Financial Planning For Musicians

4.1

Setting clear financial goals provides immediate motivation and direction, especially when planning for short-term needs like funding an album, purchasing new gear, or booking a tour.

Our tip? Don’t wait until the goal is fully achieved to celebrate. Set smaller milestones and reward yourself when you hit them. This keeps the momentum going and gives you a psychological boost. Here’s a practical guide to set and achieve those goals effectively:

Setting & Achieving Goals

    • Specificity: Write down what exactly you’re aiming for. Vague goals like "I want to save more money" don't work. Be specific—"I want to save $5,000 for new recording equipment within the next 12 months."

    • Measurable: Attach real numbers. This allows you to track progress.

    • Time-bound: Set deadlines. A goal without a timeframe is just a wish.

    Example: "I need $2,000 for a new instrument by June 2025."

    • Reverse-engineer the total amount you need. Divide it by the number of months or timeframe you have until your deadline.

    • Example: If you need $5,000 in 12 months, that’s $417 per month.

    • Write it down: Keep it somewhere you can see daily—sticky notes on your desk, a reminder on your phone, or a journal. The act of physically writing it down makes the goal more real and keeps it top of mind. The NZSC team use vision boards! We make those our backgrounds on our desktops, phones, everything.

    • Track your progress: Update your progress each month. Seeing those savings grow adds motivation and keeps you accountable.

    • Income Breakdown: Identify how much money you need to save from each performance or revenue source to meet your goal.

      • Example: If you earn $2,000 per month from music work, plan to set aside 20-25% of that income for your goal.

    • Cut Back Where Possible: Look for areas where you can temporarily cut expenses (e.g. dining out, subscriptions) to funnel more towards your short-term goal. You don't always need to have everything you think you need.

  • The only person you will ever need is you.

4.2

Long-term Financial Planning

When it comes to long-term financial planning, musicians often overlook the importance of setting up strong, sustainable systems to secure their future. Whether it's planning for retirement or growing savings steadily, there are practical tools that can help.

Two key strategies to consider are leveraging KiwiSaver for retirement and utilising the power of compound interest through a High-Yield Savings Account (HYSA). Let's explore how these can work for you.

  • Concert scene with a large crowd of people dancing and raising their hands while stage lights and beams illuminate a performer and DJ in the background. NZ Session Collective Session Musicians.

    KiwiSaver

    KiwiSaver is a key retirement savings tool in New Zealand, even for self-employed musicians with fluctuating income. It's important to understand your options to make the most of it. Sorted offers a suite of tools that can help you navigate these decisions.

    Their KiwiSaver Fund Finder allows you to compare various KiwiSaver funds based on performance, fees, and risk level, ensuring you pick the right plan that aligns with your long-term goals.

    Government Contributions: Even if you contribute only a little, the government will match up to $521 annually if you contribute $1,042, which is a great incentive to stay consistent.

    Fund Choice: Different funds (growth, balanced, conservative) offer varying risk and return levels. Sorted's calculator helps break down which fund is best suited for your lifestyle and risk tolerance.

    Additionally, Sorted offers calculators for budgeting, debt repayment, and retirement projections, empowering you to make informed decisions. Using these tools can help set the foundation for your long-term financial security.

  • Two women playing violins with a music stand behind them, one woman in the foreground wearing a black lace dress and the other with a faint smile, both focused on their instruments. NZ Session Collective Session Musicians.

    High-Yield Savings Accounts

    Compounding interest is one of the most effective ways to grow your money over time, even with small contributions. For musicians with variable income, a High-Yield Savings Account (HYSA), like the Heartland 90-Day Notice Saver, provides a safe and effective way to save for the future while earning interest.

    Heartland 90-Day Notice Saver:

    Interest Rate: 5.60% total interest with interest calculated daily and paid monthly.

    Flexibility: Requires a 90-day notice to withdraw, helping prevent impulsive withdrawals while still providing access to your funds.

    Minimum Opening Deposit: $0, making it accessible regardless of your current financial position.

    Compound Interest: By keeping your money in the account and letting interest compound monthly, even small deposits can grow significantly over time.

4.3

Investments for Musicians

Investing doesn’t have to be as complicated or risky as it’s often portrayed. In fact, building wealth through smart, long-term investments is straightforward when you understand the basics and choose the right tools.

Platforms like Sharesies make investing accessible for everyone, even with small amounts of money, allowing you to buy into major markets easily.

How Investing Actually Works

Investing is fundamentally about buying assets (stocks, bonds, funds, and more) that grow in value or pay you returns over time. Here’s how it works in a no-nonsense way:

  1. Buying Stocks (You Own Part of a Company): When you buy a stock, you own a piece of a company. If the company grows, your stock value increases. Over time, the market typically trends upward, so patience pays off even if prices fluctuate in the short term.

  2. Index Funds & ETFs (You Own a Basket of Companies): These funds give you a stake in many companies at once, reducing risk. If some companies underperform, others often balance it out, providing more consistent returns than betting on individual stocks.

  3. Bonds (You’re a Lender): Bonds are loans you give to governments or companies. In exchange, they pay you interest and return your principal when the bond matures. They’re less volatile than stocks, making them a stabiliser for your portfolio.

The Fear of Market Fluctuation and Risk – Debunked

Many fear market volatility and the idea of losing money, but the truth is, fluctuations are a natural part of investing. Over the long term, the market tends to grow despite short-term dips. A well-diversified portfolio reduces the impact of any single market drop. The key is staying invested during rough patches—long-term, that’s how wealth is built.

Platforms like Sharesies make it simple to get started with minimal amounts, and with the right mix of investments, you can grow your wealth steadily and securely over the years.

Key Investment Picks

  • S&P 500 Index Fund (VOO)

    • Overview: Tracks 500 of the largest U.S. companies like Apple, Microsoft, and Amazon.

    • Why It’s a Good Pick: Historically strong long-term performance tied to U.S. economic growth. Provides broad diversification across sectors with a low expense ratio, making it a core holding for most portfolios.

  • Vanguard Total World Stock Index Fund (VT)

    • Overview: Invests in global stocks across both developed and emerging markets.

    • Why It’s a Good Pick: Offers global exposure to mitigate risk tied to any single economy. Ideal for investors seeking broad diversification and access to international growth.

  • Vanguard Total Bond Market ETF (BND)

    • Overview: U.S. government and corporate bonds spanning the full U.S. bond market.

    • Why It’s a Good Pick: Provides safety and stability, especially useful during equity downturns. Core bond holding for risk management and steady income through interest payments.

  • Vanguard Total World Bond ETF (BNDW)

    • Overview: Global bond exposure including U.S. and international bonds.

    • Why It’s a Good Pick: Diversifies bond holdings beyond U.S. borders, reducing risk from regional economic volatility. A solid choice to balance portfolio risk on a global scale.

  • Vanguard Real Estate Index Fund (VNQ)

    • Overview: Invests in REITs, which hold income-producing real estate.

    • Why It’s a Good Pick: Adds diversification with exposure to real estate, a distinct asset class. Potential for steady dividend income and portfolio stability through real estate’s different market behavior compared to stocks and bonds.

  • Vanguard S&P 500 Value Index Fund (VOOV)

    • Overview: Focuses on value stocks within the S&P 500.

    • Why It’s a Good Pick: Targets undervalued companies that may have greater upside potential. Balances growth stocks by adding exposure to stocks trading below their intrinsic value, often providing stronger returns in bear markets.

  • Vanguard Total International Bond Index Fund (BNDX)

    • Overview: Invests in investment-grade bonds outside the U.S.

    • Why It’s a Good Pick: Provides exposure to international bonds, offering protection against U.S. interest rate and currency risks. Ideal for those looking to enhance bond diversification globally.

4.4

Musicians Mindset: You as A Business

As a musician, your craft is your product, and your name is your brand. By embracing an entrepreneurial mindset, you gain control over your career and financial future. It’s about shaping your art in a way that allows you to grow, not just as an artist, but as a business.

Here’s a note from our CEO, Ken Naidu, which may be the most important part of our Musician Wealth Book.

Eunoia - by Ken Naidu

You’re not just a musician. You’re a business. That might be a difficult thing to accept, but once you do, everything changes.

The Epiphany Moment

Imagine this: You’re playing a show. The audience is enthralled, you’re in flow, the room is blurred, you feel deeply connected to your passion, and the night ends with a rush of applause.

You’re making your way home. The air tastes different, your ears are ringing, and you’re smiling to the sky. You feel live.

But then you open your banking app.
The money doesn’t quite match the applause, does it?

The high from performing doesn’t pay the rent, doesn’t pay the phone bill, doesn’t give a rats ass about your dinner on Saturday, and doesn’t care that you have a stomach. It also doesn’t fix the busted amp, or fund your recording session. You get what I mean.

Suddenly you’re thinking: What am I doing wrong? What is the universe trying to teach me?

And that’s the moment it hits you. You’re not just a musician, you’re a business. It’s not about sacrificing the art. It’s about reframing it, and respecting it enough to give it a structure—a foundation that can last. So how do you do it?

Close-up of an open vintage piano with keys and internal strings visible, topped with a small glass vase holding pink flowers, in a well-lit room. NZ Session Collective Session Musician.

Lesson One: The Brand You Didn’t Know You Had

When you play live, or release an album, it’s easy to think the music is everything. But here’s the truth: people aren’t just buying the music—they’re buying you. Your name, your story, your vibe—it’s all part of the package. You are the brand.

Take a second to think of some big names in the music industry, as well as your own favourite artists. Of course, the music may sound great, but their image, their personality—that’s what creates the connection. Once that human connection is there (albeit parasocial), people keep coming back. They like you :)

So the first step?

Get intentional and purposeful about your brand. Every performance, every social media post, and critically, every interaction is a piece of your brand. You’re telling a story with each one, whether you realise it or not. The sooner you embrace that, and see through that, the sooner you can start shaping it.

A vintage piano with framed artwork on the wall above it, a globe, and picture frames on the piano. Two small wooden stools are in front of the piano. The artwork includes various posters and illustrations in colorful frames, with some featuring music artists and others abstract designs.

Lesson Two: Pricing Your Art Like A Product

I was talking to a musician friend, and we were on the topic of rates. I asked “What’s your rate?”

He hesitated. “Rate? I usually just take what I can get, or whatever they offer”

Here’s the thing—if you don’t value your work, do you think anyone else will? You need to price your time and services the same way a business would price its products. You’re not just trading time for money; you’re charging for years of practice, your skill, intellectual property, human expertise, and the experience you bring. Understand your worth and demand it, but do so kindly.

It doesn’t just mean live performances. Do you have a rate for corporate events? Private events? A Festival perchance? How about teaching? Every part of what you do holds value. Get serious about defining that value—because if you treat your work like a commodity, others will too.

Living room with beige walls, a black grand piano, beige armchair, bookshelf, and modern lighting fixtures. NZ Music Directory, Musician Financial Management

Lesson Three: Diversify or Die (Financially)

Risk is natural, but relying on just one income stream? That’s a risk that behaves differently. Playing live is great, until it isn’t. We both know how unpredictable music scenes can be. Sometimes the work dries up, the market fluctuates (or tanks), and people stop turning up for live music. What happens then? Oopsie daisies.

Build multiple streams of income if you’d like to thrive long term. Playing live can be one. How about licensing your music to screen? Or releasing music to build royalty income? Have you looked into Arts Management? You’d be surprised at how well you could do.

The more places you have income coming from, the less panic when one of them dries up.

Food for thought: start small. Pick one new income stream to focus on for this year. Perhaps it’s teaching. Passing on your craft, and the things you’ve learnt. I’ve always found that quite beautiful. The key is to keep your financial base as broad as your creative output.

A spacious, vintage living room with wooden ceiling beams, chandeliers, and antique furniture including sofas, a desk, and a chair. Gold curtains adorn the windows, and warm lighting creates an inviting atmosphere. NZ Music Directory, Musician Financ

Lesson Four: The Art of Marketing and Networking

Here’s where I’ve found our industry and artists to stumble. You’ve got the music, but what’s missing? Eyes and Ears. Trust me, there’s a lot of them out there. You need people to see you, hear you, talk about you.

The best way to do that? Master marketing and build real relationships.

Let me be clear: Marketing isn’t selling out. It isn’t obsessing over metrics and ROI. It isn’t a granular 3-year corporate strategy which tries to quantify the future. Don’t let 2024, nor any year for that matter, fool you.

At its core, marketing is human psychology. Marketing is behavioural science, and social engineering. Study that. Befriend that. A metric that becomes a target loses its value as a metric. Tell your story in a way that reaches the right people. Social Media is your tool kit, and your website is your storefront. Own your visibility.

My journey as a human, and the transformations I’ve undergone from simply being alive have highlighted the overwhelming value of networking. Get in front of people, and talk to them. Connect with them. You can learn something from anyone. It’s not enough to be talented—you need to be connected. Call that venue owner. Email the producer. Hire the backline. Hit up other musicians and collaborate. Relationships are as important as the music.

An elegant vintage room featuring a harp, upholstered chairs, and intricate wood paneling next to a large window with curtains. NZ Music Directory, Musician Financial Management

Lesson Five: Think Like A Business, Act Like An Artist

Eventually, you will realise something critical: Thinking like a business doesn’t kill the creativity, it sustains it. When you approach your career with a business mindset, you’re really safeguarding your creative freedom. You’re giving your music the resources it needs to thrive.

Your creativity is your greatest business advantage. Businesses thrive on new ideas, fresh approaches, and as I’ve coined this section, “Eunoia” which means beautiful thinking. As a musician, you’re wired for out-of-the-box thinking, let your brain loose. You have some impeccably strong Intellectual Property up there, waiting to be tapped into. Take the same creativity and apply it to the business side.

Build a sustainable system for your art. Set up beautiful processes whether booking gigs, managing finances, or engaging with the industry. At some point, with persistence, your “hobby” becomes a career. That’s when it’s time to treat it like one.

A room with a grand black piano, a piano bench, two large windows, a potted plant, and ornate ceiling details. NZ Music Directory, Musician Financial Management

The Takeaway: Building For Longevity

This isn’t a sprint—it’s a marathon. The musicians who succeed (whatever definition that may have to you) are the ones who build systems, who diversify their income, who market themselves with purpose, and who value their art enough to give it structure.

Some of the best advice I’ve received so far?

  1. Believe nothing that you hear and only half of what you see.

  2. Don’t cut corners, and be kind. The kindness will pay itself back to you.

The next time you’re stepping into a performance, think of yourself not just as a musician, but as a business owner. That particular event? One small part of a much bigger machine. You’re in control of that machine. Your music is the fuel. The better you feed your engine the further it will take you.