Gallerella

Shake Your Money Maker

Thu, 16 May 2013 13:41:39 -0700

Ignore the crassness of the title of this blog for a second and stay open for just a bit. I work with a lot of artists. I help them manage their finances and often times I’m helping them deal with the lack of funds and the unpredictability of cash flow. I work with artists at varying stages of their careers and varying degrees of success. But most of them have one thing in common: they reject that which is easy or that which has been freely given to them. They believe by embracing that thing that they are selling out.

In the art world negative connotations have always revolved around the idea of compromise aka selling out or giving in. But why is that? When I look at my young daughter and see her making compromises with other kids on the playground, I see it as a good thing, a sign of maturity, a sign of putting others’ needs before her own but still managing to get a little bit of what she wants too. Two happy people are better than one.

So why in the art world is it bad to compromise? Why are making concessions considered negative? One artist told me it’s because we associate compromise with handing over our unique, singular vision. Okay that may be true, but maybe this way of thinking is preventing artists from seeing an opportunity buried in those confines and limitations.

Let’s take for example an artist named April. She wants to have a gallery but has decided she can’t wait around. She does sales out of her studio, but it’s not nearly enough to pay the rent and cover her cost of materials. She has had a long-time connection with a major sports fashion brand and is often hired as an art director on photo shoots and asked to consult on product design. These side projects help her sustain her art practice, but she dislikes being subjected to budget constraints and marketability oversight.

We’ve been working together for the last few years and my biggest advice to her has been: embrace your connections, embrace this relationship, and embrace the limits. As an artist so often you are working with nothing to ram up against and that can be exhausting. These opportunities present a way to practice your art in a different environment and structure. Limitations can lead to growth, problem solving can lead to development, parameters can set you free. This opportunity may be her ticket to getting her work the exposure she desires to an even larger audience than those that just read Artforum.

Another artist I work with is Brian. He had a day job working at a billboard company. He was doing graphic design work and not the glamorous kind. He was hired to do grueling and labor intensive Photoshop retouching work. Seemingly meaningless and backbreaking work, but it paid the rent. He toiled for a good year there and eventually made friends with the owners. He finally approached them to sponsor an art project. He saw an opportunity; he embraced his relationships and leveraged it to mount a large billboard project all over the city of his work. This is the kind of exposure he would never have gotten by exhibiting his work in a gallery alone.

I do believe that opportunities and relationships are not random. I think that the universe answers us in ways we cannot really comprehend at the time they present themselves. But if we stay open, embrace things that come our way and figure out a creative way to incorporate and leverage those things, the results can be startling. My advice in this blog is: stay open. Stay alert to the opportunities that you may have dismissed. Look around you and see if you have neglected someone or something that might be offering a new and interesting challenge. It might be right behind you.

The Buddy System

Sat, 06 Apr 2013 22:03:46 -0700

The Buddy System

I’ve been thinking about this idea that everyone has something to teach. You may not agree with their occupation, their religion, their lifestyle or their use of money, BUT there may be some sliver of an opportunity to learn something valuable from your most reviled enemy. Let’s take for instance an investment banker.

What is the utter opposite of an artist? To me it’s an investment banker. Investment bankers’ entire goal is to make money. Not to make or create some THING or anything for that matter. Just money. And an investment banker might argue “but that’s what makes the world go round. What else is there, really?”

This statement might repulse an artist. And we may loathe their kind but they do have something to teach. I would bet that most investment bankers don’t have debt and they probably have sizeable savings accounts so maybe there is something I (and a few artists) can learn from them.

What a revolutionary idea: an exchange program where investment bankers give free financial advice to artists in exchange for an artwork. I’ll work on that Buddy System idea and get back to you.

In the meantime I’ve been interviewing various financially savvy friends of mine. I asked each of them: How did you learn how to save? When did it start? How were you able to do it? What should I do? How should I advise artists? And the resounding answer was “trick yourself”. The only way to save if it’s not in your blood is to force yourself indirectly. You never see it. It’s like it never happened.

I started thinking about my saving and spending habits over the years. There was a time when I made $25,000 a year, $35,000 a year, $50,000 a year and every year I spent it. So when I had $25,000, I lived on $25,000, and when I had $50,000, I lived on $50,000. SO I need to trick myself into thinking I only have a certain amount and that’s what I will ultimately have to live off.

Okay. How? I’m not an employee. I can’t have someone else take out the money for me and put into an account that I never see or that isn’t connected to my checking account. How does an artist or someone who is freelancer pull this off?

I was looking at my bank’s website for different services and then it hit me: BILL PAY! Okay, so I can set up an account, Capital One 360, Fidelity or Schwab or whatever money market account I can find, and then I can set up an auto debit out of my account every 2 weeks or once a month. It’s just like a bill that I have to pay except it’s a bill that I pay myself. And I can’t access it that easily meaning that if I want to buy something major on the spot, I can’t. It takes 3 days to get the money to transfer into my checking, think of it as a “cooling off” period.

I think this might actually be the golden ticket. Thank you, to my financially savvy friends who contributed their sage advice. I will probably call on you again when I set up the Buddy System!

Keith Chen Ted Talk

Sat, 30 Mar 2013 20:23:49 -0700

Keith Chen Ted Talk

Savings and Sci-Fi

Sat, 30 Mar 2013 20:21:35 -0700

Back on the wagon. Back to the topic of finances or lack there of.

I listened to an interesting Ted Talk while enduring traffic driving past downtown LA. Check out Keith Chen: Could your language affect your ability to save money? <http://www.ted.com/talks/keith_chen_could_your_language_affect_your_ability_to_save_money.html>

According to Chen I’m not to blame for my lack of savings. The problem isn’t my will power, the problem is that I think of the present and the future as different and I constantly reinforce that way of thinking every time I express the present and future through my language.

I love these types of thought experiments. So if the theory holds then when I say “it’s raining” to talk about rain right now and then I say “it’s going to rain” to talk about rain in the future, the mere different treatment of these two things linguistically means that I “think” about the present and future as different.

Chen through exhaustive comparative research took into account all factors and many different cultures and came to the conclusion that cultures that did not differentiate between present and future saved! They look at the present and future as the same so it’s not hard to sacrifice a little now for a larger benefit in the future. If the present and the future are thought of as the same and it’s reinforced in their language then it is easy to choose $10 today or $15 a few months from now. So the choice is easy $15! Those are the people that save.

I do value the present and the future differently, and I do put more weight into the present. I do like to realize the benefit now versus later. But I also love the future too hence my addiction to sci-fi. So I’m wondering if my love of sci-fi will help counter balance my desire to have things right now. Maybe if when I’m confronted with the desires of the present, if I can picture a future that’s more fantastic, I might be able to dissuade myself in the heat of the moment. It’s worth a shot.

Artists & Taxes Redux

Wed, 27 Feb 2013 20:04:00 -0800

Here’s an updated blog post from last February.

Let me preface this by saying I am not a CPA (Certified Public Accountant / aka Tax Guru) and am only giving mere suggestions here in this blog. Please seek tax advice from your accountant.

So you’re an artist and you have expenses, you probably file a Schedule C for your art practice where you deduct studio rent, studio utilities, health insurance, supplies, production expenses, pedestals, framing, contract labor (make sure you file 1099s), shipping, crating, photography documentation, software, archiving expenses like flat files, etc.

Here are some other areas to also consider (and ask your accountant about):

Continuing Education – museum talks, classes, conferences

Dues & Subscriptions – art magazine subscriptions, museum memberships

Research - music, video rentals, movies, books, museum entry fees, tickets to special events (ask yourself if they play a role in your own art-making)

Marketing – website design, business cards

Catalogues

Work clothes like coveralls

Lunch for studio workers

Parking while on business errands

Interest expense on your business credit cards

Bank fees for your business checking

Unfortunately fancy clothes for your opening not deductible

IRS Circular 230 Disclosure: Any written tax advice contained herein was not written or intended to be used and cannot be used by any taxpayer for the purpose of avoiding penalties that may be imposed under the U.S. Internal Revenue Code.

A B C's of Business Entities

Sun, 10 Feb 2013 14:00:06 -0800

I’m taking a little break from the financial experiment for the next few weeks of blogging to address a few things that I’ve seen come up recently. My dad asked me to give him a quick breakdown of the different business entities, and I realized that I get asked this question a lot. This is just meant to be an introduction, and I highly suggest that before you set any of these up that you consult a CPA and a lawyer. There are also a bunch of online companies like Legal Zoom and The Company Corp that can help you set these up more affordably than a lawyer, but you don’t get the same level of support and counseling.

Sole Proprietorship

Sole-Proprietor means one business owner. This is the default mode of operating a business. You and the business are synonymous so if the business makes a profit then you make a profit and if the business incurs a debt you also incur that debt. Legally there is no separation between the business and you. So if the business gets sued because one of your assistants gets seriously injured while building a frame for you, you get sued personally as well. But this is by far the simplest and least expensive way to operate a business.

Partnership

Artists that are often working as collaborators might want to form a partnership. The main difference between a partnership and a sole-proprietorship is that the partnership files its own income tax return. But whatever income or loss occurs, it flows through to the partners. So the partnership isn’t paying tax directly. The income or loss passes to the partners to report it on their personal returns. The main advantage of a partnership is that it allows for that flow through income or loss to be customized. For instance, the partnership might be 50/50, but the partners choose to split the profit 60/40 if that yields a better tax result. The downside of partnerships is that one partner is personally liable for whatever the other partner does. So that’s why partners often form an LLP Limited Liability Partnership, which offers some liability protection similar to an LLC (see below). Partnerships can be tricky so make sure a lawyer draws up the agreement and that it specifies who does what and what happens when a partner wants out.

Corporation

The main advantage of setting up a corporation is to raise money and to protect yourself. A corporation exists, as a separate entity so there is a barrier between your personal assets and the business. So if the company gets sued, in most situations, they can’t come after your personal bank account. There are C corps and S corps, and they are treated differently for tax purposes. A C corp can have as many investors as you want. It also files its own tax return and pays taxes on its profits. So it’s not a flow through entity. The downside of C corporations is double taxation. When a business makes money it pays corporate tax. Then because you are an employee of your company, you are paid a salary and you are taxed on that at an individual level. But with the S corp there is no corporate level tax because it’s treated like a flow through entity. The only downside to S corps is that you can’t customize the income flow allocation. So if two people are 50/50 investors in an S corp then they have to split the profits 50/50.

LLC Limited Liability Company

The LLC is a type of entity that is typically considered the best of all worlds. It limits your liability, it’s a flow through entity so you are only taxed once, and you can allocate how the flow through occurs. So a lot of artists choose to set up a single-member LLC. But depending on where you establish your LLC you will be charged an amount by the state to maintain the LLC status. In California it’s $800 each year so it is definitely something you want to carefully think about especially if you aren’t making a lot of money from your practice.

Because all of these entities cost money and take time to set up and maintain, I don’t advise people to set these up lightly. I would only recommend it if there was a real need, for example the need for liability protection when you hire people to work in your studio, if you need to raise money, if you have collaborators, or if there is a special project that you want to isolate from the rest of your practice.

Next blog post I’ll revisit some tax tips for artists.

Attack the Debt Part 2: My Austerity Measures

Mon, 04 Feb 2013 22:20:30 -0800

So let’s fast forward a year ahead, and I’ve got all my credit card debt paid off, and I’m celebrating and feeling great about what I’ve accomplished. I’m free and light and really proud. I should reward myself. Then it dawns on me; I’ve felt this way before. I’ve actually felt this way several times in the course of my life. I mean I’ve paid off my debt many times over before, yet I end up back in it a few years /months later. What’s to prevent this from happening again? I remember feeling really free and light and proud but somehow the immediate need for things was greater. Ultimately the problem with my money is me.

So how do I fix me?

I remember telling myself all the typical thing that all addicts tell themselves:

This is the last time.

I will pay it back.

I deserve it.

I’m fully aware of my choices.

I’m not addicted.

I am addicted, but I don’t care.

So what makes all of this effort worth anything? The only thing that makes it worth it is to never ever be in debt again. Okay, so I’m committed to being a recovered debtor. How can I do things differently?

Stash or cut up the cards – okay I still have them in my wallet, but they have sticky notes on each of them with strange reminders like You’re Fat.

No unnecessary shopping – so un-American, does buying sundries at cute, new fangled general stores count?

Live within your means – not so hard if I’m not shopping for unnecessary things

Use up what you have - okay gone thru closets and pantries and have actually whipped out my sewing kit and mended clothes that would normally go unworn and taken stock of things that I forgot I had

DYI – okay maybe this is going to be a complete disaster but I’ve almost got my husband convinced that we can paint our house ourselves, saving ourselves a whopping $8,000! I will let you know how this turns out…

Do research – I hate doing research but luckily I’ve partnered with a man who is obsessed with Consumer Reports

Buy it on sale – I really loathe coupons but I love a sample sale. I will have to work on this one. I do like that Penny Saver that I get in the junk mail. Very interesting things for sale, but then I remember No unnecessary shopping so it goes into the recycle bin.

Substitute not deprive – I’ve been thinking about doing one weekend a month where I try not to spend a dime. How do I go to the Getty without spending money on parking? I will get back to you on that.

Have a mantra handy – when I’m tempted to spend money on something that I don’t really need, here is what I say, “I’m already happy with what I have”. It’s worked so far…3 days in. I will let you know how it goes this week.

Don’t hide, don’t lie – I have to admit I did buy something this week but it falls into the Buy it on sale category, and I did actually need black ankle boots because I don’t currently own a pair. And I’ve already worn them since I bought them. And I didn’t buy them with a credit card. Clearly the mantra didn’t work on this because I did need them. But at least I admitted it.

I leave you with a quote that helped me avoid some major purchasing mishaps at the Issey Miyake pop up store this weekend.

He who hesitates saves money.

Attack the Debt - Part 1

Sun, 27 Jan 2013 20:54:14 -0800

I recently read an interesting yet obvious fact: all millionaires have one thing in common; they all live within their means. Of course they do. And you’re thinking, well sure it’s easy to live within your means when you’re a millionaire. But the obvious point is that they didn’t get to be millionaires without living within their means. Since college, I have not lived within my means. I’ve had times when I made $20,000 a year and lived as though I made $25,000. I’ve had times when I made $50,000 and lived as though I made $75,000. But I’ve never made $75,000 and lived as though I made $50,000. It’s a slow creep in your standard of living. It happens very gradually and so discreetly as to go almost unnoticed.

Until one day you realize, I really can’t remember a time when I didn’t have some amount of debt. I’ve always had school loans, but I never really worried about it. I’ve had on average about three different credit cards at once that have carried balances ranging from $1,000 - $12,000. I honestly tried my best to handle my debt responsibly. I would auto-debit the minimum amounts so that I wouldn’t incur late fees or unnecessary interest rate hikes. I kept an eye on my interest rate and balanced transferred to a no interest or low interest rate card when needed. I felt that I was managing my debt pretty well.

But let’s face facts: debt is both financially stupid and emotionally burdensome. If I didn’t have credit card debt, how much could I be saving for a vacation to Costa Rica? Or how much could I be using to build my business, save for my kids college fund or save for my own retirement? Or better yet, how much could I have so that I could make a real choice about what I do with my time and how I make a living?

So please make this commitment with me right here and now to get rid of credit card debt as fast as humanly possible. Pull out all of your credit cards. Grab a piece of paper or create a spreadsheet. List all the credit cards. Go online and look up each balance, minimum payment due, due date and interest rate. Rank the list by highest interest rate. Take all the credit cards except for the one with the lowest rate and put them in a drawer in an envelope and mark the envelope “Danger” or “Don’t be stupid” or “Get a grip”, whatever works. If you are not good at self-control, I suggest you cut up all but one card for emergencies. Do not close credit card accounts because it reflects negatively on your credit rating.

Make sure all credit cards are set up to auto-debit the minimum payment each month from your bank account. All accounts like Netflix, Amazon, iTunes link those with your debit card instead of your credit card. Look if you’re one of those people that pays off your balance every month and you like to get the miles, just ignore this blog post, but if you’re like me and you want to get out of credit card debt ASAP then just suck it up and use the debit card until your debt is paid off. I’ll blog later once I’m out of debt about cool ways to take advantage of credit cards.

Okay here is the thing you cannot ignore: you have to pay more than the minimum payment each month. If you don’t, it will take you 30 years to pay off your debt. If you don’t believe me look at the front of one of your credit card statements. Credit card companies are now obligated to tell you the cold hard facts that if you pay only the minimum payment you’re totally screwed. So figure out what you can afford to put towards your debt every month. I estimated I could forgo a latte every morning and make coffee at home and save $106.50 per month so that’s what I am putting towards my cards above the minimum payment.

So I have 3 credit cards:

A: $4,500 at 14.25% interest rate, min payment $80

B: $11,250 at 7.5% interest rate, min payment $205

C: $8,500 at 0% interest rate, min payment $150

All are set to auto debit my bank account before the due dates. Next I take $10 above my minimum payment and put that towards each card.

A: gets $90

B: gets $215

C: gets $160

My worst card is A so that needs get paid off first so I distribute the balance that I am going to put towards my debt to card A. ($106.50 - $30 ($10 to each card) = 76.50)

A: gets $90 plus $76.50 = $166.50

Once A is paid off then I move to card B and do the same thing.

Getting out of debt is a tremendous milestone. I personally will be celebrating in Vegas once all of my cards are paid off. Just kidding.

So the next question is how to stay free and clear of debt once you’re out. Let’s just worry about getting out first and the next post will be dedicated to techniques of staying out of it.

I will leave you with the best quote about debt that I’ve found so far:

“Don’t let your mouth write no check that your tail can’t cash.” -Bo Diddley

Occam's Razor

Sun, 20 Jan 2013 20:38:48 -0800

I felt really awful after I wrote the last blog post. I couldn’t really put my finger on it. Maybe it was because the post was so boring and dull and really obvious. How was I really helping anyone by stating the obvious? I think what bummed me out was that there was no creativity to it. I believe that every step of this process deserves more than what’s expected. A practitioner of Jungian psychology once told me when something feels really icky go to that icky place. Don’t try to talk yourself out of it. Don’t try to run. Don’t try to avoid it. Just go to the icky spot, settle in and hang out there for a while. So that’s what I did. And then I fell asleep.

I woke up the next morning thinking about Jodie Foster. I had fallen asleep reading Twitter feeds about Jodie Foster at the Golden Globes. And I’m thinking Jodie Foster, best movie she ever did besides “Silence of the Lambs” was “Contact”. (Don’t judge, remember I’m a sci-fi freak). And then I’m thinking “Contact”. I love that scene when Jodie Foster talks about Occam’s razor. Occam’s razor states that the simpler explanations are, all things being equal, generally better than more complex ones. Okay, so maybe writing about the obvious wasn’t as bad as I had thought. So as obvious as it is, the last blog post is still valid and potentially revolutionary, well maybe not revolutionary but at least mandatory. Going thru the past and uncovering the way you spend money is boring and labor intensive but it’s absolutely necessary in order to move forward.

So why did I still have the gnawing feeling in my gut? Maybe it was because after looking at my own reality, after examining my own finances, I felt really…poor. I’m not that type of thinker. I’ve always thought of myself as lucky. I’ve always considered myself wealthy, you know, other than material wealth. But I cannot deny what I look like on paper. So when I feel really low I turn to my Eastern philosophy for some answers. How can I make myself feel less poor? How can I get rid of this gnawing sensation? I turned to a few books actually and they all said the same thing: give money. What? That doesn’t make any sense. But as I read on, I was becoming more convinced.

If you eat alone, you won’t eat happily – Buddha

Okay. So this is one of those answers that is NOT obvious. Give to charity, and when you give, give freely and spontaneously. Yes! I get to be spontaneous again. I immediately went online, found a charity that I cared about and gave a monthly donation of $10.

So throughout this whole process, the moment you feel poor, the second you feel less than abundant: give something. Not only does it uplift your spirits, but it truly makes you feel full of wealth and complete gratitude.

Resistance is Futile

Sun, 13 Jan 2013 19:41:51 -0800

Step 1: We know we need to change the way we deal with money. Yes.

Step 2: We have a few tools to help with this seemingly insurmountable task. Got it.

Step 3: So now how do we go about planning the attack? What do we do next? I look at this challenge as a giant imposing mountain, and right now we are standing at the bottom of it. Or maybe we are at the first two toeholds but still very far from the top. In fact I almost feel as though it’s more like one of those balancing rocks you see in Sedona. We’re inverted right now. And even though I’ve committed to this challenge and even though I’ve admitted that I have to address this issue of money for myself and for artists that I’d like to help, I’m still overwhelmed by the prospect of taking on my finances. My hands are already bleeding and my knees are already shaking.

The next step in this uphill battle is to take the blinders off and face reality. Take out every bank statement and credit card statement for the last 2 years and come up with an average that is spent on every expense category: groceries, gas, eating out, gym, supplies, bank fees, student loan payments, car payment, travel, entertainment, rent, utilities, etc. My list has more than 30 items. It is more than a can of worms. It’s like sticking my hand in that insect-filled black hole in “Indiana Jones and the Temple of Doom”. I’m kicking and screaming the whole time and crying a little bit too. Why am I doing this? Can’t I just eat out a little less? Can’t I just buy fewer shoes? I have lots of will power so why do I need to go thru the past. This is about the future. I don’t need to sift through all this old paperwork. I don’t have the time to do this. I have more important things to do like make money. I have more important things to do like be with my family. I can skip this step. I can just pretend that I went thru it. And then I had to face it. I had to do it. If I don’t do it, I can’t write about it. What had I gotten myself into?

I spent one week whining about doing this and ultimately it took about 8 hours to go thru the process. Eight hours to download and print 2 bank accounts and 4 credit card statements and sift through each statement and compile the categories in a spreadsheet. Eight hours and you will know more about yourself than you ever thought. So just do it. Don’t do what I did and waste time, just suck it up and do it. I guarantee you will learn something that is fundamental about how you spend money. I learned that I spend WAY more than I ever thought I did. And surprisingly I make way more money than I ever thought, but less than I need to cover my expenses.

I thought I spent about $300 a week on groceries. No, I spent $365. And you’re thinking well that’s not totally off, and my old self would say, you’re right. But I’m actually off by $3,380 per year. Okay here’s another example, I thought I spent about $400 per month on eating out. Shocker, I spent on average $1,085 on dining every month. I was off by $8,220 for the year. Okay so what, I’m just bad at estimating how much I spend. So how does this help me for the future? Well, I noticed two things by going thru this arduous step: 1. I noticed where I could cut back. I didn’t need to go to the nail salon every week. I didn’t need to shop at Ikea once a month. Half the crap that I bought was sitting under my desk not even out of it’s packaging or built from the last trip I took there so how bad did I need this stuff. I could have the cleaning people come 2 times per month instead of every week. But the 2^nd and more important thing that I learned was that because I was paying off OLD purchases meaning paying a lot in minimum payments on my credit cards (things that I had bought last year) I was spending more than I was making! How is that possible?

This is the scariest step of them all. And this is the most necessary step in order to figure out where you can save. This doesn’t mean that you have to budget yourself and live an austere life with no thrills or spontaneity. But if you’re like me, spontaneity landed you in some debt so maybe it’s okay if we take a break from spontaneity until we have our finances under control. Regardless at least you know where you stand and you can make sound decisions because you know the facts.

What did you learn about the way you spend?

A Few of My Favorite Things

Sun, 06 Jan 2013 12:04:00 -0800

Okay so it’s official, a lot of artists are on the bandwagon to embrace money and get control over their finances. Cool, I’m not alone. Now the question is how do we accomplish this together. I’m a lover of many things. And I truly believe you should use the things that you are into to help solve problems. I’m not sure if it’s the chicken or the egg, but I think you are drawn to certain things (you are given amulets, if you will) for a reason. Either you are drawn to them or they are drawn to you so that you can use them in the future to help you conquer fears and doubts and ultimately help you move to the next phase of your life. Okay I know, voodoo again (or some Dungeons and Dragons BS). But hear me out.

Here are a few of my favorite things: science fiction literature, popular science, yoga, meditation, eastern philosophy, psychology and contemporary art. Because I love sci-fi nothing is out of the realm of possibility. I will explore even the seemingly ridiculous and fringe side of things. Because I love popular science, my reality has to be bound by physics and quantum mechanics. That seems at odds with one another, but what I’m getting at is that I root myself in reality, but I allow the fantastical and the bizarre to help me solve problems. I cannot help but tackle things from all conceivable sides.

Because I love yoga, meditation and eastern philosophy I feel like I have a set of real tools to deal with the very difficult aspects of taking on an enormous problem or obstacle that’s larger than myself. I see money and finances as an immense issue so I need help. When I start to have doubts or I start to feel desire for let’s say a new pair of boots or if I start to hyperventilate when I look at how little is in my bank account or how large my student loan debt is I can breathe and focus and come back to a balanced calm. Sometimes turning the mind off can actually fill us with creative energy to solve problems. Because I love psychology I know that the brain is both the root of our problems and the solution. My childhood belief that money was uncontrollable and unknowable was only revealed through the exploration of my past. It is where most of our deep-rooted fears and beliefs, our mythology spawns. And you have to know where things began in order to eradicate them.

And because I love contemporary art, when the shit hits the fan, and I absolutely can’t think about money and finances, or I feel like running for the hills and scrapping this whole ridiculous experiment, I can lose myself in art. I can go to a museum (sometimes free) or gallery (always free!). It’s not just a place to escape, it’s a place for me to feel normal and at peace again. It is my center. And maybe once I get control over my finances, I can support the art world in a totally different way and actually start doing the work that I do to help artists for trade! I really love the barter system too.

Okay so now that I have all of my weapons and amulets in hand. I am well equipped with all of the things that I know and love so that I can feel confident to take on something that I fear and loathe and that seems like an insurmountable obstacle. And then ultimately how do I go about making money one of my favorite things? Isn’t that what happens in video games, the thing you conquer now becomes a resource, it becomes your talisman. What are a few of your favorite things? What are the tools that you will use to take on this monstrous task of conquering your fears and doubts about money?

The New Year: An Experiment with Money Part 1

Thu, 27 Dec 2012 09:26:29 -0800

The New Year always makes me want to attempt something new. Not like a New Year’s resolution that could eventually be broken or forgotten, but something much more transformative. What real problem or issue needs to be addressed and resolved now? What issue has consistently come up this past year with my clients that needs solving immediately? The answer is clear: Money.

I know you’re probably thinking: Wow! That’s obvious. Or Wow! That’s an overwhelming topic to cover. Or Wow! This doesn’t apply to me because I’m an artist, and I don’t do what I do for money. I actually hate talking or even thinking about money much less reading about money. And you’re right it’s all of these things: obvious, overwhelming, annoying and banal. BUT artists love dealing with the taboo. And what’s more taboo than money? So please indulge me. Let’s experiment together and go down the road of the most taboo topic in our culture, and in the art world.

Now let me preface this whole thing by saying, I’m not going to discuss how to make money from your art or argue about the relationship between making art, the art market and making money. This will be a year-long experiment with the Gallerella blog. I’m giving myself one year to reinvent the way we think about money, manage money and control money so that it doesn’t control us. And why does this matter? Because being in control of your money makes you more independent and being more independent gives you more freedom and having more financial freedom might allow you to have more creative freedom and having more creative freedom, well, it just might make you a better artist.

Hey, it’s an experiment so just roll with it. So this is what I’ve always said and heard: I don’t have any money so why worry about it now? I will worry about it or better yet hire someone to deal with it once I have it. I don’t manage money very well because I believe it’s beneath me. I don’t want to be consumed with it because I feel like it holds very little value. I don’t want to think about it because if I do it’s like opening a can of worms. I don’t want to think about it because then it will consume my every thought. Because who wants to count pennies and worry about something as lame as money. That’s what my parents did, and I don’t want to be them.

Why am I so afraid of money? Why do I hate to think about it or talk about it? Where does my relationship with money come from? I always grew up believing that money was like magic, and not the good magic but like voodoo. I really thought money was something that came and went, feast or famine, you couldn’t hold on to it. You couldn’t predict it. It was elusive. I always felt like I couldn’t put too much stock into keeping it. It was like water in my hands, it just always disappeared. And what do you know it always DID disappear. So obviously the first thing I have to do is change the way I think about money.

First step: Change the way you think about money. New way of thinking: Money is predictable. Money is tangible. I can hold onto money. Money is in my control.

I know what you’re thinking, the power of positive thinking, that’s bullshit. Yes, I agree, it takes a lot more than positive thinking before it rains money. But this is just the first step. This is about rejiggering your brain so that you think in a new way because let’s face it, the old way isn’t working so well. Let’s just admit that money plays an important role in your art making. It might not make you a better artist but it will definitely put you in a place of control. And that’s a much better place to be than asking your gallery for an advance. So isn’t it worth attempting? Isn’t it worth trying something new in the New Year? Isn’t your art and your career and your peace of mind worth trying a little voodoo?

Tell me, how do you think about money?

Day Jobs and Selling Out

Thu, 06 Dec 2012 10:19:21 -0800

Art making is often times a solitary endeavor. Most of the artists that I’ve worked with believe that they alone struggle with problems that pervade only their lives. I currently work with about 20 artists at various stages in their careers, and I get asked a lot of the same questions and run into a lot of similar issues and situations. Sometimes artists think I’m blogging about them specifically when I’m actually blogging about a different artist entirely. Because they believe that their situation is unique when in fact a lot of artists and galleries struggle with very similar issues.

So I want to dedicate this blog to addressing 3 common types of problems with artists that I’ve seen over my 15 years of working in the art world. I’d be surprised if you haven’t experienced one or more of these issues along the way. A word of caution, the following blog doesn’t offer many answers but sometimes finding solutions is not really the point. Sometimes it’s enough to know that you’re not alone.

Here are 3 artists with 3 different problems:

Artist A works diligently in his studio. He doesn’t have a day job. He gets up in the morning and works just on his art. Part of the reason he doesn’t have a day job is because he’s worried that it will compromise his work. But he worries because he can barely afford his rent much less materials, gas, food and all of his other costs of living. He suffers because his financial situation is out of his control.

Artist B has a day job and she fits in her art making in the small amount of time that she has left over. She pays the bills and has control over her finances, but worries that her identity has been swallowed up by her day job that she barely tolerates. She worries that she doesn’t have the time to really make the work that she wants. She suffers because her identity is usurped by her menial job and her limited amount of time.

Artist C has seemingly achieved the Holy Grail of artistic success: he makes money off of his work and doesn’t have to worry about having a day job. But he worries that he sold out. He’s concerned that maybe his work is too safe, too commercial or that he’s a one trick pony. He suffers because he believes he’s compromised.

This brings me to a very important concept within an artists’ career: the idea of compromise. Compromise is thought of as selling out. But what about thinking of compromise in a different way? What about thinking about compromise as minimizing duality in your life and art making. I believe that duality, as a mode of existence, wastes energy. You’re constantly in conflict with yourself. And that conflict sometimes feels like it’s necessary, you can’t make good work if there isn’t drama or conflict. I get that, but I think it can also be self-defeating.

I think at one point or another every working artist has been one or more of these people. And moving from A to B or B to C or C to A is not really the point and doesn’t really solve anything. There are problems and difficulties with all these scenarios. And because I try to help artists, I can’t not offer up a possible solution. It might be corny or trite but here goes, if all these scenarios are undesirable, how can you make them desirable, how can you make them work? How can you find fulfillment in your existing situation? Changing the situation is easy, but finding true fulfillment is harder because it takes a shift in a way of thinking, it would mean accepting the idea of compromise not as a form of selling out but as a sign of maturity and seeking balance to make your art practice and your life whole rather than disparate.

Be Prolific Be Loved

Fri, 19 Oct 2012 16:48:43 -0700

I recently met up with an artist client of mine and we were discussing his tepid relationship with one of the galleries that represents his work. He’s been somewhat concerned about why he feels like his gallery basically blows him off. He wondered if he was just being paranoid or had actually made some kind of artist-gallery faux pas.

At first I thought maybe he was being paranoid but after we got to talking, I realized he hadn’t given his gallery any recent inventory. He’s working on a show for his other gallery and since he works slowly and incredibly methodically, he’ll just have enough for the upcoming exhibition.

So I remember working with a gallery years ago and we would go down the list of every artist and print out all the available inventory and create lists of offers we would make to clients. Of course, we would skip over artists that we didn’t have any inventory for. Not out of rudeness, just because that’s what galleries do, they sell art. And if there isn’t any art to sell, then they move on to the next artist on the list.

Now obviously I’m being a bit crude, galleries do a lot more than just sell work. But when you’re in a sales meeting and every time a particular artists’ name comes up and there isn’t any “extra” inventory outside of their exhibition and the occasional art fair, they start to get passed up a lot. The artists that had no inventory just really weren’t on our radar.

I suggested to my client that maybe the reason that he felt like they were blowing him off was because they were. No inventory, no sales, no love, again very crude but not far from the truth unfortunately. But what we were really uncovering thru this process was that he needed to make more work if he was going to be represented by two galleries. He needed them out there showing the work and talking to curators and excited about new projects and drumming up commissions. And in order to do that they needed to have something to work with. They needed inventory. And not just any old inventory, new, fresh, current inventory, hot-out-of-the-studio inventory.

So we made a plan, after his exhibition, he needed to revamp his studio process: hire an assistant, outsource part of the production, enlarge the studio and start making more work. Now I’m not advocating for every artist to become a factory but there is something to be said for being able to handle the demands of being loved. And sometimes in order to get love you have to put more love out into the world.

Paper Trail

Fri, 12 Oct 2012 14:53:13 -0700

A few weeks ago I was listening to NPR and heard a story about a remarkable paper trail. The paper trail related to a Renoir painting that had been bought at a flea market for $7. The only way the Baltimore Museum of Art may be able to recover the work is because it kept a record of the work in their card catalogue. Since 1937 there was a card indicating that the BMA had the work at the museum from 1937 – 1951, that it was on loan from Sadie Mae and that it had been stolen in 1951.

“All the way up through 1951 you have it listed in the (museum) card file. Then it disappears … and the thing shows up in somebody’s garage,” said Wittman, the former FBI agent. “It’s remarkable that the museum would still have that catalog card. That’s fabulous.” - AP

Obviously I’m not saying you should start an analogue card catalogue but keeping track of each work’s “fact sheet” is important. Keeping an accurate record of an artwork’s history not only helps when making an insurance claim, but more importantly it helps you manage future sales. You can use any number of databases to do this. Just make sure it has a way to clearly identify each item on a fact sheet.

A fact sheet has three components: Provenance (who owned the work previously), Exhibition History (where was the work exhibited), and Literature (in which publication was the work reproduced).

Here is a sample fact sheet:

Caitlin Masley

Untitled, 2011

Acrylic on paper and pencil

28 x 15 inches

Provenance

Alison Smith, New York, NY

Amy Davila, Los Angeles, CA

Exhibition History

Caitlin Masley, Wirksworth Art and Architecture Festival, Derbyshire, England, 2011.

Literature

Silman, Eliza. “Caitlyn Masley.” Time Out NY 11 Oct 2012: 32.

And remember when it comes to an insurance claim a picture is worth a thousand words so make sure you have an image attached. The BMA didn’t have one so they had to go by dimensions and description to match it up with the 1951 police report.

Stimulating Your Economy

Thu, 20 Sep 2012 13:24:32 -0700

I don’t think it’s possible these days to avoid the barrage of news about the staggering economy and the various dismal job’s reports that seem to roll out on a weekly basis. Lately every time I tune into NPR I get depressed. But it got me thinking about my own economy. How could I stimulate my own work life and do more?

And then it hit me: I could become an employer. How much better would my life be, work or otherwise, if I had an assistant that could get me organized and help my life run smoother? But then I thought I’m not rich; I can’t afford an assistant. But could I afford a part time assistant? Maybe…

I thought why the hell not? So I put a simple ad on craigslist: Seeking Smart PT Office Assistant. Believe it or not in a matter of 5 hours I had 200 resumes in my email inbox. After getting over the initial shock of having to literally find a needle in a haystack, I began to realize that there were actually a lot of needles in this haystack. There are a lot of highly qualified people out there looking for a decent job even if it’s part time.

After a few days of sifting and narrowing it down, I lined up 15 interviews in 15-minute intervals for one day only. Yes, I was dreading the marathon ahead of me. Yes, it was a bit grueling searching for my ideal person, but at the end of the day, I had my top 4 candidates.

I asked myself who would grow with me? Who would be the ideal person to not just be an assistant but that could eventually be my right hand, maybe a manager one day? I decided on the one person. I called her promptly to offer her the position. She was so excited to start working for me. I couldn’t believe it: in one week I had an assistant. And one week after that I had an organized office, a revamped mailing list, a functioning calendar, and lists upon lists of more for her to do.

Having an assistant actually allowed me to think bigger. I now had someone that I had to keep busy. I needed to think not about tomorrow but about a month from now. I was planning and strategizing in ways that I couldn’t allow myself to do before. I needed to figure out what to delegate and what I couldn’t delegate. I had two brains instead of one. I had 4 arms instead of two. It was the most amazing revelation I’ve ever had! Yes, I had not only stimulated THE economy, I had stimulated MY economy.

To all those artists and galleries doing everything themselves, I have a message for you: you don’t have to do it all by yourself, in fact, you shouldn’t do it all by yourself. For the love of the economy and your own sanity become an employer.

Benefit Art Auctions

Fri, 14 Sep 2012 13:15:00 -0700

Since I’m currently ensconced in planning a benefit art auction right at this very moment, I figured why not blog about all the reasons participating both as an artist and a gallery matters.

If you’re a gallery or an artist, I’m sure you’ve been hit up by various institutions, at least a few dozen times, to donate work to help raise money for the arts. Since we don’t live in Germany, the art community is responsible for seeing that we don’t fall into a cultural void. So the question remains, do you participate or not?

My answer is unequivocally, yes! And I’m not just saying this because I’m organizing one myself.

Artists, even though you don’t get to write off the fair market value of your work on your tax returns, you still get a ton of benefits from donating your work, here are my top 3:

Purpose – gets your creative juices flowing, your work has an immediate purpose to help the organization
Exposure – gets the work out of your studio and into an exhibition space, people see the work, it gets exhibited and reproduced, shot out into universe on websites, press releases, checklists, posters and ads.
New Connections – gets the work in a reputable venue along side other reputable artists and your work is seen by collectors, curators, gallery dealers, and press.

Galleries, you actually get to write off the full fair market value of the work on your tax returns, so participating is basically a no brainer. But here’s how you can take it a step further:

Invite your collectors - make sure you promote the event to your collectors and mailing list, this ensures that the work you donated will get bought and if no one buys it, step in and buy it yourself, double tax benefit.
Host an event – pick a non-profit that you like and ask if you can host the auction at the gallery, it’s great for press.
Donate money – like I said before, this isn’t Germany, so if we want our most prized cultural venues to stay alive we have to play an active roll.

And if you’re a collector, you should also support and participate. Personally I’ve bought the majority of the art in my collection at benefit art auctions. Not only did it put me on the radar of some great galleries that I would never have had access to, but it also helped me develop my taste and get to know various artists work that I wouldn’t have been exposed to otherwise.

Do not hesitate to participate, even if you are asked year after year and nothing has come of it yet. The work, your name, and your generosity is getting out into the world and that cumulative effect actually matters and at the very least it’s good karma.

Non-Exclusive License Agreement

Thu, 09 Aug 2012 16:04:41 -0700

Copyright law is incredibly complex so I’m only going to tackle a small part that I think has the most usability for artists and galleries.

We all pretty much know the basics: if you are a living artist making work, you own the copyright to the work. You (or your designated agent, i.e. your gallery) can grant certain licenses to use / reproduce that work because you own the copyright.

If you hire someone to photograph your artwork, you do not own the copyright to the photographs, the photographer does. He/she may grant the use of those photographs, request that he/she be credited as the photographer and/or charge a fee for their use.

Now let’s say that a collector or institution now owns the work. Who owns the copyright? The collector lawfully possesses the work but You, as the artist, still retain the copyright. And you can therefore grant a license to use reproductions of that work for educational, promotional and/or merchandising purposes or not.

Here is a sample of a non-exclusive license agreement. Please note that I am not an art lawyer and this blog post is not meant as law advice. This blog post is for educational purposes only.

Sample Non-Exclusive License Agreement

I, the undersigned, represent and warrant that I am the sole owner (or the authorized representative of the sole owner) of all copyright interests in the above referenced work(s) (the “Work”). I acknowledge that Collector has in its collection the Work and that the Collector requests permission to reproduce the Work as described below.

I hereby grant to the Collector, as of the date written above, a non-exclusive license (the “License”) to reproduce the Work, for the life of its copyright and any renewals or extensions thereof, in the media specified within this document, and to display, transmit, publish, distribute of and otherwise use the Images throughout the world as follows.

The Image may be reproduced for the sole purpose of educational and promotional materials related to the collection and programs and for record keeping purposes including, but not limited to press releases, web sites, social networks, annual reports, promotional flyers, email, direct mail, invitations, posters, films, television and membership solicitations.

The Images may not appear on merchandise for sale with the exception of exhibition catalogs and brochures. It may not appear on products for sale such as posters, postcards, apparel, and other merchandise.

I acknowledge that the above-listed uses may require editing Images of the Work. I therefore grant the Collector the right to “crop,” “bleed,” “detail,” and/or otherwise edit Images of the Work only upon prior approval of the artist or his/her authorized representative.

I agree that if the Work is/are lent to a museum or organization for exhibition purposes, the conditions set forth in this License will apply to such third party museum or organization.

The License shall be binding on my heirs, administrators, executors, successors and assigns.

Whenever feasible, the Collector shall include (and cause others to include) the following copyright notice, or one similar to it, in connection with Images (but failure to do so will not give rise to liability or be grounds for terminating this License):

[Courtesy of the artist and XXX Gallery, City, State]

I affirm for the Collector that I am the sole and exclusive owner of the copyright to the Work or the authorized representative of the rights holder and therefore able to grant the License, as requested herein.

Signature_______________________________________________

Printed Name__________________________________________

(If not Artist) Relationship to Artist_________________

Date____________________________________________________

Why Consignment Splits Between Galleries Vary

Thu, 02 Aug 2012 12:23:00 -0700

What do I mean by consignment split? It’s the amount of commission that is shared by two galleries upon the sale of an artwork.

Here are a couple of scenarios that could alter the consignment split.

Let’s say an artist has their primary gallery in LA, Gallery A, and that artist has a solo show in Paris with another gallery, Gallery B. Gallery A creates a consignment of the artwork on behalf of the artist. If Gallery B has shown the work before or if Gallery B shows a commitment to the artist, then Gallery A will usually split the commission 60/40. Meaning Gallery A gets 60% and Gallery B keeps 40%. Gallery A takes the 60% and gives 50% of the sale to the artist (artist almost always gets 50%) and Gallery A keeps 10% as their commission.

Sale $10,000

Gallery A $1,000

Gallery B $4,000

Artist $5,000

Let’s say Gallery B is only showing the artist in a group show or this is the first solo show with the artist, so it’s a brand new relationship. Gallery A will probably share less of a commission with Gallery B. So the split might be 65/35. Gallery A takes 65% whereby the artist gets their 50% and Gallery A keeps 15% as their commission. Now why is this? The rule of thumb that I’ve seen in most galleries is the amount of risk, commitment and time with an artist is what dominates the split. The less risk Gallery B takes on the less their cut.

Sale $10,000

Gallery A $1,500

Gallery B $3,500

Artist $5,000

There are also many exceptions to the rule. One big one revolves around Gallery B being a more prominent gallery than Gallery A. In those instances Gallery A gets no commission. They do the paperwork (i.e. the consignment) but they do not get a commission. Galleries sometimes fight tooth and nail for their commission because it’s not just about the money. It’s a power game and it sets precedence.

Here’s a scenario that might throw you for a loop. If Gallery B is consigned a work but Gallery A sells it before it reaches Gallery B, Gallery B often times will still get their commission even though they didn’t sell it.

Next blog post: Image Copyrights!

Consignment Invoices

Fri, 27 Jul 2012 19:32:43 -0700

Here is another Gallery post but as I’ve said before, it’s good for artists to understand how income is split when their work is sold, especially when there are multiple galleries involved.

If Gallery A (Consignor, entity doing the consigning and often times the primary gallery of that particular artist) consigns artwork to Gallery B (Consignee, entity being consigned the artwork) how does the income and production get split with all parties, including the artist?

All of the logistics are very clearly stated on the Consignment Form: sales prices, discounts to be split, commission allowed, production split, duration of the consignment, etc.

Once an artwork sells the Consignor Gallery A sends an Invoice to the Consignee Gallery B.

Invoice 2012 - 035

Artwork 1

Retail $10,000.00

Less 10% Discount -1,000.00

Subtotal $9,000.00

Less Artist Production -1,000.00

**IN A CONSIGNMENT PRODUCTION IS ALSO TAKEN OFF THE TOP, REGARDLESS OF WHO PAID IT (GALLERY A, GALLERY B OR THE ARTIST)

Subtotal $8,000.00

Less Consignment Commission (60/40) -3,200.00

**IN THE CONSIGNMENT FORM IT IS STIPULATED WHAT THE SPLIT IS BETWEEN GALLERY A AND GALLERY B. DEPENDING ON THE CIRCUMSTANCES, THE SPLIT CAN BE ANYWHERE BETWEEN 90/10 - 50/50. FOR OUR PURPOSES WE WILL USE THE MOST COMMON SPLIT OF 60% TO CONSIGNOR GALLERY A AND 40% TO CONSIGNEE GALLERY B. WHAT THIS MEANS IS GALLERY A TAKES A 10% COMMISSION AND PAYS THE ARTIST THEIR 50% AND GALLERY B KEEPS 40%.

Plus Artist Production +1,000.00

*GALLERY A RECOUPS THE PRODUCTION ON BEHALF OF THE ARTIST AND THEN SUBSEQUENTLY PAYS IT TO THE ARTIST ON THEIR ARTIST STATEMENT.

Total Due $5,800.00

Then Gallery A receives $5,800.00 from Gallery B and Gallery A pays the artist.

Artist Statement

Artwork 1

Retail $10,000.00

Less 10% Discount -1,000.00

Subtotal $9,000.00

Less Artist Production -1,000.00

Adjusted Subtotal: $8,000.00

Due to Artist (50%): $4,000.00

Plus Production Artist Paid: +1,000.00

Total Due to Artist: $5,000.00

So out of the $5,800.00 Gallery A receives from Gallery B, Gallery A keeps $800 and pays the artist $5,000.00.

Next Blog Post: Why consignment splits between galleries vary so much.