So, Marketing huh?

It's been slow AF the last few weeks. The last few months. The last few years. It's been a rough few years thanks to covid interruptions, entertainment industry strikes, global economic uncertainly, etc., but just knowing that doesn't make it feel any better. If you're reading this and I've worked with you before or you're looking my direction as a potential vendor or crew member, know I'm crazy grateful for those I've been able to work with and look forward to more opportunities with you down the road.

This past week I've been thinking quite a bit about marketing. My Instagram feed has been flooded lately with sponsored ads from photographers, cinematographers, and production companies. While I'm not here to dump on other creatives trying to claw their way into our attention, I'm certainly not the target audience for what I've been getting – unless it's a Machiavellian attempt by Meta to get me to spend my own money to advertise on their platform.

The professor my Strategic Management class this past week mentioned that "You can have the best product [or service] in the market, but if you're not spending any money on marketing, there's a direct correlation to not selling any products [or services].” As a small business, I don't have a set percentage of my revenue I'm spending on marketing, but there's no reason I shouldn't be considering it.

Right now my obvious marketing efforts include my website which I can put an actual dollar amount to, as well as the networking events I attend and my public facing social media accounts, both of which are much harder to account for. Those social media accounts are free to have, but I do go through financial resources in producing some of the content. There is some strategy involved with what, how, and when I post, but not to the extent of an actual marketing plan. There's also these blog posts, but considering my website traffic, let's just admit they're more of a welcomed distraction from doing actual work that'd advance my professional life and increase my revenues.

Back when I first got started as a cinematographer, demo reels were where it's at. I've still got a handful of my 2006 demo reels on burned DVDs. Pretty sure the only one of those demos that actually got sent out was when I applied for a video producer job at Life.Church at the time. Never got that job BTW. My current demo is the same one I've had since 2018 and made up primarily of personal work. There's footage from a couple paid gigs buried in there, but it's just over 10% of the total edit. I do a great deal of "talking head" type shoots, but that kind of footage doesn't seem to add anything to a demo. For that kind of nonsense, I've got a dedicated page of screen grabs and details that I send out to clients. I know my demo reel should be updated with more recent content, but it's hard to look at the last few year's worth of work without being impossibly critical knowing how slow things have been due circumstances out of my control.

You'd need to speak to someone who's regularly hiring new DPs and cam ops, but I couldn't tell you the last time I seriously paid attention to someone's demo reel let alone sit through the entire thing, especially if it's longer than 60 seconds. I've hired DPs and cam ops over the years for different projects, but it's mostly via connections I already have as well as referrals from the network I've developed. Those connections lead me to that individual's website and at least their Instagram account if I'm not already aware of their work.

Lately I have been more interested in other types of marketing material. One idea is putting out a printed promo of some kind. Possibly something like a photo zine of my still photos and frame grabs from my motion work that'd get sent out to select agencies and creatives. I've been following aPhotoEditor for years and love seeing the photographer promos that get sent in and shared. Can't say I've seen a ton of cinematographers do something like that, but it could be an option. Honestly I'd never heard of zines till I got started on my rubber stamp project a few years back. If you're interested, I've started a YouTube playlist with some references in putting one together.

There's also the idea of a YouTube series that's been bouncing around in my head now for weeks. There's still quite a bit I'd want to flesh out before doing a show, so that's certainly a long ways out if it were to ever happen. I do already have bits and pieces that I'd include in something like that, so it's not completely out of reach. It'd be partly a marketing effort seeing as how it'd showcase the kinds of work I do, but I'm hesitant to be the center of attention like so much of the YouTube content out there; surely there's ways around that.

Can We Talk About YouTube?

This past week or so I've been trying to justify the last 500+ days of my life and my shiny new student loans. In March I'll be a self-proclaimed creative with an actual master's degree in business and instead of being productive and furthering my professional life, I've been digging into YouTube and trying to smash together the creative work I do and some of what I've learned in business school.

No question, I spend far more time consuming video content on YouTube compared any other the other streaming platform (Netflix, Hulu, Disney+, Amazon Prime, etc.). We've got an antenna connected to our TV to get the basic channels and it's been at least a decade since we've had any kind of cable subscription.

According to November 2023 Nielsen data, streaming made up more than 36% of the total TV usage with YouTube alone claiming 9%. Having been around before the internet was a thing as well as essentially growing up with it, seeing traditional network TV be eclipsed by streaming is bonkers.


There's also the ginormous advertising revenue YouTube brings in. Back in August I'd posted an MSNBC video here on this blog that went on about changes in TV viewing and advertising revenues amongst some of the social platforms and traditional media outlets. In 2022, YouTube brought in $29.2 billion in ad revenues, completely dwarfing their competition.

So why bring any of this up?

After the boys went to sleep on Christmas Eve, Anne and I wound up watching some old videos of us on my YouTube channel. Before each video started, we'd have to sit through one or two ads on the work I'd created and I'm certainly not seeing any of that revenue. YouTube is a free service and I know they cover their expenses and make a profit from advertising dollars, but dang I'd have liked to pocket even a sliver of that ad revenue.

Right now my YouTube channel is swimming in old videos from 2006 till 2013 when the cool kids left for Vimeo. The golden age of that video platform is way gone, but somehow I'm still paying them $59.95/yr for a Vimeo Plus membership.

If you've been paying attention, you'll know there's some independent YouTube channels bringing in some outrageous revenues. There's a financial YouTuber I watch with 833k subscribers who laid out his numbers and revenue streams recently. That video sent me down a rabbit hole of similar ones from other independent creators: the productivity dude with 5.1m subscribers and the millions he earned in 2022; a music composer with a PhD and 4.71k subscribers; this dude talking about how much money his wife's fitness channel makes.

In considering what it takes to get monetized on YouTube, it's something like 1,000 subscribers and 4,000 public watch hours in the last 365 days. Currently I've only got 310 subscribers and 120 public watch hours. Needless to say, if I'm ever wanting to see a dime from those ads in front of my videos, I've got quite a hike ahead. That said, I'm not opposed to the idea.

I'm clear-eyed enough to know this isn't a "get rich quick" thing, regardless of what the YouTube algorithm has fed me. Turns out there's also business models built around buying monetized channels, but from what I've read it sounds like a bad idea. There's so much information available on how to get started doing this nonsense, and plenty of it has got to be just hot steamy trash. Thursday I spent 45+ minutes listening to two art YouTubers – of course that's a thing – with their aptly named "How to Avoid the Artist to Content Creator Pipeline on YouTube."

Surely the world doesn't need another YouTube channel, let alone one with my face plastered all over it. Considering how long it takes me to write a single blog post, would I actually have the bandwidth to keep feeding the YouTube beast? Being on the tail end of my MBA and the 1,600+ hours of studying I've logged since fall 2022, what I know now still seems incredibly small compared to what I know I don't know.

Still, I like the idea of sharing some of the conversations I get to have with people who are much smarter and more interesting than I am. I'm also a fan of attending film festivals as a networking opportunity, but questioning the value of paying film submission fees when instead I could post my project online and use that festival submission budget on a promotional campaign.

Staying self-employed, providing for my family, and helping others are still the main goals. The fact that I've been able to make a living in part due to passive income streams seems like a magic trick compared to the alternative. The tremendous time and effort I've dumped into business school was meant to be a long-term investment instead of simply buying more gear I'd end up replacing a few years later. Surely I can position some of what I've learned in a way that legitimately helps others, covers my expenses, and turns a profit.

Surely the world needs more of this kind of nonsense though:

 

UPDATE: March 2, 2024

The fact that our six-year-old could barely leave the room as I'm writing this because there's an image of MrBeast on my screen is telling.

Wisecrack is one of the YouTube channels I've followed for quite a while and recently they released a video titled MrBeast and the Toxic Culture of YouTube. It's a long watch and goes deep – it's a philosophy channel after all – but certainly worth your time considering this post. The video goes into depth about a recent Times article, "In the Belly of MrBeast" written by Belinda Luscombe.

One quote from the Times article that I don't remember from the Wisecrack video but is wildly alarming goes into how much time this dude is spending on set.

It all requires an enormous amount of time and effort, especially for someone with a finely tuned need for quality control. Donaldson has 15-hour filming days 20 to 25 times a month and devotes the other days to Feastables. But he’s always been a guy willing to knuckle down if he thinks the payoff will be there.

20 to 25 15-hour filming days a month. For anyone working in production, that's insane and not at all healthy let alone sustainable. It's certainly not an example to follow.

More importantly, there's this line that should raise some major red flags:

“These algorithms are poisonous to humanity. They prioritize addictive, isolated experiences over ethical social design, all just for ads,” he says. “It’s not MrBeast I have a problem with. It’s platforms which encourage someone like me to study a retention graph so I can make the next video more addicting."

I'd mentioned my six-year-old earlier. That 40lb house fire thinks this YouTuber hung the moon. "He helps people." He went on to tell me in detail about several different videos he'd seen where MrBeast gives out life-changing amounts of money to people who could honestly use it. Surely that's a good thing, but how do I approach telling my kid about all the other nonsense involved with making that happen let alone some of the ethical concerns?

Short-Term Investment Returns as a Freelancer & Small Business

So, checking in on a certain blog post from January 2023. That one where I rambled on about short-term investments for freelancers & small businesses. It's been a full year to simmer on and experiment with this nonsense and wanted to share where I landed.

First off, it's worth mentioning that financially, 2023 was a hot mess. Those interest rate hikes intended to cool inflation seem to be making for the soft landing the Fed was hoping for, but the process still felt like riding an unfinished roller coaster in the dark. Higher interest rates made borrowing more expensive, and that certainly meant it was harder to finance production budgets. That squeeze showed up in my stock footage sales which were down about 48% from 2022 and down 51% from a five year average. Then came the entertainment industry strikes. Serious kudos to both the Writers Guild and SAG-AFTRA for holding out and getting good deals, but the process and industry fall out wasn't pretty, especially for those working in production. Thankfully I wasn't directly impacted by the strikes and personally can't blame it for a slower year – my labor income was actually up 6% from 2022 and up 12% from a five year average. That said, I have plenty of friends in film production who are seeing their revenues be well below normal.

I'm not here to whine about a genuinely rough year, but did want to share one of my wins. Last time I'd mentioned it, U.S. Treasury bills (T-Bills) were sitting at just north of 4%. Around the end of May 2023, the 4-Week T-Bill peaked at a 5.9% coupon equivalent. These nearly risk-free short-term investments weren't a bad place to park your short-term money, especially considering the alternative of just leaving it in a basic savings account which as of Dec. 18, 2023 is 0.46%. I'll not go into the details about T-Bills here, but if you're interested, go back to that previous blog post where I dig into that glorious bond nonsense as well as high yield savings account options.

Part of the way I track my financial nonsense is based on the gross profit of each project. From that gross profit, I set aside 20% to cover end of year taxes and tax prep fees. For example:

MathJax example

\[Project\ Revenue\ - Project\ Expenses\ = Gross\ Profit \] \[$1,000 - $100 = $900 \]
\[Gross\ Profit * 20\% = Set\ Aside\ for\ Tax\ Purposes\] \[$900 * 20\% = $180\]

Instead of just parking that cash in a savings account like I'd normally do, this year I bought U.S. Treasury Bills directly from the U.S. government at treasurydirect.gov. You can only buy T-Bills in $100 increments, so my individual purchases ranged from $100 to $7,500 throughout the year.

This is where I'm supposed to talk about how I did everything according to plan. Instead, for the first few months of the year I used a good deal of that tax money set aside to pay down business related debt from 2022. The return I'd have made in those short-term T-Bills making 4-5% wasn't worth the interest I would've been paying on that debt with its 15+% interest rate. Once I got that debt paid off I returned to my short-term investment plan, refilled those cash reserves spent to pay down debt, and kept at it throughout the rest of the year. I also planned it out so that those purchased T-Bills would all mature by around mid- to late-December, allowing me to cover my business taxes and tax prep fees.

I experimented with buying different lengths of T-Bills throughout the year, but for the most part just stuck with buying the 4-week option which is the shortest period available. There's a difference in the interest rates for each of the other options and the longer term ones generally earned a higher return, but I calculated everything out and with the amounts I was dealing with, it didn't make a considerable difference. At first I was buying the T-Bills in one-period increments, but then started setting them up to where at maturity they'd automatically reinvest for another period at the current rate.

I'm a big fan of financial transparency. As a household, statistically we're in the top 20% of income earners in the U.S. according the U.S. Census Bureau. St. Anne the Wife is a public school teacher with two masters degrees here in Oklahoma, which according to USAFacts ranks 35th in the nation in terms of teacher pay. I'm a self-employed creative with a bachelor's degree and will finish my masters degree in business (MBA) this March. Currently my take home pay is less than half of the the average MBA salary here in Oklahoma and I'd honestly prefer to keep doing my own thing after graduation, so take that however you will.

Could I be earning more than I am? Yes, I believe so.
Am I primarily motivated by how much money I can make and having more things? No.
Do I enjoy the work I get to do? Most of the time.
Am I doing the right thing and providing for my family? I sure hope so.

I feel like if we were more open about our finances it'd help others in figuring out their own financial nonsense. It's one of those "rising tide lifts all boats" kind of thing. There's a Planet Money podcast with comedian Maria Bamford and financial transparency that I'd recommend if you're interested. With that in mind, by the end of November 2023 I'd done about $111,000 in actual revenue had a gross profit of $82,000. That left about $13,000 set aside for end of year taxes purposes. That number is a bit off from an actual 20% due to one of my larger clients this year requiring me to be hired and paid for my labor fees as a W-2 contractor instead of a typical 1099 S-Corporation and they withheld those taxes on their end.

Below is a line chart of what my actual cumulative U.S. Treasury Bill earnings looked like compared to what that same amount of cash would've done had it just sat in my savings account throughout the year. Here's a line chart of what my actual cumulative U.S. Treasury Bill earnings looked like compared to what that same amount of cash would've done had it just sat in my savings account throughout the year. You can tell I had some small successes and got more confident during the summer, then got serious about this hot mess starting in the fall. It's worth noting that the returns are directly related to the amount invested, hence that bar chart above. Like I said, I stopped jacking around and got serious in the fall. My cashflows are typically very low in August, but ramp up considerably right after that.

Let's be honest: $150 extra isn't all that much, especially considering the infrastructure and spreadsheet work I put in to track all this nonsense. That said, no question I'll take that return over that $13 I'd have made otherwise had I just left that cash sitting in a basic savings account. Let's not get into the fact that I'd have had a $335 return had I stuck with my plan through the entire year instead of paying off that business related debt those first few months. Will I continue doing this in 2024? Yep, and I've already started. As of the end of December 2023, those four week T-Bill rates are still up in the 5.4% range.

Maybe the biggest takeaway was the fact I wasn't freaking out the last few months of the year. Normally I'll end up digging into that financial cushion more than I should to cover other expenses, leaving me scrambling for cash at the end of the year. This short-term investment nonsense put just enough room in-between me and that cash reserve to keep my hands off it.

Another takeaway is the fact that I saw positive gains with little to no risk and without putting myself in a bind. Again, an additional $150 return isn't much considering I spend about that on coffee each month. Previously I've justified digging into my cash reserves to buy gear I'd assumed would pay for itself, but it doesn't always work out.

I'm also avoiding the fact that the small stock market portfolio I'm actively managing – not our retirement accounts – is up 40% year to date compared to the S&P 500 being up 24% this year. Me being greedy is thinking about how I could've put that short-term cash into the stock market and made a much heftier return, even after paying the short-term capital gain taxes. But then there's the scars from last year and the S&P 500 having been down 18% in 2022. I'm considering putting a small amount of my profits into the stock market via my S-Corp and actively managing that portfolio as well, but haven't started just yet. For sure that'd be a long-term investment decision and one outside my regular SEP IRA retirement contributions.

Polishing those Steaming Piles

So we're nearly halfway through the second module of this fall semester. The amount of MBA classwork this time around hasn't been as thick and I've had more margin for things outside graduate school. This past week had me mixing up new batches of film developing chemistry and processing six rolls of film I'd put through my RB67. I've yet to scan in all that nonsense, but I did find a few images I felt were more than just hot turds.

It's kinda wild to think I'll be wrapping up business school soon enough. I'm on track to finishing up my master's degree in late March and then walking across the stage in Norman for an awfully expensive piece of paper. Seeing as how I've not been drowning in classwork these last few weeks I've had more time to consider what's next (potentially). You'll notice I'm not laying out some grand business plan nor am I moving into consulting or investment banking like some of my freshly minted MBA peers. I honestly did consider jumping to that seemingly greener side of the fence though, especially considering how bad it's been in the film industry this past year.

A few ideas are banging around that I'd like to pursue once I'm done with this educational self-abuse, but they're still cooking. That rubber stamp documentary needs to be cut and there's a bit more content I'd like to include in it. There's already been a decent amount of licensing revenue coming in from some of the footage, so if nothing else that film project has already been financially successful.

What's been incredibly humbling lately is the idea of "It's not what you know, but who you know." It's much easier to be critical of what others are putting out than making your own hot mess or even partnering with others who're much farther along than you give them credit. I feel like I've got ideas and approaches to the kind of creative work I'd like to be doing, but then get butt-hurt seeing those little darlings crumble under the weight of reality. Still, if this is the professional choice I've made for myself and my family, I'd better be prepared to be sitting on one of those inflatable donuts more often than not.

Ideally, the goal would be to continue following some of those shiny things that keep my attention and share them with others in a meaningful – and profitable – way. Right now that looks like developing new projects, partnering with others and their existing assets, and using what I've learned to improve the financial health of those who are better at the art kid side of this creative work.

Telling Strangers on the Internet how much money I make

A dude on the internet I've never met but followed for years and totally respect has been posting a series related to money and creatives. I've already posted a couple of my faves here on the blog, but when he dropped a link for anyone who'd be interested in sharing their experience I jumped at the chance. Now it's out in the world and kinda feels like standing there naked in a cold room in front of a doctor and their 58,000 social media followers.

Is this a flex by any means? Oh, goodness no. You saw how much I make, right? Do I believe in honest transparency in hopes of helping someone else who may be in somewhat of a similar position? 100%. Is there a bit of irony there in the fact that the Instagram post didn't include my name? Well... Pretty sure anyone determined enough to find out who it is knows how Google works.

When I was first getting started as a freelancer, I don't remember having honest and open conversations with other freelancers regarding their relationships with money and finances. Now I'm probably too open about it and more often than not overly pessimistic. Surely I'm loads of fun at parties.

Rather than rehash what I'd already written for that dude's survey, I'll let you scroll through his Instagram post of my response embedded above.

Thinner for Sure

Well, it had to happen at some point... I got sick and tired of looking at spreadsheets. At least for a day or two. I've learned to do some pretty fancy-pants math this past year with all the finance classes I've been in, and yet I still make a living behind a camera.

Truth be told, that living has gotten quite a bit thinner this past year. I'm sure there are plenty of reasons: businesses have tightened up their spending due to economic uncertainty, the ongoing writers' and actors' strikes, me being insanely busy with school, plus I could just be difficult to work with and terrible at how I provide for my family. There's also the grim reality that August is on average my slowest month work-wise and my monthly stock footage sales are down nearly 60% this year. It's all sunshine and roses over here if you can't tell.

I'm not typically on many narrative film & TV projects, and from previous writer's strikes, I'd assumed there'd be an uptick in reality TV work. I stayed crazy busy earlier this year on a couple different shows, but according to this PBS NewsHour piece, unscripted shows haven't necessarily been thriving.

It's a weird and crazy difficult time to be in this industry at the moment. I'd never seriously considered the MBA I was busting my tail to get to be some kind of professional parachute, but damn I'm glad to be picking up some new tools along the way.

Speaking of picking up some new tools, this MSNBC segment on the entertainment strikes was absolutely speaking my economics love language. Why on earth the presenter didn't mention YouTube's MONSTER amount of advertising revenue for 2022 is beyond me. Of the $77.7 billion in ad revenue listed on this dude's chart, YouTube's $29.2 billion was 201% more than the averages of the other five and 37.5% of the total. Essentially for every $1 the other providers got in ad revenue on average, YouTube got $3.01. Another way to think about it, for every $100 in advertising revenue, YouTube gets $38. That's freakin' bonkers.

The summer session just wrapped up last week and had me finishing out classes in Real Estate Finance and Financial Statement Analysis. Those two should be the last math and finance-heavy classes in my graduate program (unless St. Anne the Wife is game for me to go after my Masters in Finance too). Again, what I've been studying is on the opposite side in terms of helping me light a set or film a scene, but certainly helpful in polishing those business school superpowers I've been working on. I can tell you EXACTLY how much I'll have to pay back on my student loans and show you how to do the calculations.

This week starts the fall semester and I'll be in classes first dealing with Negotiation and Marketing Management, then Advanced Leadership and Organizational Behavior later in the semester. As long as everything goes to plan, I'll be done with my MBA in the spring.

Let me know if you want some help in calculating a loan payment or figuring out some short-term options with some idle cash. You could also hire me out as a filmmaker too.

Digital Bread Crumbs

I'm supposed to be studying for another exam right now, but my head is still mushy after a nearly three hour midterm earlier this afternoon. So instead I'll ramble on about how these last few months have been a blur with me still trying to balance work, family, and grad school responsibilities.

There was a trip out to Indiana a few weeks ago where I ate a tiny octopus, lost another fancy pen, and chased high school theater kids around. Then a few days dodging weather delays and scheduling issues with a good crew and a camera package I mostly enjoyed. Out in Connecticut I ate well and closed the rings on my Apple Watch each day before 10a while working with a bunch of younger student athletes. Don't forget that other shoot with the Cherokee Nation and their rad XR studio out in NE Oklahoma before that quick trip out to Shreveport so I wouldn't miss our younger monster's birthday again. I believe there was a film festival and an U.S. military air show in there somewhere too, but I was much younger then.

I have these photos on my phone that act like a trail of bread crumbs to remind me of where I've been lately. Forget actually trying to make something interesting looking, I'm just trying to remember what happened.

What's kinda wild is that my bread crumb photos have all sorta started looking the same. I wear the same blue collared shirt when I'm traveling by plane to a job and airports for the most part all kinda have the same look and feel. Then there's the black collared shirts I'll wear on set in trying to look like an adult. Well, unless I know I'll be working mostly outside and then it's the safari outfit with the green bandana to subtly let others know I'm down for women making their own decisions. Then there's the "Where'd I park?" and "I should take a photo of this lighting setup so I can remember what we did" set of photos. Not too long ago I'd mentioned something to St. Anne the Wife about how normal it is in this line of work to be picked up from the airport by complete strangers, work with them like crazy for a few days, and then peace out at the end of the job never knowing if you'll ever see them again.

I know too I wrapped up a couple more MBA classes around the end of June, then jumped straight into two more. During the summer semester we've had each of those eight week classes essentially crammed into two, five-week periods. I keep telling myself (and the wife and kids) that this short-ish 18 month period of doing my MBA won't last forever and will be crazy helpful in the long run.

In time, things will calm down and I'm sure I'll be bored out of my mind along with thinking I'll never work again. At least during this round of crazy busy I'm not fighting off "stress induced physical pain."

Smashing Together Art Kid Assets and Math

You know what feels nearly pointless? Trying to come up with some concrete numbers on the actual return on the investment (ROI) I've made on my gear over the years. By all means, I've got access to those numbers considering the detailed records I keep, but the wheels fall off once I start digging into the minutia of the individual items in my kit, the associated costs, and what I've charged for every single job.

It's not hard tracking the the big ticket items like camera bodies, lenses, computers, etc., but good grief I've wasted nearly a full week trying to come up with the actual breakdowns of what I've spent on the additional accessories to make those big ticket items functional and how I've charged for them. There's also the revenue made from my stock footage sales – because I keep detailed records with that nonsense too. Let's not even get into how I dug through my tax returns from the last few years trying to plug in the deprecation on my larger asset purchases and how that factors into this fool's errand.

Why even attempt something like this? Well, for one thing, I had this past week off in between my MBA modules. Two, and more importantly, I'd like to know how much my assets are costing and making my business. It's not like my business is rolling in money (just ask Saint Anne the Wife), but dang... If there are better ways to spend and invest extra money, why wouldn't I try to figure that out?

Ideally, I should be able to track my gear purchases, the rates I charged clients each time I used that specific item, and come up with a specific date as to when that item paid itself off and became profitable. Ideally too if I got to the end of the useful life of the equipment and sold it off, I'd be able to plug in the amount I'd sold it for (salvage value). From that thicc spreadsheet of data, I'd be able to come up with an economically sensuous-looking graph showing the fixed cost and an upward-sloping line following the cumulative amount I'd made with that purchase.

For example, just comparing the rough costs of my RED camera packages (not including lenses, lens accessories, tripods, EasyRig, etc.) and Mavic 2 drone kit and the amount I've made via only my Filmsupply stock footage sales, I've made a 133% return on those assets.

But alas, even with all the records I've kept since starting my business nearly 15+ years ago and given my current equipment list and constraints, I'm pretty sure it'll take me more than a week to accomplish my goal of knowing which individual asset is making what. Like, I'm assuming there's a difference in the ROI percentage on a camera body that'll age out in 5-10 years vs. the type of long-term return on lenses and light stands. This is probably why firms employ accounting departments. Surely there's software out there that'd track all this and if not there should be, especially for small firms like mine. Sidenote: I'm starting a Management Information Systems class this week where I'm sure we'll dig into something like what I'm talking about. Twenty bucks says I'll end up developing my own relational database system that'll track all this nonsense.

This last MBA module had me in a Managerial Economics class where we were studying pricing models and using some geometry to calculate demand, marginal revenue & costs, profit maximization, and some other nonsense. Turns out my small business is essentially in a monopolistically competitive industry where there are many buyers and sellers, where each firm produces a differentiated product, and there's free entry into and exit from the industry. I say "essentially" because there's not really "free entry and exit" considering my upfront costs, but I'm nearly certain you're not here for a graduate-level academic lecture on the economics of a freelance cinematographer. Remember that geometry we were using to calculate profit maximization, here's what that kinda looks like.

Is it essential to know all this? Hard no. It doesn't take a graduate-level business degree to be an art kid. I will say though that having a better understanding of this hot mess should allow me to make better financial decisions related to the work I get to do as a creative.

One of the beefs I've had over the years is working on client-provided gear that actually hindered the work I was doing. As a freelancer, I'd be on set using their prosumer-ish and broken-down equipment while the staffers were nursing sunburns and hangovers after another weekend at their lake houses. As a camera operator, am I better able to nail a challenging focus pull with a higher-end cinema lens and follow focus vs. a still photo lens? Yes. Will that precise camera move look better on a higher-end tripod compared to that $150 excuse for one? Yes. Does the image quality and actual on-set working experience you get out of an Alexa, RED, or even the higher-end Canons and Sonys stomp what you get out of those lower-end camera bodies? Again, yes.

All that said, it doesn't always make financial sense to be using high-end gear. I feel like this is where the art I get to do smashes up against the actual math.

"Does it make more sense to buy or rent that particular item?" Show me the math.
"Is my $13,000+ tripod actually necessary for that locked-off interview?" Well...
"With the clients I normally get to work with and the market I'm usually in, should I get a matching pair of Alexa 35s kits when a set of Sony FX9s packages would accomplish the same goal?" Hmm...

Show me the math and let's talk about the potential long-term revenue models.

We Need More Weird Stuff

Normally I'll just delete the Short of the Week email I've been getting for goodness knows how long. But every now and then I'll ignore the black hole of responsibilities just long enough and find gems like this short film by Babak Ganjei.

What's more rad is the fact this short film was from the same people who brought us the weird AF surrealist horror comedy Don't Hug Me I'm Scared. And more rad-erer is the fact that YouTube series by Blink Industries is now a fancy pants TV show on British Channel 4 (that I can't watch here in the U.S. until I figure out how to use a VPN).

In a roundabout way, this nonsense connects me even more with a podcast I'd heard last week. The Daily podcast from The New York Times interviewed one of their own, film critic A.O. Scott, about why he's done with the movies.

"After 23 years as a film critic, Mr. Scott discusses why he is done with the movies, and what his decision reveals about the new realities of American cinema." - The New York Times

They get into major studios leaning so hard into superhero movies and crowding out other other potential film projects as well as how streaming platforms have changed the game. Seriously worth a listen.

The budding MBA brain of mine is down to argue the economics of this nonsense with the other part of me who just wants to make weird art kid stuff no one asked for. It makes me optimistic knowing that the film Everything Everywhere All at Once did so incredibly well this year at the Oscars and will hopefully further open the door to more independent and original films.

Short-Term Investments for Freelancers & Small Businesses

If there's one thing so far that's kinda rocked my world of financial thinking as an MBA student, it's the idea of short term investments as a freelancer or small business. Investing always seemed like something you do only for retirement, but as we started learning to read and analyze business financial statements, I kept seeing a line for short term investments.

I'll say this upfront and very directly: I'm not an accountant, tax professional, or financial advisor. I learned a long time ago to work with financial professionals whose responsibility is to help me with my business and personal finances. Anything I'm sharing related to money is based on my personal experience and what I'm currently learning in the course of my MBA program. If you've followed me for any length of time you should be sick of me taking about this nonsense, but alas, here we are.

If you're self-employed and anything like me, you normally pile up some cash throughout the year to pay your known and scheduled expenses (taxes, business insurance, life insurance, etc), right?

I've been doing the full-time freelance thing since 2011 and from the beginning I've been putting aside a regular percentage of my profits from each project. When we were living in New York City, I was setting aside 30% for taxes, but we're in Oklahoma now and our taxes are much lower. Currently I'm putting aside 20% for taxes and 10% for retirement. That's worked out for me over the years and is something I'll continue to do until I have a reason to do otherwise.

Another part of my income is my stock footage licensing via Filmsupply. Those payouts fluctuate, but my monthly averages normally cover my overhead costs: salary, car payment, insurance, utilities, etc. I don't have regular expenses directly associated with those licensing fees, so I'll set aside 20% for taxes and 10% for retirement off the top, then allocate the remainder to cover my monthly overhead and stash the rest if and when there's more.

My taxes are typically paid at the end of the year and I've got a couple other major business expenses I save for and pay once a year. In the meantime, that cash being set aside to cover those expenses is just parked in a basic savings account. It's not my emergency fund, but if necessary I can use that small pile as a cash buffer when work is slow or clients are taking their dear sweet time to pay invoices. When work does pick up and I've got extra cash, I make sure to refill that fund. Remember, that cash is specifically set aside to cover those short-term (less than one year) major expenses as mentioned, but surely it could be more productive before its intended purpose months down the road (i.e., short-term investments).

Basic Savings Account

Until recently, I thought I was being smart by parking that dedicated money in a savings account. Here I am, letting the bank use my cash in exchange for the interest rate they're paying me. Well, if you're paying attention, you'll realize the bank isn't really out to make you money. They're a business too and more interested in making their own money and using your cash to do so.

According to the FDIC, as of Dec. 19, 2022, the typical savings account in the U.S. earns 0.3% interest annually. Keep in mind that 0.3% annual rate gets divided over twelve months, so it's actually 0.025% each month.

MathJax example

\[{0.3\% \, annual \,rate \over 12 \,months}= .025\% \,per \,month\] \[\] \[principal * \left( {annual \,rate \over 12 \,months} \right)^{number \,of \,periods} = earned \, interest \] \[$1,000 * \left( {0.3\% \over 12} \right)^ = \$0.25 \] \[\] \[$1,000 + \$0.25 = \$1,000.25 \]

Basically, if you park $1,000 in a savings account this month at 0.3%, next month you'll have $1,000.25. Your $1,000 earned a whopping $.25 in interest. It's not nothing, but yea it is.

High-Yield Online Savings Accounts

There are those high-yield online savings accounts and I've got freelancer buddies who swear by them for their parked cash. Right now, the best interest rate I could find in a high-yield online savings account was 4.13%. Going back to that $1,000 we'd talked about earlier, let's say you put it in one of those high-yield savings accounts this month. What does it look like next month?

MathJax example

\[$1,000 * { \left( 4.13\% \over 12 \,months \right)}^ = \$3.44\] \[\] \[$1,000 + \$3.44 = $1,003.44\]

By simply moving your money into an account with a higher interest rate, your $1,000 made enough in interest that month to buy you a decent cup of coffee. You're not getting rich by any means, but the interest you'd earn is much better than what you'd get with a regular savings account.

Short-Term Bonds

A bond is a promissory note issued by a business or a governmental unit when they want to raise additional money. Basically, a bond is a loan for an agreed upon period of time that makes additional money for the lender while the borrower is using it. Then at the end of the period, the borrower pays back the full amount they borrowed.

Bonds can get crazy complicated, but I'm intentionally trying to keep things simple. Specifically for this blog post, I'm going to stick with U.S. Treasury Bills (T-Bills), which are short-term bonds and range from four to 52-weeks. Because these U.S. Treasuries are fully backed by the U.S. government, they're considered to be nearly risk free and are one of the safest investments in the world.

These T-Bills are known as zero-coupon bonds and they're sold at a discount from their par value, meaning the actual purchase price is less than the bond's face value. Your return (profit) is the difference between the face value you get back at the end of the period (maturity) and what you actually paid to get it. For simplicity, let's assume we purchase a $1,000 zero-coupon bond at a 10% annual rate that'll mature in 52 weeks:

MathJax example

\[Purchase \,Price = {Maturity \over (1+annual \,rate)^{number \,of \,periods} } \] \[Purchase \,Price = {$1,000 \over (1+10\%)^ \] \[Purchase \,Price = \$909.09 \] \[\] \[Return = Face \,Value - Purchase \,Price \] \[Return = $1,000 - \$909.09 \] \[Return = \$90.91 \]

We're in this weird spot at the moment where the rates on these short-term T-Bills are crazy high. I could nerd out with you about the time value of money and inverted yield curves, but that's not my purpose here. Just know these nearly risk-free short-term investments are available with unusually high interest rates. As I'm writing this at the end of December 2022, the eight and 13-week T-bill rates are 4.3% compared to this time in December 2021 when those same bonds were at 0.05% and 0.06% respectively.

Let's go back to that $1,000 we'd talked about earlier. So instead of putting that money into an online savings account at 4.13%, let's say we buy an eight week T-bill at 4.3%. The math gets more complicated here and it's much easier to use a spreadsheet or financial calculator. The spreadsheet formula below allows you to calculate present value, basically the current value of that $1,000 face-value bond we're talking about.

MathJax example

\[= pv (rate, nper, pmt, fv, type) \] \[= pv \left( {4.3\% \over (52/8)}, 1, 0, -1000, 0 \right) \] \[= \$993.43 \] \[\] \[Return = Face \,Value - Purchase \,Price \] \[Return = $1,000 - \$993.43 \] \[Return = $6.57 \]

Keep in mind that $1,000 is a bit harder to get to than if it was simply in a savings account, but remember it's intentionally set aside to cover planned expenses later in the year. It's basically locked up for the length of time you committed to. Also, keep in mind the T-Bill example I gave is for an eight-week period. To make it a fair comparison with the basic savings account at 0.3% annual interest and those high-yield online savings accounts at 4.13%, you'd need to compare the interest earned over two months.

MathJax example

\[ \text{Basic Savings Account: 0.3% Annual Rate (Two Months)} \] \[ \$1,000 \times \left( \frac{0.3\%}{12} \right) = \$0.50 \] \[ \$1,000 + \$0.50 = \$1,000.50 \] \[ \text{Return} = \$0.50 \] \[ \] \[ \text{High Yield Savings Account: 4.13% Annual Rate (Two Months)} \] \[ \$1,000 \times \left( \frac{4.13\%}{12} \right) = \$6.90 \] \[ \$1,000 + \$6.90 = \$1,006.90 \] \[ \text{Return} = \$6.90 \] \[ \] \[ \text{8 Week T-Bill: 4.30% Annual Rate} \] \[ = \text{pv}\left( \frac{4.3\%}{(52/8)}, 1, 0, -1000 \right) \] \[ \$1,000 - \$993.43 = \$6.57 \] \[ \text{Return} = \$6.57 \]

What I've started doing recently is purchasing these short-term T-Bills directly from the U.S. Treasury via treasurydirect.gov. You'll have to set up an account and all that nonsense, but it's free and not that hard to do. A quick Google search can get you help in walking through the process, but I'd point you towards this Forbes article on How to Invest in Treasury Bills.

Also, I've been using $1,000 as an example, but the minimum investment for these T-Bills is $100, so I've been buying them in $100 and $200 chunks every couple weeks as the money I'm setting aside has been coming in. There's whole other conversation we could have about scheduling these short-term investments to land before your planned expenses, reinvesting after the T-Bill matures, and bond laddering, but that's not my purpose here. That said, I'm down to nerd out if you are.

The Stock Market

That nonsense is a dumpster fire at the moment. Not saying to completely stay out of the stock market, but I'm assuming you like to not lose money and have short-term plans for that money you've got stashed. Stocks are much more volatile than the boring bonds and savings accounts I'm gushing over, but historically stock market returns are much better. The S&P 500 – a basic benchmark for the U.S. stock market overall – has averaged an 11.88% yearly return since its inception. That said, the S&P 500 dropped nearly 20% in 2022.

Cryptocurrency

No. Just no. Personally I think crypto is interesting and I've got a small amount in a couple different things. Still, it's the freakin' Wild West out there and you're actually going to need that money we're talking about for your planned expenses.

So What's Your Point?

I'm over here singing the praises of these short-term bonds (T-Bills), but the high-yield savings account at 4.13% example I'm using is actually giving a better return. I'd consider each one equally safe seeing as how those savings accounts I linked to are backed by the FDIC and T-Bills are backed by the U.S. government. There's even some checking account options that'll earn you better returns, but you've got to watch out for minimum balances, ATM fees, and other expenses.

My point is to do something with that stashed short-term (less than one year) money that'll earn you more interest than just letting it sit in a 0.3% savings account. For sure too there's a conversation related to the tax obligation connected to the interest earned (capital gains), but for most people it's no higher than 15%. Paying attention to what your money is doing and the interest rates available may take a bit of leg work, but personally I think it's worth it. I'm keeping an eye on these T-Bill rates considering how high they are at the moment. That said, a high-yield savings account seems pretty low maintenance, but honestly I'd rather not deal with setting up another bank account. When you buy T-Bills, the funds are pulled and deposited directly into the bank account(s) you setup with your treasurydirect.gov account.

I'm sure I'll revisit these ideas throughout the year and I'll let you know how things shake out. By all means, if you're in a similar situation with your financial nonsense and have a tip (you can back up with legit evidence), I'm all ears.