Many photographers who end up shooting for a living did not start out with that end in mind. They picked up a camera at first, purely out of curiosity or a desire to capture what they saw in front of them. All are motivated by the art to some extent, but some begin to wonder if they might be able to turn their artful pursuit into a profession. The good news is that they’re doing it; just look in the yellow pages under Photographers – we’re everywhere. We are not all destined to be the next Salgado, Demarchelier or Liebowitz, but many of us are able to make a decent living all the same.
So you’ve taken the plunge, are steadily building your clientele, and are generally keeping yourself very busy building your business. Your calendar and your bank account are beginning to show some signs of life, and things are looking up. Congratulations! You are doing what many people only dream about – building your own enterprise from the ground up. The hours can be crazy and the money uncertain, but it’s YOURS, and you should be proud. So as you move forward, make sure you give some serious thought to your bigger financial picture. Independence in your career is great—but it also means that you are now much more dependent on yourself for things like health plans, insurance and saving for the future. So to help you on your way, here is a list of basic financial issues that you should address.
1 – Think (way) ahead
At some point, all of us are going to stop working. That, we know. We don’t know when that will be – it can either be the day we die, or 30 years earlier, but it will happen, and the good news is that we have some control over it. In order to make that process as enjoyable as possible, it’s IMPERATIVE that you begin to put a bit of money away on a regular basis.
In any small business there can be huge fluctuations in monthly income. This requires those of us who are not on a steady salary to be extra vigilant with our money. As best you can, keep your mindset as one of a business owner, and concern yourself with monthly expenditures as opposed to yearly ones. If you work on a contract or commission basis, it is too easy to put off things like saving for your future – we get sucked into the thought that if the ‘next one’ is lucrative enough, THEN we’ll put something aside.
it is too easy to put off things like saving for your future – we get sucked into the thought that if the ‘next one’ is lucrative enough, THEN we’ll put something aside. 
it is too easy to put off things like saving for your future – we get sucked into the thought that if the ‘next one’ is lucrative enough, THEN we’ll put something aside. 
Problem with that is, the ‘next one’ always seems to shrink in our estimation when it’s actually in our hot little hands. Make a HABIT of putting an amount away for the long-term future no matter how small it may be. This will be the hardest part, I guarantee you. Going from 0 to 25 dollars a month in savings is way harder that going from 25 to 50, or even to 100.
Get this first hurdle over with, and you’ll be on your way. For your nest egg, ask your insurance professional about segregated funds, as these have the potential of providing creditor and liability protection in the future.
2 – Stay Liquid
Okay, now you’ve all run out and started 25-dollar savings plans. FANTASTIC. The next thing on the agenda is to not shoot yourself in the foot for the short term, either. Liquidity, or access to cash, is an important piece of our financial plan.
During the course of your life many needs are bound to arise – times you need to access some cash. In addition to this, you are likely to be faced with opportunities you might like to take advantage of. You have heard that it’s a good idea to keep a float equal to 3 months’ income readily accessible. In working out your financial plans, in addition to the funds you keep in your RRSP, I generally recommend opening another mutual fund, but one that is much further to the conservative side than your retirement plan.
3 – Plan for the Worst
Think for a moment about what you consider your most valuable asset. Your new digital back? Your computer? Your house? No, no and no. The correct answer is your ability to work. If you are 30 years old, earning 3000 dollars per month, your future salary will amount to nearly 2 million dollars. Can you imagine having a piece of equipment of that price and not taking steps to protect it? Of course not.
If you were to become sick or injured and unable to work, what would happen to your future income? Could you cope with three months without work? (See # 2 – the answer is you should!) What if this period extended to a year or more? The frightening news is that prior to age 65, 1 in 3 of us will at some point become disabled for more than 90 days, and the average length of disability that lasts more than 90 days is 2.9 years. What would that amount of work lost do to you? We can plan for shorter illnesses, but the more serious unforeseen disabilities require a more serious sort of planning. You need a disability plan.
If you are independently wealthy, you may be alright. If you are planning on winning the super 7, good for you. If you do not fall into these two categories, plan to see an insurance agent or broker to discuss your options. They say hindsight is 20/20, but we know from experience that people’s life savings are wiped out due to disability all the time. You owe it to yourself to have some security in this area.
4 – Plan your Exit
For many of you reading this, you may not have much inclination to think about what happens when you die. However, some of you may have children, families, or other people that would be seriously financially put out if something were to happen to you. If so, it’s very simple: figure out how much insurance you need and what type in order to provide for those you care about. However, some of you may not have a current need, but one in the foreseeable future. In this case, you have three options.
1) Get a ton of life insurance now.
2) Wait until you REALLY need it and hope you still qualify.
3) Start a small plan now, which can grow with you over the phases of your life.
The first option would be silly and an unnecessary expense. The second (and most popular) option is to wait and put it off until they ‘really need it’, only to find that due to their age and health, they are either uninsurable or insurable only at a significantly higher premium. The third option is what I suggest. You can have a policy that starts out small and relatively inexpensively, and build into it the option to increase your coverage at a later date without having to qualify medically. This may seem boring now, but being insurable is worth its weight in gold in the long run.
Start now. Look through the phone book and assess what’s available in your area. You will come across many different service providers, some highly specialized, (like “estate planners” and “wealth managers”) and others with a more holistic approach, offering many of the services you might need in one place.
You are free to have as many advisors as you wish, but try to keep like business with like advisors, i.e. don’t have RRSP accounts at 4 different places, as this will only confuse you when it comes time to analyze your portfolio. Maintain a balanced approach to financial security that focuses on the four areas mentioned above.
Once you’ve set your plan in motion, take a step back and let it go to work. Don’t check on it too often – quarterly should be plenty. You’ve got better things to worry about! Instead, go grab your camera and get back to what you do best. With a little bit of foresight, Financial Security is within everyone’s reach.