“If you are not planning ahead, you are falling behind.
—Chris Lose (A clever attempt to get one of those really cool legacy quotes that lives on after I’m dead and inspires people to plan for stuff)
Repeat after me: I am not invincible. I will break down. I cannot work forever. I will need money to survive. I need to start planning now or it will be too late.
Eventually, I may step off the audience riser and onto a half-full water bottle left behind by some 70-year-old, pension-earning, Medicaid-having, social-security-collecting, well-to-do groupie that comes to every show in her stretched limo thanks to her 50 years at a nine-to-five. I may slip, fall, twist my ankle and stub my go-finger. This injury could put me in the hospital for only a few days or it could lay me up for several weeks. Either way, with the tragic system known as the American health insurance complex, it’s going to cost me far more than two days’ pay and a 10-percent tip. A little slip up like this could cost me my livelihood. This little snafu could amount to a loss of wages that cripples my family. I’m wired to protect my wife and kids so I need to make sure that they can count on me. I need a mama eagle to look after my little nest egg the way she would her own hatchlings. Sadly, none of us are soaring eagles of the business world. If we had accounting degrees, we wouldn’t be in the box pushing game. We need help. Most importantly, we need help with our taxes, our retirement savings, health insurance and our exit strategy. This article will not help you with any of those things, but it will get you started thinking about them. I’m not allowed to give legal or financial advice but I can encourage you take the next step towards securing you family’s financial future.
Taxation is Theft (Kind Of)
The taxman is going to come and take as much of your hard earned money as possible. Freelancers, if you let him take 30 percent, he’ll take 31. You need to prepare your expenses and organize your income to maximize your write-offs. Personally, I am set up as an S-Corp. My corporation charges my clients and pays me as an employee. I earn a living wage. I am not in the top ten percent but I’m not sleeping in a shopping cart either. I was able to set up my S-Corp online, and I was registered in the state of Nevada as a business in good standing within six months of deciding to protect my assets. My S-Corp has a very generic name in case I ever decide to diversify my interests. Some people just use their name followed by an LLC or an INC. I went with Q3 Las Vegas INC. This allows me to show that I have an employer who is paying me a consistent wage. I can still apply for home and car loans without having to list every single freelance employer from the last six months. This also allows me to have my taxes closely monitored by my Certified Public Accountant (CPA). She loves and hates me. I am terrible about keeping track of my receipts and logging them, but my bank is really good at it. At the end of the year, I give her my box of receipts and my bank statements and I ask her to make sure that I don’t pay one penny more than my fair share. Without proper planning, you could get hit with an exorbitant fee at the end of your career. My opinion is that you make time to see a CPA about this area for your life. Consider it your annual financial check-up, like the annual visit to your doctor. I see my doctor regularly and I hope you do too because we’re talking health next!
Health Coverage
I need to be healthy. You need to be healthy. Staying healthy costs money. Getting healthy costs even more money. Making money is nearly impossible while we are sick. I am fortunate enough to live in Canada, a country with universal healthcare. I am covered there, but I also work in America. I am not as fortunate in the lower 50. I have to have health insurance while I’m in the U.S. One single slip in the shower, and I could be paying out my bruised wazoo for years to come. I use Cigna. Cigna is a worldwide health services organization. Three-quarters of my monthly bill goes to covering me for the entire world. The remaining quarter is just to cover me in the Land of the Brave.
Being uninsured in America is like gambling your health with a pocket two and seven off-suit. Eventually, you will get called, and you will pay up. If you can’t move to Canada, get some reasonable health insurance.
Save for Yourself
Every single penny counts. They may cost more to produce than they are worth, but if you save them up for years, they amount to more than a hill of truss bolt washers. When I was young and invincible, I would put things on my credit card that didn’t actually need to go there. My credit card was supposed to be for emergencies only but when I was cooler, a night out at the bars quickly became an emergency. It felt like free money until I couldn’t even afford the minimum payments any longer. I had to cash out an old 401K to pay it off, and I regret it. I had to pay early withdrawal penalties, and I just lost all of that money for nothing. Nowadays, I am slightly wiser and less inclined to spend $50 to get into a nightclub. My wife and I have been able to put aside a fair amount of money for both kids’ tuitions and now we are starting to save for ourselves. Forty is too late to start saving. Start now. Start by putting your money into a 401K, a savings account or even bury a few jars of per diem in the backyard. Rainy days are coming, and you need a rainy day fund. Talk to a financial advisor now. The older you, 10 years from now, will thank you for it.
Exit Strategy
I have several mentors in this business who I have seen happily retire, and I know some that will never be able to retire, willingly or otherwise. My good friend, Fraser Kerrigan, LD/programmer and owner of Cooperstown Escape Room and Event Escape Rooms, is the perfect example of a man with an escape plan. In addition to touring countless countries over 30 years in the game, he has also opened up an escape room in Cooperstown, NY. Fraser knows that he will have to take his final cue someday. When the light shuts off for the last time, he wants to be ready. “I knew it was time for me to start thinking of my life after lighting. It was scary at first, thinking I couldn’t make the same money, or that it would take so much time starting something from scratch,” he said. “But the transition is still happening, and there will always be bumps in the road, or a rumble strip in the middle of the night.” Fraser is prepared to step from one industry to the next when he has to. I recommend that you do the same sooner than later.
