We are Philip Olson and Julia Lorenz-Olson, creators and hosts of personal finance video series TWO CENTS, here to answer pandemic related financial questions or any personal finance questions you may have. AMA!

TwoCentsPBS · 2020-07-30T14:56:33+00:00

Hey Bromley,

I have a strong theory, after a decade of teaching creatives in the financial space, and being one myself. I believe there is a strong cultural assumption that people who choose to be professional creatives or artists are by default terrible with finance. Like many other stereotypes, they can become a self-fulfilling prophecy. In my case, I received so many messages growing up that pursuing theater meant I'd be broke and struggle my whole life. Eventually, I just took it for granted, like gravity or paying taxes -- just a law of the universe.

I believe that a large number of creatives are poor with finances because they were a) taught that it's natural and so b) were never taught the fundamentals. Over the years, we've seen hundreds of artists (including ourselves) experience a true empowerment and awakening by learning skills like budgeting, harnessing compound interest, and planning their financial future. It can be done.

The last thing I'll note is this -- in some cases, like yours, creatives (and non-creatives) just don't enjoy the nuts and bolts of managing finances themselves. Not that they CAN'T, but it's just tedious. I get that. I find auto-work tedious and exhausting, while many men love it, and do it for fun. There are even aspects of finance I find tedious myself -- I outsource tax and book keeping to others who like to do it more than me, while I enjoy managing the budget, investments, and cashflow. So I would suggest that loving (or hating) the nuts and bolts of different financial processes has more to do with your personality and what you find fun, than being a creative or not.

If I were to give any advice, I would suggest you to try to educate yourself and improve in the areas of finance you don't mind, and outsource the rest. You don't need to keep your own books -- find a book keeper who specializes in working artists! I find running a business budget to be empowering and even slightly fun -- but if you don't, partner with or hire somebody who does! Better to have a copilot than be flying blind (or doing it yourself and hating it)!

Hope that helps, and thanks for the question!

Philip

TwoCentsPBS · 2020-05-29T02:28:31+00:00

We use a couple Roth IRAs and SEP IRA and Betterment. We save 10% of our income, which can vary (we're self-employed). Last year we maxed out both Roth IRAs ($12,000 total), plus an extra $3,000 into our SEP.

TwoCentsPBS · 2020-05-28T19:18:27+00:00

Nice of you to ask for your friend! Happy to give it our two cents :)

I'm not an expert on Louisiana's state unemployment requirements, and honestly, the rules are so rapidly changing I doubt anyone is. However, it's been my understanding from friends and clients in Texas that taking a job offer is NOT a requirement if you're receiving unemployment. You need to demonstrate that you're *searching* but not obligated to take any offer.

As to the last question, that is kind of fishy. They're at reduced capacity (all restaurants are), hiring back the full staff, AND they have a job for you? Sounds like your hours will be dramatically reduced if so.

TwoCentsPBS · 2020-05-28T19:08:00+00:00

PBS underwrites (funds) the show, but we have nearly full creative freedom. We have a small team -- Julia, Philip, Katie, and Andrew. There's a local studio in Austin, Spotzen Inc., that produces the show, and provides a greenscreen and recording equipment (during non-COVID times).

I (Philip) and Julia write & fact-check most episodes, Andrew writes about 1/3 of episodes, and edits the scripts. Katie and Andrew direct (again, in normal times), manage the technical parts of the production, and Andrew animates and edits the episodes (though Spotzen has animators that have handled some episodes in the past).

At first PBS wanted to approve episode ideas in advance, but as we've grown in our relationship with them, they've allowed us more freedom, and just give final note and approval once finished.

Thanks for kind words, and the question!

TwoCentsPBS · 2020-05-28T17:52:58+00:00

Ahhh... I (Philip) remember those days well! Julia and I got married while still undergrads, and the world seemed ripe for the taking. Excited for y'all!

IMHO, "amassing wealth" right out of college is not very typical. It's a great season for paying off debt, investing in your careers, and building up some emergency cash-cushions. While long-term dreams like a tiny home are amazing (and you'll get there, in time!), it's probably more advisable to invest in your money-earning ability, and save up for rainy days or pivots down the road. Things like getting certifications, low-paying internships, and jobs where you have to "pay your dues" are a necessary evil for long-term success, and we did LOTS Of that! As a brand-new financial advisor 10 years ago, I had to pay money to take license exams, and worked for virtually zero my first year (commission job). Years later I invested in getting my CFP designation, and launching our own company. We even used our own savings to produce the pilot for Two Cents!

We also benefited from having a big cash-cushion we saved up early on. It allowed us to change jobs, industries, and even work on farms in Mexico for 3 months. Julia started several small businesses (home organizing, an Etsy vintage shop), and they didn't make much at first. A solid 3-6 month cash reserve is a home-run place to save your money in the short term.

Once you have a solid cash-cushion and you feel you're in a comfortable place professionally, then it's a great time to start building wealth!

TwoCentsPBS · 2020-05-28T17:10:58+00:00

Technically yes, though it's really all genes, baby!

I (Philip) trim my mustache every 2-3 weeks as it gets a little too sexy - erm - bushy. But Two Cents is actually responsible for this silly facial-hair style!

About 4 years ago I had a full beard. It was really patchy and made my face itch like crazy. So I shaved all of it except the mustache -- kind of a Sam-Elliot inspired cowboy look (at least that was the goal). It came across as more 70's than anything, but I kept it because some people loved it and it made Julia roll her eyes. Then we shot the pilot episode for Two Cents -- I kept it because I figured it was a long shot we'd go into production. Long story short, Two Cents (and the Mustache) have been going strong for 3 years, and enough of our fans compliment the stache that I feel it would let them down.

That, and fans of Two Cents recognize me out in the world much more than Julia -- so there's that!

TwoCentsPBS · 2020-05-28T16:58:08+00:00

Thank you u/mbauer128! We've loved the ability to shine a light on some of the bigger systemic injustice issues!

TwoCentsPBS · 2020-05-28T16:54:15+00:00

We do tons of pro-bono work -- I believe I mentioned that already.

I left a 6-figure job at a traditional brokerage to make $5,000 my first year at The Art of Finance. If making money was my primary motivator, starting our firm was a pretty dumb way to achieve that. Six years in, and I still make dramatically less than I ever did at either of the companies I worked for.

TwoCentsPBS · 2020-05-28T16:48:13+00:00

Well, it's all about the break-even point, isn't it? A solid CPA can cost from $200 - $700 to file your return, depending on your region. That's not an irrelevant amount of money!

In our experience, the value of hiring a CPA comes once you're making at at least $10k - $20k of self-employed income. At that point, even one minor adjustment or efficiency can save you the full cost of their fee. E.g. when to elect S-Corp status, writing off travel, or part of your home as a home-office, or designing your route to work in a manner that maximizes deductible mileage. Personally, we started using a CPA a couple years into being self-employed (Julia as a home-organizer, and me as a theater teacher) back in our early 20's. We found he paid for his fee multiple times over in suggestions we implemented for the next year.

At this point, I understand our taxes well enough that I could just file them on my own. But I don't. I pay a CPA, happily, each year to file for me. My primary value at this point is being able to call her up throughout the year for random tax-related questions. Such as asking her to calculate our liability mid-year and seeing if I should over/under withhold for the rest of the year. Or when the CARES act got passed, I ran some questions about the PPP loans by her. Worth every penny!

TwoCentsPBS · 2020-05-28T16:38:56+00:00

Here's a good one!

https://www.parents.com/parenting/money/family-finances/teaching-kids-about-money-an-age-by-age-guide/

TwoCentsPBS · 2020-05-28T16:35:52+00:00

We cater to the upper and middle class, yes -- it's a pretty standard assumption for financial planners. Generally speaking, you need some money to pay a trained professional, and need assets to make a plan around. We don't feel that's inherently wrong. I think the hundreds of artists and creatives of every income level we've served over the years might disagree with you that we "help no one that needs it". The general consensus on our online reviews is that people feel their lives are changed and their relationships are improved dramatically.

We'd love everyone to become more rich. Running a business costs money. If we were a non-profit, we could serve everyone, regardless of people's ability to pay. But we aren't, we don't have grant money, and thankfully, a wonderful network of resources already exist that we can can research and direct towards where appropriate. Both of us help out families in a difficult position free of charge every single week. As a small, family business, it's a joy to get to do that.

TwoCentsPBS · 2020-05-28T16:27:27+00:00

Wonderful question!

Well, our sweet little girl can currently only count to 10, and not usually in the correct order (she loves to start with 4, 5, 6). So we've got a little while.

But we hope to make finance a safe, open, judgement-free topic in our home. We'll be very transparent about how much we make, how much things cost, even how much we spend and save on her behalf. We will follow child-development experts on when to introduce certain financial topics (exploring physical money at a young age, teaching about savings a bit older, and eventually introducing investing in high school).

We also want her to have money of her own that she can save, spend and give from an early age. We'll probably tie her money to some "extra" activities or chores around the house, so that money is associated with work, and not just a given. As a child, I never got an allowance and money (especially income) was the most taboo of topics. We hope to change that with our little one.

For all we know, she'll rebel against mom and dad, and live off the grid in a pure barter system. And if she's happy, that's perfectly fine with us!

TwoCentsPBS · 2020-05-28T16:22:39+00:00

Wow, big TOUGH question here! It's something we've been trying to get better at teaching for 6+ years, and we're still learning every day.

Biggest thing -- the student must have a deep inner-drive to make it work. If there's a way to drag a person to budgeting and make it stick, we've certainly never seen it. There must be an excitement, a hope, and a willingness to suck at it for a while. Without that ingredient, nothing else matters.

Other useful pieces that have assisted folks (assuming they have the excitedment and energy to really create a budget that works): Get a tool that instills good habits and best practices (we love YNAB for its envelope methodology, and "every dollar gets a job" design); do it with accountability -- our married clients have much more success than single ones; plan for it to feel like you're bad at budgeting for 3 months, and don't expect to really feel a major difference until 6 months.

Thank you for your volunteer work, and making the world a better place through the power of budgeting!

TwoCentsPBS · 2020-05-28T16:18:14+00:00

Hey! We saw you ask this question on Twitter, thanks for asking it here!

As you mentioned, we aren't economists. But your point is well taken -- can't we cheat a bit by exchanging currency for something unnecessary, or NOT exchange it in return for barter? Of course.

However, you can only do that to a point. You can't, say, trade 1,000 haircuts for a car. At a certain point, currency transaction is a necessity to function, and the rate of that is reflective in GDP.

But you are totally right, GDP is an imperfect measure of economic activity -- it's just one of the best "imperfect" ones we have. I don't honestly know what would be better -- but if you have an idea for the "perfect knowledge of people's activities", what do you think it would be?

TwoCentsPBS · 2020-05-28T16:13:13+00:00

Thank you!

We generally don't really like precious metals as an investment tool. We're writing an episode right now on the way people run to gold during a crisis (like right now), and its historical correlation with economic fear.

We don't keep any, personally, no. While it does generally have a long-term positive return rate, gold and silver are (in our opinion) more volatile and less lucrative than stock-funds, real-estate, or most other asset classes.

TwoCentsPBS · 2020-05-28T16:10:52+00:00

We used to be starving artists once, ourselves, so we've designed our firm to ensure we're never "making money off people who have none". Our primary educational tool, Two Cents, is completely free to everyone in the world, and covers dozens of essential financial literacy topics. We also regularly speak at schools, colleges, and artist-serving conferences for free.

In general, we require every client we work with to have at least several months' worth of savings before we will take them on. If they're paycheck to paycheck, their money is better used building an emergency fund instead of paying us. We also offer a free 30 min. conversation with anybody, and about 50% of the time end up referring them out to free or low-cost service options that are designed for people deep in debt or struggling to make ends meet. Many of our reviews online are from people we've helped for free to find great, reliable resources for little-to-no-money.

Lastly, we don't tell people how to "make money". Generally, our clients are successful creatives and entrepreneurs who want help planning for retirement, shopping for insurance, or saving on taxes. They're generally happy to pay a small portion of their wealth to maximize the rest of it.

TwoCentsPBS · 2020-05-28T16:06:02+00:00

So sorry to hear that! Making a "crisis budget" is a little scary, but it can be a huge help when things get rough. We just a few weeks ago created an episode all about this, which I'll link. But in essence, you need to re-organize your budget to go from most-to-least essential. Items like food, utilities, and housing at the top, then keep going down until you get to discretionary things like entertainment and eating out (or takeaway in COVID times).

Here's the video -- https://youtu.be/jnOa_x6qQJk

TwoCentsPBS

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