How Not to Waste a Windfall
(Black Enterprise) — Over the years, producer Chuck Harmony has worked with everyone from Celine Dion (“I Got Nothing Left”),Mary J. Blige (“I Can Do Bad”) and Janet Jackson (“Let Me Know”) to Keri Hilson (“Pretty Girl Rock”), Fantasia(“Bittersweet”) and Ne-Yo (“One in a Million”). In that time he’s seen overflowing budgets and newcomers blow their advances on expensive homes, cars and jewelry. In observing his colleagues’ ups, downs and pitfalls, Harmony’s views on finance, investing and, more importantly, how to save is very different than most. The creator of Los Angeles based Harmony House Entertainment shares a few of his financial tips for aspiring musicians and entrepreneurs with BlackEnterprise.com.
Advances…Act Like You Didn’t Get It: A big mistake that many new artist make is that they think the money will last forever. An advance is just that, it’s upfront money that you have to recoup. That’s why Harmony advises just putting it in the bank and saving some for Uncle Sam. “Put 50% into a separate account that you will not have access to just for your taxes,” he says. “Taxes are about 30% of your gross income. You’ll be doing yourself a favor. Remember, you’re never too rich to go broke!”