19 RULES OF MONEY EVERY MUSICIAN SHOULD KNOW

19 RULES OF MONEY EVERY MUSICIAN SHOULD KNOW

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1. Pay Yourself First

As soon as you get paid, put money into savings. Automating this is even better.

2. Keep a 6-Month Emergency Fund

If you have multiple streams of income. you can go as low as 3 months. If starting out on your own, you could need as much as 12 months.

3. Budget Using The 50/30/20 Rule

50% for needs
30% for wants
20% towards saving/investing
This is the bare minimum!

4. Divide Your Bonus Into Thirds:

1/3 for fun

1/3 for retirement

1/3 for debt paydown (add to retirement if only low interest debt)

5. Put All or a Large Percentage, of Your Raises Into Saving and Investing

This helps avoid lifestyle inflation and moves up your retirement date.

6. Avoid High-Interest Debt

if you have it, use the avalanche or snowball method to pay it off (google them).

7. Always Take An Employer 401k Match

Many employers will match a percentage of your paycheck. The money is getting an immediate 100% return.

If you turn this down, it’s the same as turning down a raise.

8. Your Home Payment

(mortgage, interest, insurance) should cost less than 25% of your monthly income.

9. When Buying a Car Use The 20/4/10 Rule if You Have To:

20% down

4-year loan

<10% of your monthly income

some people prefer to buy older vehicles with cash which is a lot cheaper.

10. Retirement Income

You should have a least 15% of your income for retirement.

11. Your Age Subtracted From 100

This represents the percentage of stocks you should have in your portfolio. Some are now using the number 120.

This represents the percentages of stock you should have in your portfolio. Some are not using the number 120

12. The Stock Market

Has a long-term average of 10%. To calculate your returns. It’s common to use 6 to 8% to capture the effect of inflation. Also check out this site for free stocks of up to $200 Click Here and check out this site for free money Click Here

13. The Rule of 72

This tells you how long it will take your investment to double. Example: The stock market returns 10%. So 72/10 = 72 years to double your money.

14. The 4-Percent Rule

This says you can safely withdraw 4% of your staring investment balance each year (adjust for inflation in subsequent years) and not run out of money.

15. Your Net Worth

Should be equal to your age x Pre-Tax Income /10.

Example: if you are 35 years old and $100,000 in annual income, then your net worth should be $350,000 (35 x 100,000 / 10).

16. Have At Least Five Times

This is your gross salary in term life insurance.

17. Before Spending Money:

Wait 24 hours and ask do I still want it? If you do, go ahead and buy it. This will save you from a lot of impulsive purchases.

18. Children’s Education

I don’t always agree with this one but a few people I personally know who are very financially well off save for retirement first, then their children’s education. What are your thoughts on this?

19. The Art of Valuing

Value time over money and experience over things.

Conclusion

I truly hope this helps you, the reader. Life experience has fortunately lead me to meeting many people that gave a helping hand in me saving time and money. If you are interested in generating more easy passive forms of income you can check out this step-by-step guide below 👇

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