Should Musicians Invest In Stocks & Bitcoin?
Many years ago, I was in a friend’s office in Manhattan and we were chatting about the new computers that he had just bought for all of the people in his office. Everyone was thrilled with the new powerful tools that they had, and the promise of the success it would bring them. He jokingly said to me, “I have bought so many of these computers over the years, you would think I would have been smart enough to buy stock in the company”. Something about what he said stuck with me over the years. He was basically saying that he was a loyal customer of this brand, he was a repeat buyer, and that because of people like him, the company was profiting. Maybe if he would have invested some money in that company, it would have paid for a few of those computers and then some. We have all heard quotes like, “If someone would have owned $1000 of Apple stock in 2008, when they launched the iPhone and had held it all these years, reinvested the dividends, the stock would be worth about $30,000 today.” But for many young people, knowing when to start, or how to begin to invest can be difficult, especially for people who never learned about it from their parents or other mentors.
So what does this have to do with musicians? On a daily basis, musicians and producers are bombarded with emails and ads from companies that are trying to get them to pay for various tools and services. Things like a new plugin that will make your mixes sound like the pros or a marketing campaign that will guarantee you 1000 Spotify plays. That plugin may actually help you tweak that vocal track and increasing your streaming plays may help you get more fans (or not), but 10 years from now, will you even remember the purchase? On any given day we are interacting with so many companies that have become indispensable to the DIY music community; recording music in a DAW (Apple), designing an album jacket in Photoshop (Adobe), ordering a new mic cable so it arrives tomorrow (Amazon), promoting your new music video (Facebook), driving fans to listen to your new song (Spotify). The list goes on and on, but if you look at the charts of any of these companies over the past year, you will see incredible growth, even during the pandemic. Products that musicians use every day are making many companies and investors a lot of money, perhaps it’s time that you did too.
Should Musicians Invest In Stocks?
A small weekly or monthly investment can grow over time and help to secure your future. Start with an amount that you can easily afford. Even $5-10 per week would be a great start. If you don’t have time to research individual companies then perhaps an ETF (electronic trading fund) might be easier for you. There are many funds out there that cover sectors that would be interesting for musicians. Take a look at ARK, for example. Their Next Generation Internet ETF (Symbol: ARKW) is an interesting technology fund that includes companies like, Tesla, Roky, Square, Spotify, Facebook, Pinterest, and even has Bitcoin exposure through Grayscale. There are many others like this out there, so you should do a bit of research and find one that works for you. The Robinhood app is a super-easy way to purchase stocks and ETFs. You can even purchase micro-shares in stocks which makes it a lot easier to buy stocks with prices that are out of reach. Be careful with it though! It makes it so easy that you almost feel like you are playing a game. This is real investing and stocks don’t always go up. Be smart, and invest for the long term. Trying to make a quick buck in the market is extremely risky.
Should Musicians Invest In Bitcoin?
Bitcoin has been on fire and people are starting to catch on that cryptocurrencies might be here to stay. Bitcoin has had explosive growth but it also a very volatile asset, meaning there can be huge price fluctuations daily. As the government keeps printing more and more money the value of the US dollar will steadily decrease over time. The dollars you have today will not be worth as much 2 years from now. If you want a hedge against the declining dollar, then Bitcoin might be a good option. Getting into it is easy, but I suggest you start slowly and only invest small amounts that you are willing to leave untouched for a few years. In the crypto world that would make you a Hodler. The simplest way to start is to open up a Coinbase account and buy $10 worth of Bitcoin. Now you are an investor and have skin in the game! Then start educating yourself. Just a few minutes per day on Youtube or reading blogs about Bitcoin will make you a smarter investor. Musicians have always been at the forefront of technology so it makes sense that blockchain and cryptocurrencies would be exciting. A great resource is a book by Jason Williams called; “Bitcoin: Hard Money You Can’t F*ck With”.
To be clear, I am not specifically recommending any stock or investment strategy in particular. There are risks with investing in stocks and Bitcoin, so do some research and homework and come up with a strategy that makes sense for you. The fact that investing and money management is not taught in High Schools is disgraceful. Every 18 year old should be graduating with a good commonsense understanding of money, banks, investing, and saving. Just sitting on the sidelines because you think you do not earn enough money as a musician is not an option. Start investing in yourself!
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