When a band begins to achieve success, money will start coming in. Young members of a band and people who are new to earning an income through music may not know how to manage the income from royalties and contracts. These four tips will help you to effectively manage your income.
Once money starts rolling in from your band, it is important to hire a financial advisor or an accountant that is independent from your record label. This finance professional can help you to manage your income from contracts and royalties. You may wish to divvy up your income into money that you can use now for your living expenses and money to invest for the future. An investment account could help to grow your income so that even if you take an early retirement from music, you will still have some money.
With luck and great marketing, you may be able to collect song royalties for decades. Some agencies, like ASCAP or BMI, know that every time your song is used or played, you should be able to receive royalties on it. The terms of your royalties will be included into your recording contract. You could have your royalties diverted directly into an investment account or a trust for future use.
Making an artist bio is an important part of the documentation you will need for future contracts. Your bio may include the instruments you play, your song credits and some details about yourself, such as what got you interested in music. Your artist bio can also be included in interviews and written articles about you or your band. You should also think about getting your band name trademarked, because another band could have the same one as you. By trademarking it, you keep yourself safe from legal repercussions and other potential problems.
Setting up a trust is another great way to manage your royalties and contract income. A teenage band can benefit from a trust because the income will be set aside and slowly distributed in the future. A trust can be invested and managed by an independent third party. Trusts must be set up with the assistance of a lawyer. Any money in the trust is protected from lawsuits and other claims against you.
Earning a living by doing what you are passionate about is a wonderful experience. By wisely managing your royalty and contract income, you can also set yourself up for financial success. With the help of an accountant, financial advisor and lawyer, you will be able to manage your band income without worrying too much about your financial future.