to reflect on their financial lives so they can make better choices for the future.
First Steps to Financial Planning
Q: Financial planning can be quite terrifying for artists. What is the first thing you recommend someone doing when they decide to get their finances in order?
Dave: First and foremost get out of debt. If this is an issue for you then you should adopt an effective budget plan to assist in this. I recommend the 80/20 method. And then start putting money into investments. No amount is too small. The sooner you start the sooner that your wealth will start to grow. Remember that all this is about exponential growth. Every year that passes without putting money into investments can cost hundreds of thousands of dollars in growth by the time one reaches retirement.
Q: How much should someone be saving every month? What categories do you recommend people save in?
Dave: That is dependent on their cost of living and their income levels. One of the most useful tools to help with this is a financial tracking program like Quicken, iBank, Mint.com, etc. Use of this style of tracking will assist in identifying areas of spending that can be curtailed. 9 times out of 10 it is cash withdrawals from the ATM machine.
Common Money Mistakes That Musicians Make
Q: What are some of the mistakes you see your clients making in their financial lives?
Dave: Not “feeding the animal”. What I mean by that is continuing to put money into an IRA to invest on a regular annual basis.
Q: What about retirement savings. Is that something that artists should even think about?
Dave: ABSOLUTELY! In many ways artists need to think about it more than the average Joe because they may not work for an employer that provides a retirement program like a 401K.
High Cost of Living Areas
Q: What do you recommend for people who live in high cost of living areas (like NYC or LA)?
Dave: Don’t live beyond your means. As a NYC artist I have always been realistic about the lifestyle that I can afford. Don’t rent or by an apartment that will drain most of your earning and savings potential.
Q: What do you wish you had done better, started/figured out sooner?
Dave: I wish I would have started putting money into my IRA much, much sooner. I also wish I would have educated myself on how to handle my own investments at an earlier age.
Dave’s Top 5 Pieces of Advice for Musicians
- Learn to communicate effectively.
- Remember that your art will not put food on your table if you don’t treat it as a business.
- Treat your fellow artists with the same respect as you expect would be paid to you.
- Learn all the intricacies of taxes as it relates to a sole proprietor business or hire a professional to navigate this for you.
- Practice! I’m not just talking about your art form but all aspects of life, love, health and financial wealth.
Advice for Pandemic Times
Covid-19 Pandemic advice from Dave: “Very few other industries have been affected by the worldwide pandemic more than the performing arts. So many have had to be creative and in some cases reinvent themselves. This too shall pass but in the meantime it is important to stay informed and look for all the resources of financial aid like unemployment assistance, the federal Paycheck Protection Program (PPP), the Economic Injury Disaster Loan (EIDL) and check with local arts agencies that might be providing help through private donations and possible federal programs that they have tapped into. “
Dave Roth is a professional percussionist in NYC. He is an active musician in the Broadway scene having played on nearly 40 shows and has also accompanied Sting, Sir Paul McCartney, Gladys Knight, Ricky Martin, Joni Mitchell, Natalie Cole and Aloe Blacc to just name a few. Dave also became an Enrolled Agent licensed to practice before the IRS granted by the United States Treasury Department and has an active tax and financial planning practice with well over 200 clients.
Check out Dave’s performance website.
Check out Dave’s accounting website.