Building Your Portfolio Career Part 3: Doing the Math

This is part 3 on a series devoted to Portfolio Careers.

Part 1 of this series examined the kinds of work streams that might be included in your portfolio career. Part 2 unveiled 21 incomes models that can be integrated. Now it’s time to do the math and determine your Portfolio Career Plan (PCP). As you’ll see, this process is quite logical. All you need is a pencil, paper, calculator, and a little creativity.

 

 

 

STEP 1: WRITE DOWN INCOME STREAMS

Determine all potential income streams that will play a role in your portfolio, as was discussed in Part 1.  For this hypothetical profile, let’s consider the income streams of musician Arty Q. Lation:

Stream 1: Private teaching

Stream 2: Gigs

  1. Parties
  2. Restaurants
  3. Concerts

Stream 3: Commissions

Stream 4: Part-time “day job”

As you can see, Arty maintains four large-scale income streams, one of which has three sub-streams.

 STEP 2: PROJECT ANNUAL INCOME GOAL

When projecting a blueprint for your portfolio career, the first number to determine is your Annual Income Goal (AIG).  How much do you hope to earn in a year?  How much do you need to live?

“As much as possible” is an unacceptable copout. Be specific. And here’s a hint: Earn more than you spend.

Your AIG should take a number of factors into consideration: mortgage/rent, utilities, transportation, family expenses, health insurance, debt, savings goals, etc. And don’t forget Uncle Sam!  For suggestions on budgeting, click here.

For now, let’s suppose your AIG is $50,000.

 SteSTEP 3: PROJECT INCOME PER STREAM

How much Income Per Stream (IPS) do you project throughout the year?  Obviously, the total amount identified should equal or exceed your AIG. If they don’t, there are three choices?

  1. Lower your AIG
  2. Add new streams
  3. Increase amount earned within various stream

At this point, you’re still guesstimating. What is a reasonable amount that could be earned from each activity?  For example:

  • Stream 1: Private teaching                 $20,000
  • Stream 2: Gigs                                         $22,000
  • Stream 3: Commissions                       $3000 
  • Stream 4: Part-time “day job”              $5000

            TOTAL:                                                          $50,000

 STEP 4: DETERMINE PATH TO REACHING IPS

At this point, figure out what you need to do to reach your IPS targets. As you break down things further, numbers may need to be adjusted in one direction or the other. Here is what Arty eventually determined.

Stream 1: Private teaching                $21,600

Arty charges $45 per hour for private students, and the average student takes 40 lessons per year.  He will secure 12 hours worth of students.

12 hours x 40 lessons per year x $45 per hour = $21,600

Stream 2: Gigs                                   $19,800

As we saw above, Arty is involved with three categories of gigs. His wedding band plays around two private parties per month (24 per year), paying an average of $250 per engagement. He has a regular restaurant gig 2 nights per week, around 45 weeks per year when accounting for vacation and sick leave.  While compensation is just $100 per evening (plus dinner!), the work is steady and fulfilling.  He also performs concerts with various groups.  Though these engagements are sporadic, they average about $400 per month.

PARTIES: 24 gigs x ca. $250 = $6000

RESTAURANT: 2 nights per week x 45 weeks per year x $100 = $9000

CONCERTS: ca. $400 per month x 12 months = $4800

TOTAL: $6000 + $9000 + 4800 = 19,800 

Stream 3: Commissions                     $3000

Arty has already lined up 3 consortium commissions for this year, paying $1000 apiece.

3 commissions x $1000 each = $3000 

Stream 4: Part-time “day job”          $5400

Arty has a part-time music store job, which pays $10 per hour.  He is employed around 12 hours per week, and will probably work the equivalent of 45 weeks throughout the year.  

12 hours per week x 45 weeks x $10 per hour = $5400

TOTAL:                                              $49,800

$21,600 + 19,800 + $300 + $5400 = $49,800

 Notice how several of the IPS numbers changed during this phase. That’s a common part of the process.

The nice part of breaking things down like this is that Arty knows exactly what he must do to make his AIG a reality.

 STEP 5: ANALYSIS

In this blueprint, Arty came pretty close to his AIG.  Just $200 under.  If nervous that this model cuts things too close, he might try securing another commission, getting another student, asking for an extra hour per week at work, or hustling gigs just a bit harder.

The model above doesn’t used hyped numbers or an unrealistic scenario for portfolio career musicians. If anything, it shows that making $50,000 annually in this field is absolutely possible with the right blueprint. Even in this age of unemployment.

Obviously, if your goal is $75,000, $100,000, or $150,000, the career puzzle becomes more complex. Will you add more streams? Charge more per hour? Work more hours in a given stream?

But whatever you do, figure out your PCP on purpose. Do the math and think things through. This is too important to leave to chance.

Related Posts with Thumbnails
Share and Enjoy:
  • email
  • Print
  • RSS
  • Facebook
  • Google Bookmarks
  • Digg
  • del.icio.us
  • Technorati
  • StumbleUpon
  • Mixx
  • Blogplay
  • Yahoo! Bookmarks
  • Yahoo! Buzz

117 Responses to “Building Your Portfolio Career Part 3: Doing the Math”

  1. Llamo al servicio de atención al cliente de Electrolux, que me dicen que se interesarán por esta situación. La lavadora que compre, porque he de comprar una lavadora nueva no será de ninguna marca que tenga este servicio técnico. Al lavavajillas también tuvo que sustituirle gran parte de la electrónica, conservo las facturas de su servicio técnico por la reparación.

  2. Like savvymusician.com– very user-friendly and lots to see!

  3. Brandon says:

    hi!,I like your writing very much! share we communicate more about your article on AOL? I need an expert on this area to solve my problem. May be that’s you! Looking forward to see you.

  4. Art & Illustration Design

  5. I do agree with all of the ideas you’ve presented in your post. They are really convincing and will certainly work. Still, the posts are very short for beginners. Could you please extend them a bit from next time? Thanks for the post.

  6. a0 poster says:

    Hi! This post could not be written any better! Reading this post reminds me of my previous room mate! He always kept talking about this. I will forward this page to him. Fairly certain he will have a good read. Thank you for sharing!

  7. Is certainly Joomla software harder than Dreamweaver to understand. I have been told that Joomla is easier than Dreamweaver. Perform Joomla make its own requirements like Dreamweaver. I want to learn it and I want to buy the software. Make sure you give me your opinion. Should i buy the Joomla program or not?.. Thx, God bless, take care!.

  8. poster size says:

    Hey very nice website!! Man .. Beautiful .. Amazing .. I’ll bookmark your blog and take the feeds also…I’m happy to find a lot of useful info here in the post, we need develop more techniques in this regard, thanks for sharing. . . . . .

  9. Most probably the mag doesn’t do deals with each source it reproduces, so how does copyright laws law permit them to re-print editorial articles that they will don’t personal without paying royalties?.. Also, can this law be applied internationally?.

  10. How do you reply to comments on your own blogspot blog?

  11. elogmovie says:

    This design is incredible! You definitely know how to keep a reader entertained. Between your wit and your videos, I was almost moved to start my own blog (well, almost…HaHa!) Excellent job. I really loved what you had to say, and more than that, how you presented it. Too cool!

  12. Will there be a computer system that will automatically start additional programs?

  13. A visitor who’ll seek after to a genuine desert excursions can participate in different angles regarding them say for instance a BBQ Dinner, Dune Safari, Overnight desert safari, and so on. Such treks can energize and will likewise take sightseers over the great sand rises. There are likewise puts the area where the vehicle stop, the ones can click photographs

  14. Grab the best deals and packages through our website.

  15. What resources are available to anyone wanting to set up a creative writing program?

  16. Mindy says:

    certainly like your website but you have to check the spelling on quite a few of your posts. Several of them are rife with spelling problems and I find it very bothersome to tell the truth nevertheless I will definitely come back again.

  17. The INTEREST RATES doesn’t necessarily compensate appeal for almost any too much tax bill repayments, therefore you are really bringing this inside slacks by simply not altering the duty repayments.

Leave a Reply

Powered by Wordpress | Designed by I Design Blogs