How To Handle Money As A Creator?

Creators, artists and YouTubers – the name can be anything but the problem is common. Money isn’t saved, invested or accounted for.

When you go to a salary job, there is a clear mandate from your company or the government to save some money. The reason is that you will not work forever and you are supposed to retire. And when you do so, you will need to have some basic income every month so that your rent, food and some basic desires gets fulfilled.

And of course, no one is going to give this to you for free. Your money invested today will get compounded and you will get the benefit when you are in the old age.

But what about the creators who don’t have a fixed retirement age. And perhaps they are earning way more than they ever imagined. How to deal with the finance?

The Forever Problem

The number one problem of any creator is the illusion that they are going to be working forever. Because most don’t and even if they do, they won’t earn the same or higher amount of money. Someone else will come to take their place and you will have to pack your career and shut down.

And we have seen this happen time and again. You are the biggest YouTuber once then someone else came along and then someone else came along. And now, you aren’t getting that much views. And for many the views stopped.

The key to financial understanding is to accept that you aren’t going to earn so much money forever and you will also need a retirement fund.

What Is The First Step?

The first step is to not increase your expenses as you grow. Of course, you will want to spend but let corpus grow linearly while your earnings grow exponentially. Let’s understand this with a simple example:

If you are earning $1 million and spending 90% of that money then you will have $100K as your savings.

Compare that with a person earning $500k and spending 50% of that money then they will have $250K as their savings. And at the same time, their expenses are $250k. So their savings will compound and generate enough when they retire.

But for you, $100k savings will take a long time to compound to account for your $900k expenses.

It is easier to not get into the habit of spending huge money then cut down from your habit.

More Income, More Investment

Since, you are earning way more than a salaried person, you need to invest a lot of that money. Because unlike a salaried person, you aren’t going to get that paycheck till you are 60. And you will need that money more sooner than other people.

As a creator, you will work for 10 years at your peak and then earn 1/10 of your income in the next 10 years. This is the most common scenario. Prepare yourself for the downtime and you can sail forever.

Money is a tool but you need it till the end of your life. Avoid the scenario of you going back to the salary job you dread so that you can make the ends meet. Save and invest enough that your basic needs are at least met. And you will forever be a creator, doesn’t matter if you are making a bank or not.

Now, go and invest in a retirement fund.