Let’s start by agreeing there’s plenty unfair about the entertainment industry, mmm, kay? Agents renege on deals and verbally tap dance so they never give a straight answer. Great projects get stuck in development hell. Stars and people with symmetric, appealing faces enjoy preferential treatment at bars, restaurants, and pulled to the curb for speeding. Verbal and emotional abuse runs rabid and unchecked. There’s a legion of college graduates supporting this industry, working for free.
But… I made the choice to work in entertainment. If you’re reading this blog, there’s a good chance you made a similar decision. We made the decision to enter this minefield, so if we don’t like it, that’s on us.
Would you listen to a kindergarten teacher whine about working with kids?
Or a therapist complain about her crazy patients?
What I’m saying is: these things come with the territory. But…
Is financial irresponsibility one of those things?
Why is financially irresponsible behavior condoned the moment those dreamy-eyed suckas — erm, I mean, interns — emerge from their Ford Escorts and lock-step into the awaiting tentacles of the Hollywood machine?
Not sure what I mean? Here’s the version of the Hollywood dream pushed onto young minds entering the entertainment industry:
- Work for free — it’ll pay off. Do this 3 or 4 times, at 3 month stretches at a time.
- Work for cheap — the real money comes after you’ve “paid your dues.”
- Spend 3 to 7 years “paying your dues.” This involves devoting your life to someone else’s work for a pittance, networking (buying drinks and lunches you can’t afford at the right place to talk to people), and buying the right clothes and right car with money you don’t have, because the idea that looking successful is the gateway to being successful is drilled into your forehead with a ballpoint pen everyday for those seven years.
- After you’ve paid your dues, treat yourself to more nice things: a nicer car, a bigger house, exotic vacations. You earned it.
- Struggling to make ends meet? That’s weird…
- You should work harder — the real money is yet to come.
The craziest part of this system is it used to work! Fifteen, 20 years ago, there was little competition clogging up bandwidth and competing for mindshare. A fortune was waiting to be plucked from the vine by producers with a couple TV movies under her belt, or a screenwriter with the hot spec.
Fast forward two decades…
The market changed. Spending habits didn’t. Which forced creatives and executives and agents to take a hard look at their finances for the first time. They look at their checking and savings accounts and ask: where’d it all go? How could they have made so much money, yet 20 years later, still find themselves living paycheck to paycheck?
It went to things like:
- Leasing two luxury cars and all its ancillary costs: gas, maintenance, insurance, repairs.
- A house with a 90210 zip code and a mortgage with as many digits.
- Private schools for the kids they never saw.
- Shopping trips in Beverly Hills.
- Vacations to Vegas, Cabo, Paris.
- $100 lunches and $10,000 membership fees to supper clubs, country clubs, and the SoHo house.
Here’s where it didn’t go:
- Paying off debt.
- 401k’s and Roth IRA’s.
- Long Term Growth Funds.
- Money Market Funds or Savings Accounts for liquidity.
- Creating new revenue streams to build redundancy.
Despite the errors of their ways, the message of consumerism spreads! Our bosses sell us the same system they bought into, unaware the market broke that system like Bane broke Batman. It doesn’t work anymore.
Fear not, because together we’re going to learn what does. We’re going to follow the Fighting Broke system, which involves one principal and four rules.
The Fighting Broke System
The principal is the 10-year-principal: what is the true cost of this behavior if I did it for 10 years?
The rules are:
- Spend less than you earn
- Decide what’s important to you to spend money on, cut out everything else
- Crush debt
- Put your money to work for you
You might be wondering aloud, “What kind of bullshit rules are those? It’s too simple. I can read that on the back of a Suze Orman or Finance For Dummies book. Or in a fortune cookie. It can’t be that easy to become financially independent.”
My response? “Bitch, it may be simple but you think it’s easy? Do you live in the same Los Angeles as I do? If it was so easy, why are so many people just getting by despite surrounding themselves with luxury goods and designer labels?”
It won’t be easy. You’ll have to make tough choices. Keep asking yourself, though: do I want to be financially independent 10 years from now, or do I want to be another Hollywood cog, dependent on that next paycheck for my overpriced car payment?
Photo Credit: Xtreme_i