Let’s look at some of the richest people in the music industry and see what lessons we can learn from them that we can apply to our own retirement planning.
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Transcript Of Today's Show:
Speaker 1: Hey, everybody. Welcome into this edition of Plan With The Tax Man. Thanks for hanging out with Tony Mauro and myself as we talk investing, finance, and retirement. In this go round on the podcast, going to have some more fun with some interesting analogies. We're talking money lessons we can take from rich musicians. Maybe bring that down to a level of number that resonates with us, not some of these crazy numbers I've got before me. But we'll have a little bit of fun with this and let Tony give us a couple of lessons here and there. And Tony, this is podcast number 43. I guess our podcast is, what, middle-aged now?
Tony Mauro: Well, I guess so. And with some of these musicians in here, it's going to date me.
Speaker 1: Oh yeah.
Tony Mauro: Because a couple of my favorites, and I love music.
Speaker 1: Okay, well, good.
Tony Mauro: I always have loved music.
Speaker 1: Well, fantastic. Well, then, we'll have some fun with this and I'm going to let you take, like I said, distill this down to a level that'll make sense for us that don't quite have some of these numbers in our bank accounts, but we'll have some fun. All right. So let's take a look at these rich folks and see what we can take from it.
Speaker 1: Andrew Lloyd Webber. Are you familiar with who that is? Our listeners as well, do you know who that is?
Tony Mauro: I do know who that is. Yes.
Speaker 1: Okay. And that-
Tony Mauro: Yes. But probably not all the listeners don't, but yeah.
Speaker 1: Okay. Go for it. I'll let you tell.
Tony Mauro: Well, I mean, he created The Phantom of the Opera.
Speaker 1: Right. Big playwright.
Tony Mauro: Yeah, which I think everybody knows that one.
Speaker 1: Phantom, what, Cats?
Tony Mauro: Cats, Jesus Christ Superstar.
Speaker 1: Yup. Some biggies.
Tony Mauro: I mean, those are the big ones that I'm familiar with.
Speaker 1: Okay. I got a couple of tidbits for you on Andrew there. He's technically listed as the richest musician in history.
Tony Mauro: [crosstalk 00:01:36]
Speaker 1: I would've thought it would've been McCartney or something, or-
Tony Mauro: I would have thought it would have been McCartney or Elvis. Yeah.
Speaker 1: Yeah, but no. Now they have a range. It apparently ebbs and flows, right, like anything, but somewhere between 900 million and 1.2 billion.
Tony Mauro: Really?
Speaker 1: ... is his net worth, and so, yeah, he's not hurting. He's doing all right.
Tony Mauro: No, he is. I mean, and some of these other names on here, yeah, the numbers are staggering with what they've amassed, and we've only done four or five of them here. I mean, you got The Rolling Stones, you got [crosstalk 00:02:10]
Speaker 1: Oh yeah, we could go on. Yeah.
Tony Mauro: You'd go on and on with these bands, and the massive amounts of money that they've made over their lifetimes. A lot of them, and perfect example is KISS, one of the bands from my era, they've really done a job of, they are their own market, you know?
Speaker 1: Sure. Oh, for sure. They are marketing kings. Yes.
Tony Mauro: They're a brand. I just read it on sign. I think I'm going to get it. It's from Success Prints. And it was from Jay Z and he said, so it's a quote, he said, "I'm not a businessman," he said, "I'm a business ... man," which is true. He is a business. He's a brand.
Speaker 1: There you go. Yeah. Well, that's, that's kind of how we pick these folks. A lot of these folks are kind of brands, right? And so, let me give you one more tidbit about Andrew Lloyd Webber, and then I'll have you give us a little lesson for you.
Speaker 1:
What he did, very smartly, not only has he made a lot of money off of creating these things, but the way he's licensed them. He set up a company back in 1977 that ensures that he gets a share of the profits of his work in any form. So, movie, play, Broadway performance, soundtrack, including even the ticketing agencies and the venues, the doors themselves, so pretty interesting. Where would you kind of look at that if you were saying, "Okay, I've got this guy as a client. What's his focal point?" Where would you go with that?
Tony Mauro: Well, he's a classic example of somebody that has created multiple income streams to make sure that he's got money coming in from all kinds of places.
Speaker 1: Nice. Okay.
Tony Mauro: And I'd probably say, I don't know what the stat is, but I would say it was probably high. Most Americans don't have any clue of even how to do this, let alone actually doing it.
Speaker 1: Great point, yeah.
Tony Mauro: Most people go to work for somebody for 30, 40 years and their paycheck is their income and they don't have any other sources of income. For those that are really, I guess, I don't want to say go-getters, because everybody's always looking for more income, it seems. But you know, you need to, if you're going to tie it to the investment world a little bit, besides saving for the big goals, retirement and whatnot, it might be possible that you use some of your investments to produce another stream of income for you before retirement.
Tony Mauro: Now, most people are going to say to that, "Well, I don't have the money. Everything goes out and I'm barely able to save maybe for retirement." So maybe that's not the case for you. Maybe it's something else. Maybe it's a side hustle. Maybe it's, I don't know, a different job, a second job maybe. So you just got to kind of put on your entrepreneur hat a little bit and think about things, and a great book about it is Rich Dad, Poor Dad, the cashflow quadrant, and trying to get yourself to the truly wealthy. Because the truly wealthy have money coming in and they're not even working, and I'm not talking about Jeff Bezos and Bill Gates. I mean, those are those guys, but-
Speaker 1: Yeah, folks who we've never heard of, but yeah.
Tony Mauro: Yeah, that you never heard of, and they're making money while they're sleeping, so to speak, and that's harder to do than it is to say, but it's worth pursuing.
Speaker 1: No, that's a great point. Because again, it's all about the income streams. "Income is the outcome," I heard someone say that. I thought that was pretty good when you're talking about your retirement plans and your retirement journey, the income is the outcome. So, whatever you want the outcome of your retirement to be, it's going to be based around the income. If you don't have very much, well, your retirement may be suffering because of that. So, income stream is certainly key. Great lesson there from Andrew Lloyd Webber and Tony on that.
Speaker 1: Let's move to our next rich musician here, and we'll go with Bono. I can't remember what his real name is, Paul something or another, but anyway, Bono from U2, obviously. Are you familiar with that?
Tony Mauro: Right. Oh, yeah. Know him well. I love the band. They've been around forever, just [crosstalk 00:06:05] money and earning money.
Speaker 1: A long time. Oh, yeah. He's worth roughly around 600 or 700 million, and he's made, Tony, his foray is not just for music. This is pretty interesting. Back in the day, about 15 years ago, he was a major investment ... investor, excuse me, in Facebook's IPO when that launched. Of course, they've had many a tour where they've made a lot of money, about 800 million estimated from their last tour a number of years ago, the 360° Tour, at the time making it one of the biggest musical tours in history. And so, he's just got a lot of other investments. He got a clothing line, he's got a five-star hotel. He's got multiple things going on. Kind of to your point earlier, he doesn't necessarily have to play music.
Tony Mauro: No. And you know, like Andrew Lloyd Weber, I mean, not only does he have multiple income streams, it goes to the next thing of he's got that and he's diversified. If the music ... because, I mean, some day he's not going to be ... he's just going to get ... Some of these aging musicians, they can't [crosstalk 00:07:03] do, yeah.
Speaker 1: You mentioned The Stones, right, except for The Stones. I don't know how they do it, but other than that, yeah.
Tony Mauro: I don't either. But you know, these guys, and Lord knows some of them have lived a harder lifestyle than others back in the day. But you know, I mean, age catches up with everybody, even if you're taking care of yourself. And he's diversified himself to a point where he's got income streams coming in. So like you said, if he doesn't or can't do any more music, he's still going to be able to make a lot of money. And you know, of course, all of these people are set for life, assuming that they manage it correctly, but-
Speaker 1: Right. Well, for every Bono there's a Prince or an Aretha Franklin, right?
Tony Mauro: Well, yeah, good point, good point.
Speaker 1: You know, he didn't have a will, didn't have a trust.
Tony Mauro: Nope.
Speaker 1: So then everything gets contested and fought over, so yeah.
Tony Mauro: Yeah. So, I think the big lesson here really, besides multiple income streams, is diversifying out of your main income stream, something unrelated to that. But even for me, I have a tax and accounting/financial planning business, but I also own some apartments, and I am a minority owner in my brother's insurance business.
Speaker 1: Oh, okay, yeah.
Tony Mauro: So unrelated, but yet other income streams. It helps if one is, just like investments, one's kind of doing poorly, the other one's generally doing okay, and they flip-flop around lot.
Speaker 1: That's a great way of looking at that. It's kind of like the different buckets, right, when you're talking about your investment strategy. And yeah, to your point earlier, Tony, I mean, you don't have to be a celebrity or a rock star to have multiple income streams and to diversify where your money's going to be coming in from as we get closer to retirement. And I think you had it really right on the head with people just don't know how, or they think that's only for those kinds of people, and it's just not. I mean, you can be a tax doctor in Iowa.
Tony Mauro: Yeah. You know, a lot of people ... I think the biggest thing that most people have as a barrier when we're talking about this is one, they don't think they have any talent to do anything else.
Speaker 1: Yeah, great point.
Tony Mauro: And they're afraid because there is a little bit of a risk. And two, it's actually ... And these people have worked tremendously hard to get to where they were at.
Speaker 1: Sure.
Tony Mauro: Plus they have God-given talent, but it's a little extra work. And even if you're doing a little side hustle where, let's say, you're just selling ... I don't know. I use the old Tupperware. That dates me a little bit, but you know, if you're going to go out and sell that and there's all kinds of things that are being sold at those kinds of parties anymore, but you know, it's work. It's extra time out of your schedule. It's extra stress. It's extra, I've got to pay for this or that before I make any money, and I think that scares people too.
Speaker 1: Yeah. I think fear is a great way of looking at that. That affects us in any kind of walk in life when it comes to money. And a lot of folks are okay taking chances. I mean, small business owners take a chance every day. And so, it's a different breed sometimes to want to be a small business owner or an entrepreneur, even if it's not an active business, to your point about maybe just investing in a friend's or family's business of that nature. And of course, as always, you want to make sure that you're checking that against your financial plan and retirement plan if you're considering doing something like that-
Tony Mauro: Yes.
Speaker 1: ... to make sure that it's the right move for you. And like anything you never want to invest more than you can afford to lose because that's just the nature of business in general. Well, good. Some good stuff here on these lessons.
Speaker 1: I'm going to jump to the last one just for a minute, but if we have time we'll circle back around, because I think a lot of our listeners are going to be a bit more familiar with this one, and that is Miss Dolly. I don't even have to give her last name. Everybody knows who Dolly is. She's worth about 400 to 500 million, and obviously she's known for her massive hits. You know, the song that Whitney Houston covered, I Will Always Love You, 9 to 5, her acting, movies, so on and so forth. Just tons. And Jolene, Coat of Many Colors, goes on and on and on.
Speaker 1: And she's made a lot of money from just really being a shrewd businesswoman, to your point with the Jay Z quote earlier, in marketing her strengths, which was this kind of simple country girl persona, and a few other things. We all know Dolly's assets there. But really, this is like a long haul. I don't know if a lot of people know, but she bought Dollywood, which was actually a theme park that was not doing well back in 1986. It was actually an already existing theme park and she rebranded it, and it took it a while, Tony, to get it really rolling to where it was doing really well through the '90s and the 2000s.
Tony Mauro: Yeah. And I would love to, if you ever had a chance to meet any of these people, because I'm sure their stories are similar, but just to sit down and ask them, "All right, tell us about all your failures." And they probably could go on for hours and hours and hours about-
Speaker 1: Yeah, great point.
Tony Mauro: [crosstalk 00:11:49] things they did and didn't do well. And I think before I get into Dolly's stuff here, I think everybody wants to be ... This is another one from his success, Prince, is everybody wants to be successful until they see what it takes. And these people, when you ask, pry them about the sacrifices they've made and the patience they've had to have to get to where they are, you'd probably be blown away.
Tony Mauro: But I think in her case, I mean, she's been around a long time. She has always been relevant, especially in the country music scene. And she is another one that's taken money and diversified, invested, been very patient and let time kind of be on her side, tying it back to financial planning is you've got to be patient. You got to work at it.
Speaker 1: I think that's a great point.
Tony Mauro: You've got to save, you got to do all that. It's not just going to appear. And you know, especially if you're close to retirement, don't have any magic wands, you know? And so I'm on the sayings today, so I'll give you one more. I just bought a print, so there's this guy standing at the top of the mountain, and the quote is, "He didn't just fall there," and that's it. I mean, and if you just think about it, you're right. He had to climb there.
Speaker 1: He had to climb there, yeah.
Tony Mauro: These people have to climb to where they get to, and just like us, we may not get to that level of money and fame, but we got to climb to our goal, and it's going to take time.
Speaker 1: Sure.
Tony Mauro: It's going to take good plans. It's going to take working the plan.
Speaker 1: Well, we could say from $400 million for Dolly down to just a million dollars, or maybe 500,000, or whatever it is that you need for retirement. I mean, again, you're not going to just ... Most of us are not just going to land in that pile of money.
Tony Mauro: No.
Speaker 1: We're not going to Scrooge McDuck it and find that we've got just this vault full of coins we can go swimming in. So, it's one of those things we've got to build it over time. I think patience is a great way of looking at that. That's the trick to investing and also retirement planning is over time, we're going to get there. But even for folks who start a bit late, Tony, a lot of us don't really get serious until we're 50, or 50 plus, but there's still a good amount of time to get things done.
Tony Mauro: There is still a good amount of time at 50 plus. It's, take a little bit different approach, and I think if you're 50 plus it would definitely behoove you to visit with an advisor to talk about the end game and here's what I want to do, and here's what I want to retire. And kind of give them an idea of what you want to retire with, in other words, in monthly income. And they're going to be able to tell you whether that's feasible or not, or at least what you have to sacrifice in order to get there. And maybe you have to readjust the goal a little bit, or work a little bit in retirement. There's all kinds of ways to get there. But you know, at least you have a plan.
Speaker 1: Well, I mean, you mentioned aging rock stars earlier. A lot of these bands, they call them the dinosaur bands sometimes, so why are they still out touring? I mean, you mentioned KISS. I think they're on their fifth ... this is the year tour, right?
Tony Mauro: Yeah. Fifth world tour, yeah.
Speaker 1: Because they are a business.
Tony Mauro: Yes.
Speaker 1: Sometimes, I think it was one of the guys from AC/DC years ago said, "Look, we," and this is of course, obviously before COVID changed all of that stuff, but said, "It's not just us that we're going out, and people say, 'Oh, you're hitting the road again. You must need money. You must not have handled your investments very well.' It's like, that's not necessarily the case. Sure, that's the case with some artists, but not all, because there's a lot of people that we employ that depend on us to actually go out. We are a business."
Tony Mauro: Yes. Yeah.
Speaker 1: "We go out and do our thing, and it's hiring the T-shirt people and the road crew and the marketing folks and the ticketing sales."
Speaker 1: And then they have their own office. Most of these celebrities or these musicians have a corporate office to a degree, right? They have a lot of folks. They have staff, they have personal assistants, they have accountants, right? They have CPAs and CFPs and all that stuff.
Tony Mauro: I think the other thing too, with the aging musicians from the '70 and '80s, out on the road, because I think that for one, like you said, they've got a lot of things and a lot of people that are dependent upon them. But two, as you know, with the way that the industry is today versus back when I bought albums-
Speaker 1: Oh yeah. They didn't make anything, yeah.
Tony Mauro: ... I don't know what the setup is, but I think they make the most money touring. And then a lot of these bands now, they're selling out marketing because people like me, that's the music we grew up with. We want to go listen to that before they're gone, and we've got more money than the young guys we used to be and can buy more.
Speaker 1: True. Yeah. That's a great point. You know, it was a drummer, Alex Van Halen, who is the drummer for the legendary band Van Halen, was just recently talking after his brother passed away and said, "The industry is just in such a bad state. We used to make a dollar a record," he said. "When we would sell an album, we'd get a dollar off of that, whatever that was." And you think, let's say, 10 bucks, right? They're selling it for $10, a dollar's going to the band, and he's like, "We had to split that dollar four ways."
Tony Mauro: Right.
Speaker 1: But nowadays, you have to get 10,000 streams just to make six bucks, because they're paying 0.001 or whatever the case is. And there's always something going on, there's always a way we have to ebb and flow, Tony, and I think that brings us back to just having a plan, diversification, all really the principles of kind of life in general, fall right into financial planning and retirement planning. Really, it's the same story.
Tony Mauro: It really is. As we've done, just draw all kinds of similarities to it, for sure. But I think at the end of the day, of course, I always say this, is that you've got to develop some kind of plan and you got to be able to work that plan, otherwise you're really leaving it all to chance, and you don't want to do that.
Speaker 1: Yeah. That's a great point. I mean, our whole lives, we think about, we try to plan for things. We plan to eventually have kids and raise them and all that kind of stuff, and where we're going to live and we're going to work, and how they're going to go to school, and yada, yada. I mean, all that stuff is about planning, and so that's why we do this show, Plan With The Tax Man.
Tony Mauro: Right.
Speaker 1: So if you've got some questions, if you need some help, if you want to tweak your plan or see if your plan needs a tweaking or two, or just don't have one at all, and you're not already currently working with Tony and his team, give him a jingle at 844-707-7381. Subscribe to the podcast on Apple, Google, Spotify, and the various platforms, or stop by the website, yourplanningpros.com. You can find it all there. You can book time with Tony. A lot of good tools, tips, and resources at yourplanningpros.com. He's been doing this for over 20 years as a CFP and an EA, and a great resource for you to tap into here in the Iowa area. So Tony, my friend, I'm going to let you go. Thanks for hanging out with me this week and talking music. Now, I'm going to have to go listen to some rock and roll.
Tony Mauro: Me too. I'm going to listen to it as soon as I get off. We'll see you later.
Speaker 1: All right. We'll talk to you next time here on the podcast, Plan With The Tax Man. Hit that subscribe button. We'll see you next time.
Disclaimer: Securities offered through Avantax Investment Services. Member FINRA, SIPC, Investment advisory services offered through Avantax Advisory Services. Insurance services offered through Avantax Insurance Agency.
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