Stop and think with me for a second: where do people who know how to handle money learn that skill? It's not taught in school. There's no special segment on Sesame Street. I'll give you a hint: who knows how to handle their money best? The wealthy do.
An interesting fact you may have noticed about the wealthy: many of them had wealthy parents. While it seems obvious that people who inherit money will become wealthy, there's much more to the story than that. Having money is not enough to make you wealthy; you have to know how to handle your money as well. Consider, for instance, the multi-million dollar lottery winner. How many times have you heard the story of the lottery winner who cashes out and immediately spends money the way he thinks rich people spend money? Five years later, he's back exactly where he started.
Can we agree that having money is not enough to give you financial security for the rest of your life? Can we agree that managing money is an important skill in this equation? That if someone knew what to do with ten million dollars, he would never need to work again for the rest of his life?
Back to the original question: where do people learn to handle money? You've probably figured it out, but here's the answer anyway: the wealthy learn from their parents. People who know how to manage their money recognize that it's an important skill; they teach it to their children.
Consider your own family's financial history, ADA. Your grandparents were poor and raised during the Depression. Their financial plans were essentially, "Keep it in a coffee can under the bed." They knew to save and to plan for hardship, but they didn't consider scary things like inflation. They didn't trust banks or the stock market. They didn't really understand enough about money to take advantage of their retirement plans. They lived in fear of money, and so they were very frugal.
Your parents were Boomers. They had grown up with parents who didn't want to indulge them, and as soon as they got jobs, as soon as they had disposable income, they started blowing it on things that they thought would make them happy. "Finally! We're adults! We can buy all the toys we want!" Look at the house your parents live in. Look at the cars they drive. Look at the $1000 rug they have in their living room. Look at the myriad of $20 DVDs your dad has on his shelf. Your parents are not at all bad people, but they do love toys. Also worth noting: they did not teach you to manage money, because they did not know how.
So it's only natural that you should buy a car, only to have it repossessed a couple of years later. It's only natural that you should have to work almost-full-time while you go to school. It's only natural that you should have no idea what a bond is. It's only natural that you should have no idea how to plan for retirement.
Normally, this wouldn't be a concern. You'd grow up and get a job where you could safely live paycheck-to-paycheck. You'd be able to pay rent, possibly even buy a home with the help of your wife/ girlfriend/ sex slave/ whatever it is you're into in that alternate dimension of yours. You'd have money troubles, but they wouldn't be terrible until retirement came around. Hell, you might even experience moderate success.
But ADA, you are doubly screwed, 'cause you got into the arts. There will be little or no stable income for you. You're probably waiting tables or doing some other job for which you are grossly over-qualified, but underpaid. That's what artists do, since they, you know, have to pay rent and eat and all that jazz. The problem is that you will be barely squeaking by until one of the following happens:
- You make it big.
- You are too old to work anymore.
In the case of number two -- unfortunately, the more likely outcome of the two -- you'll just have to... I don't know, live on the street? Choose between medical care and food? Just rely on social security (I hope you're at least in touch enough with politics to realize how much of a joke that is)? Basically, it's way the hell too scary to think about.
But your parents didn't teach you personal finance, so you should be completely off the hook, right? Natch, that is the stupidest thing I've ever heard. You're entering a career for which it is even more important that you learn to manage your money well. You're going to go through a lot of dry spells, and if you don't have a nest egg, don't have some kind of security, you're going to be completely screwed.
Listen, man. I know you don't want to be rich. I imagine you don't have any qualms with being rich, but I understand that it's not the highest priority for you. And that's great. I feel the same way. I'm not sayin' you have to be rich. I'm saying that you need to have a plan so that you can eat, have a place to sleep, have medical care, and so forth.
Conclusion, ADA: you know less than you think about personal finance, 'cause your parents never even taught you the basics. Only reason I know anything is because I've been teaching myself. And every time I learn something I think, "Fuck! Is there even a chance that ADA knows about this shit? Probably not." It is up to you to learn, Bro, because no one else in the world is going to take care of you. In fact, I think very few people are going to be sympathetic to your case, since you've chosen to be an artist. The "Real World" thinks that artists bring their awful financial fates onto themselves.
Just sayin', it's worth learning. We cool, ADA? I thought so.
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