The Profitable Artist by New York Foundation for the Arts

Author:New York Foundation for the Arts
Language: eng
Format: epub
Publisher: Allworth Press
Published: 2018-07-08T16:00:00+00:00

Figure 11. Sofia Garcia Financial Planning X-ray, courtesy of Julian Schubach.

CHAPTER 9

Managing Your Money for the Future

Following her success receiving the two grants worth $35,000—and the resulting tax ramifications—Sofia Garcia sat down with an accountant to better structure her finances. The accountant helped her to understand the importance of saving for retirement, deducting expenses, and reducing her tax burden. As you can see from Sofia’s “X-ray” in the previous chapter (figure 11), she has a checking account with $5,000, a savings account with $10,000, and an investment account valued at $12,000. She also has $15,000 in a retirement account, and with the grant money coming in, the chance to build up her savings more. She scheduled a meeting with a financial planner who showed her that her accounts were stagnant, growing each year only by the amount of her contribution. While her accountant had made good recommendations about her beginning to save and reduce her taxes, she had not yet received any advice about how to invest in each of her accounts so that she could maximize her savings. As we travel through this section, we will go over what Sofia learned during her meeting with the financial planner: the importance of meeting or exceeding inflation each year, risk tolerance, types of investments and asset classes, and the importance of building a team to help guide you through financial, accounting, and legal matters you may not know.

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