The Cost of Not Thinking Your Career Through
With any kind of investment vehicle a legal caveat is required to be placed alongside promotional activities and typically runs like this:
Invest in Bitcoin at zero commission and start trading like the professionals. *Warning capital is at risk and you may get back less than you invested.
The legality behind this is to make sure individual investors, like you and I, take some time to think things through, understand the risk, rather than be blinded by the lust for wealth that the advertisement promotes.
Similarly, studying a degree such as a Masters in Performance (Acting) should also contain the following:
Fame and your time in the spotlights of West End begin in our classrooms. *Warning. Studying this type of degree dramatically increases your chance of long-term unemployment, will leave you skill-less, will limit your professional opportunities, will leave you financially illiterate and incumbent, and we make no guarantee of West End fame due to the hundreds of thousands of other applicants all going for the same one role. Capital is at risk.
Prospective actors are never told that the average time of employment per year for an actor is 17 weeks and that the average salary is $7000 per year! And that’s the lucky few who are employed.
The Actor’s Equity has a membership base of 51,938 as of 2019, 37% of which found some kind of employment during that year. But this inflated figure is not including the thousands of other artists who can’t afford, or have the necessity, to sign up to the Actors Equity as a prerequisite for employment!
Acting aside, at no point will young students, desiring a creative life and “following their bliss” ever be told the risks of their chosen profession.
I urge any of you considering a path of creativity, not to give up on your dreams but to truly take the time to think things through because the university, sure as hell, isn’t going to do it for you!
Presently in a declining economic climate, 2.7 million people in the UK alone have applied for unemployment benefits. Many of these are not just creatives, but blue and white-collar folks who took the traditional route. But they have something you don’t — hard skills that are interchangeable. Managing a theatrical production is entirely different from managing a product, something I learned the hard way.
As Covid-19 has shown, hard skills become ever more desirable, something that a performative degree cannot match; and as the world has shunned entertainment in order to survive, you may have to reconsider your inner justification that your creative craft is a human necessity…
So what are the hidden risks? Why are universities not held to the same standard as investments in the financial world considering you’re forking out a ton of cash? Let us continue to use acting as an example:
The Risks They Won’t Speak Of
The chart below is detailing the earnings of members within the Actor’s Equity. Recall, that only 37% of these members were employed. Within, that 37%, only 1% had a chance of making over $200k, and 68% had a chance of making between $1k and $15k, barely enough to pay the rent. These numbers barely improve year over year and are now non-existent due to the crisis.
“We are prone to overestimate how much we understand about the world and to underestimate the role of chance in events.” Daniel Kahneman — Thinking Fast and Slow.
The odds are weighted against you, not only that but the 1% tend to hold on to that power. The lead roles are given to those that exert the most power and influence reducing income mobility. Would you take these odds year over year when fame is such a long shot? Would you be fine struggling to pay the rent every month? What about the mental anguish in the lack of stability and minimal opportunity for creative expression?
Some may say that the art makes it all worth it but Covid-19 has shown that it truly isn’t the case when you rush to join the line at the food bank. Economic crises have a way of stripping away delusions of grandeur and the necessities of life make themselves revealed.
Mass Long-Term Unemployment
Even without Covid-19, finding paid creative work is scarce; your capacity for expression is the only fuel that justifies the sacrifices you make for the dream of one day making it. However, that creative capacity usually means you have to put everything else to the wayside; indeed, there is no half-effort in making it professionally, you have to go all in, and that means there is an exceedingly high cost you will have to pay.
As a performer, jobs are infrequent, you may have to drop things at the toss of a hat, only for the 3-week sprint to finish and you desperately try to find another source of income. This can last for years. Great internal stress is caused by the fact your time is now split between finding security and the desire to hone your craft. It is difficult to do both. Which one must you prioritize?
When others around you are having children and buying a house only because of the toil of grinding away for years at a 9–5, you will have used that time to dedicate yourself 100% to practicing your craft each day, if you have stability, in the hope of one day getting into the audition room with hundreds of other applicants that have all sweat as much as you did.
Are you sure you’re ready for years of unemployment, going from gig to gig? The energy required to sustain this lifestyle is not infinite, there is a limit; suffice to say, you may burn your boats only to find out at the age of 35 that you can no longer go on. Your options to rebuild yourself grow thin.
Financial Illiteracy And Your Future
Every one of us who works full time pays into a pension to secure a safety net for when we retire. Governments around the world force us to do this because firstly, we tend not to think long term and possess financial literacy, and secondly, there is a great risk that the government may not be able to subsidize your retirement through a state pension due to a longer-living population and fewer workers for every one retiree!
But what about workers who don’t work full time? Many of these are artists, who live and work within the gig economy, and this kind of work does not have the same compulsory pension payment requirements. Have you thought about your pension in between the pages of Shakespeare? Do you pay into one, and if not, why not? Did your university give you a crash course in the risks of not setting one up for yourself?
Money can’t buy happiness but it sure does ward off misery.
There is a real risk that the lifestyle you enjoy now will be a pipe dream when you’re older, as you have not saved enough for retirement to even be an option.
Let’s look at the numbers!
You’re 23 now. You would like to retire at 65 (the legal age you can access your pension in the UK) and live on a very modest £20,000 annually. That’s £1,666.66 a month ($2,180 USD). But adjusting for inflation at 3%, you will actually require £69,213.92 to have the same purchasing power in the year 2062 that £20,000 does now!
So, £69,213.92 is how much you’d like to withdraw from your pension for the first year of your retirement, so you’ll need a pension pot at the age of 65 to be worth £1,730,349.75.
It’s why governments force those in full-time employment to pay into one! If you haven’t been educated about why it’s necessary to start investing in one, it’s not your fault, it is simply a failing of the educational systems to prepare you for your future and the risks of your particular degree.
You might say, “I’m not going to pay into a pension because I don’t even know if I’ll be alive that long, so I am going to use my money now!” — but what if you are alive at the age of 65?
If you don’t know what inflation is (definition provided below), that is a warning signal that you were underprepared by your institution and you may have to sit down and consider some of the bigger issues affecting your life, at least, if not now, but in the future!
Have you thought about what you are giving up in the quest for fame?
Opportunity cost is used to describe the loss of alternatives when one other is chosen. You’re 28 now, and still hustling in the gig economy to support your craft. You’ve had a couple of paid jobs here and there that gave you a few more drops of motivational juice.
By this time you’ve sacrificed the best years of your life where one develops networks by accessing internships, skill sets, and allowing for routes to a career of some kind of stability.
You’ve also had no payments into a pension for the last 10 years, since your summer job at the frozen yogurt store. Even if you were paying a measly £80 a month for those 10 years (not including the employer’s contribution or tax relief) that means you would’ve saved in the ballpark of around £14k inclusive of £3.5k — £4k in gain and this number would be significantly higher with your employer’s contribution!
Earning enough for a deposit on a home seems far out of reach, especially with no full-time job to back your credit score. You’ve been living month to month that any money you may save is barely enough to cover your food let alone save for a house. A deposit tends to be around 10% in most countries, so a small flat for £400,000 means you will have needed to save £40,000.
You are paying a hidden cost every year an employer or yourself does not pay into a pension, the lost gains and dividends you could’ve made by investing your savings, and the work experience one can show on a CV; is it really worth it?
The partner you’re with is also 28, but her maternal body clock is ticking away. The discussions about children and family life, now start to take on more weight:
“Where are we going to live, we need a home? We don’t have enough for a deposit…how are we going to support a child when you have no stable income or experience to acquire a job to provide one? You haven’t had a paid performance job in months…”
Perhaps one option is to be a stay at home father because your partner has better career prospects with less risk, but that means giving up on all those years attempting for fame. Even the best investment fund managers have a difficult time cutting their losses, could you so easily throw it all away?
These are all discussions that if you don’t prepare for them now, or discuss them with your better half, have a habit of coming back to haunt you.
The Bottom Line
No career is safe and the inevitable rise of Automation puts everyone at risk, none more so than those in the gig economy, the sector for artists to subsidize their passion. So, here are some key things you can do right now:
- Diversify your risk. Put a plan in place to think about learning a skill on the side, such as programming, SQL, or UI/UX; or better yet, get a traditional degree alongside your creative pursuit; there you can have the best of both worlds. Many successful artists have full-time jobs that they use to subside their passion.
- Start paying into a pension and take your finances seriously; a short term mentality not only affects your retirement but your career and relationships. These are all thorny issues that we tend to avoid talking about but Covid-19 has brought to the forefront the economic consequences of not taking it seriously. Investing apps are a great place to dip your toe and get started, where you can start by putting away £5 a week to save for your future.
- Discuss the future with your partner — the easiest one to put off. If they want kids, you better begin by talking through the requirements of what that actually means: such as, when they would like to have kids, when to start saving for a deposit on a house, how to pay off a mortgage, do we have income stability, do we have enough of a credit-score to access a mortgage, school, etc. The bottom line is: can you do any of those things on the career trajectory you are on now pursuing your passion, and if not, how likely is it that kids are not an option? You’ll also have to consider that at the age of 22, having children is not appealing and one may never want to have them, but at the age of 30 and the window to conceive shrinks, people’s long-held beliefs may change…
Unemployment is a terrible tragedy, do not take it lightly. So, I urge you, take some time to simulate the future of your chosen career. There is a cost in not following your dreams but there is also a cost if you don’t prepare for the future.