Building Your Portfolio Career Part 2: The 21 Income Models

This is part 2 in a series devoted to Portfolio Careers. For Part 1: Imagining the Mix, click here.

 

If you have money to invest, any financial advisor worthy of their corner office will suggest you diversify the portfolio. In other words, don’t put all your eggs in one basket. Include a variety of investment types so that if one tanks, others will soften the blow. This balanced approach allows multiple ways to reach your financial goals.    

The same logic can be applied to multiple-stream careers. Incorporate a number of income types in your portfolio. 

Below are descriptions of 21 income models.

#

INCOME MODEL

DESCRIPTION

EXAMPLES

1

Full-time salary with benefits 

Reliable, secure income year round. Because benefits are included, each paycheck is worth more than its face value. Cons include the large time commitment (will you have time to focus on other areas of your portfolio career?) and all of the disadvantages that accompany working for someone else. College teacher, arts educator, full-time orchestra position, arts administration

2

Full-time salary without benefits

Comparable to the previous category, except that you are responsible for additional expenses (health insurance, retirement savings, etc.) Same as above

3

Part-time salary

Part time work is also consistent and reliable. This solution requires less time, but also earns smaller paychecks.  With this option, you still must play by someone else’s rule book. Part-time music store employee, part-time teacher, part-time ensemble member

4

Consistent self-employed income

Dependable, recurring work. Self-employed options in general offer you more flexibility and control, but are riskier. When things go wrong, you have no one to blame but yourself. Weekly gig at a restaurant, private weekly music lesson

5

Sporadic commitment

An employer is committed to hiring you whenever relevant work becomes available, but the number of opportunities is undetermined. A business hires your band to play company parties

6

One off

An isolated gig unlikely to lead to additional work. Like a one night stand, these gigs might be fun and provide short-term benefits. But afterwards, you’re back to square one. Out of town wedding gig

7

Lump sum

You receive a lump sum to perform work over a certain period of time. The good news is that compensation is guaranteed up front, and pay day feels great. But you must be disciplined not to exhaust this income before the next installment arrives. Private music teacher who charges by the semester

8

Multi-pronged payments

You receive a certain amount now, and the remainder of payment later. Deposit for an upcoming gig, the rest of which is paid after work is complete

9

Flexible pay

For this category, a fixed amount of your time is required, but the amount earned is variable. Gig where you work for a percentage of “the door”; the bigger the audience, the more you earn

10

Work-for-hire

You earn a fixed rate, but the amount of time required is variable. A $3000 commission that might take anywhere from a week to a year to compose

11

High ticket item

Every portfolio should include at least one high ticket item that pays handsomely. It’s hard to make a respectable living when juggling $50 or $200 gigs. Even if there aren’t many purchases in the first couple years, design some sellable offerings. An in demand keynote speech that pays $2000, a unique event for businesses that commands $10,000 for the quartet

12

Freebie

Some opportunities don’t pay any direct income. Only take this work if it 1) provides another kind of valuable return (increased reputation, great networking, media coverage) or 2) has a high probably of leading indirectly to income. In most case, “employers” who propose freebies but promise “great exposure” are not to be believed. House concert for a potential donor

13

Grants

Grants can provide support for projects or an income source that allows you to focus attention on that project. These competitive awards are far from guaranteed. Grant that pays for you to compose a piece or make a recording

14

Prizes

Similarly, some competitions offer cash prizes. Obtaining this revenue is, well, competitive. Van Cliburn International Piano Competition

15

Gifts

Donors may offer financial support if they believe in your mission or project. (If you have nonprofit status, donations are tax deductable!) Contributors are more likely to donate to projects than personal income, but perhaps some of that money is directed to pay workers like yourself. Crowd-funding campaign through Kickstarter

16

Fundraisers

A huge array of fundraisers (from selling candy to auctions/raffles or donation-based events) are possible weapons for generating income. Concert where all proceeds are invested into purchasing a new instrument

17

Product sales

When selling a physical product, the investment of time and money is typically on the front end. Once it exists (and the initial investment has been paid off), additional income can be generated at gigs, through your website, or from other distribution methods. CD, book, scores

18

Advertising income

In order for advertisers to consider this option, you must have a platform and significant audience that offers the sponsor clear benefits. Local businesses advertising in a concert program, brass instrument manufacturer advertising on popular blog for brass players

19

Passive income

Passive income describes anytime you earn money without working directly for it. Private music school director who earns a percentage when other people teach lessons, a digital recording that sells online

20

Royalties

Royalties paid when your art is sold or reproduced. A jingle you recorded is aired, a composition of yours is performed

21

Investment income

Investments in stocks, bonds, and mutual funds can generate income. The greater the risk, the greater the potential return. Shares in Apple

As you can see, there are quite a few categories of income available to artists. While few portfolio careers take advantage of all the options above, including a variety is often a key component to reaching financial goals.

 

Stay tuned for Part 3…

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