The article below originally appeared on my micro-budget weekly newsletter.
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ESCAPING THE RAT RACE…
Most working people in our society are stuck in the rat race. They desperately compete against their peers to “climb the ladder”, but somehow never seem to get ahead.
The harder they work, the further behind they fall.
This reality plagues employees and even self-employed business owners in virtually every industry. The root cause is misinformation and poor education.
People are taught from a young age that landing a well-paying, steady job will be their ticket to success. But that’s just not always true.
Even if you attend the best school and land a “dream job” at a big company afterwards, that doesn’t extract you from the rat race.
Because the rat race exists on all levels – you can be caught in it whether you’re flipping burgers for McDonald’s or an executive for a multinational corporation.
The rat race isn’t about what you have, it’s about what you don’t have. It’s about wanting more and never being satisfied.
People are taught to get a steady paying job so they can save money for the future, buy a home or take nice vacations.
This translates to the vast majority of their time being monopolized by their employers, and practically every dollar they earn immediately being spent on debt.
They want to keep up with the Joneses, so they buy a new iPhone or car or a bigger house. This puts them further in debt so they need to work harder to pay it off.
And just when they start making some headway, they’re falsely led to believe (usually by friends, colleagues, or increasingly social media) that they have plateaued, and they need more. So they go through the cycle again – another phone, another car, another house. More debt, more liabilities, more stress, less time.
This is the rat race. And 99% of people are caught in it, whether they realize it or not.
As filmmakers, we have the propensity to believe that we operate outside of this system, but we don’t. We think the rat race is for suits who are chained to their cubicles – but almost all of us are caught in it too.
The rat race isn’t about where you work or what you buy. It’s about your desire to buy your way into success, and the inevitable poor financial choices that follow.
Filmmakers are more susceptible to this than practically anyone else. Because they all have a dream, and that dream can be exploited.
We take on massive debt to attend film schools that don’t teach us anything we couldn’t learn for free by watching movies or being on set.
We hear stories of rogue filmmakers like Kevin Smith making a $27,000 credit card movie and launching his career… And we go into even more debt trying to emulate something that can never be replicated.
We’re sold the idea that our movies will somehow be better if they were shot on X, Y or Z camera. So we drain our bank accounts to pay for a tool that will never improve our skill.
We spend thousands of dollars submitting our movies to film festivals that (in some cases) literally don’t even watch the movie… But hey, if you don’t play the lottery you can’t win!
These are just a few of the countless ways filmmakers are exploited every day to spend their money in hopes of achieving their dreams.
It’s no different than a corporate employee going into unreasonable debt to buy a McMansion. That’s their dream. Our dream is to make movies and hit it big. Both can be easily exploited.
Adobe does this quite effectively with their subscription model. For just $50 a month, you can own an entire suite of creative software – everything you need to make your movie!
It feels like such a good deal until 5 years in when you’ve spent $3000 and realize you’re now dependent on the software.
There is a reason Adobe doesn’t want you to buy their software outright. They want you to be indebted to them – it’s just good business.
The same goes for the camera companies who release a new model every six months or the film festivals who email market to you year after year…
They want your money, and have devised business systems that will allow them to profit from you on a continual basis.
Filmmakers in turn, end up going into debt for things that won’t actually help them achieve their goals. Then, they need to work harder on projects they don’t want to be working on, or take a corporate day job to pay down the debt that they’ve been sold. This takes them further away from their creative work, and in turn makes them less likely to succeed as filmmakers.
I don’t want to sound too bleak though, as I truly believe any filmmaker can escape this rat race. The first step is simply recognizing that it exists.
The second step is to understand the fundamentals of business and cash flow, and look for ways to operate as owners, not as consumers.
By reconfiguring how you earn your income (and just as importantly how you spend it), it’s entirely possible to create a system that will lead to financial and creative freedom. A system that – in time – will help you earn more income without needing to trade your time for money, and provide a true foundation for even your biggest goals as a filmmaker.
Because only when you are free from the “time for money trap” can you have full autonomy over your creative endeavors. So long as your time is being monopolized by unrelated priorities, your film work will inevitably take a back seat.
It doesn’t matter how talented you may be, without the ability (time) to focus intensely and work hard consistently, you can never reach your full potential.
Unfortunately, most of us spend the vast majority of our time working on something outside of our own film projects. We’re taking on day jobs or freelance gigs, running our production companies or working outside the business entirely. Not because we want to, but because we have to.
Paradoxically, the more successful we become in any of these other areas, the less time we have available to dedicate to our filmmaking efforts.
Because with every pay bump or promotion or new client comes a whole host of new responsibilities that leaves us with less precious time than before.
This in turn diminishes our chances of developing our skills, networks, and body of work. And without that ability, it can be nearly impossible to succeed.
But that doesn’t have to be the case.
If we can identify and address the core issue that sends us down this path, we can easily change our course.
So what exactly is that core issue? Put simply:
The problem is HOW we choose to earn our income.
I’m not talking about WHAT we do to earn our money – as in which industry or position we may hold – but literally HOW we earn it.
Well over 90% of us (and I believe that’s a very conservative estimate) earn the majority of our income as employees. This is true even if you are a freelancer or own your own production company…
As a freelancer you may not be a full time employee, but you are still trading your time for money, and your schedule and income is at the mercy of someone else.
Even as a small business owner, you may very well be an employee of your own company. While you may have more autonomy than a freelancer, you may also be inextricably linked to your business – Its success may be entirely dependent on your personal time.
Which brings us to the solution… The HOW in the equation that can allow us to have more free time with each passing year, not less. And more ability to spend that time becoming better and better filmmakers, making more movies, and ultimately finding creative freedom.
And the principle is the same no matter your age or job title –
Your income can not be derived exclusively by trading your skills (and time) for a paycheck. It must be generated by assets.
Assets are simply things that you own that generate money for you while you sleep.
Under the right circumstances, almost anything could be an asset – a business you own, a camera, a film you’ve made, a piece of real estate. But equally, each of these items could be liabilities. Because again it’s not about the WHAT it’s about the HOW.
As I alluded to above, if you own a production company but are also the primary owner/operator of that business, the business is not truly an asset. Until you can personally walk away from the business and still have it generate revenue for you, it is a job like any other.
The same goes for a movie you’ve directed. If you don’t own the movie, it’s not your asset – it’s someone else’s. Even if you do own the movie, if you haven’t created a system where the movie can continually generate passive revenue for you over time, it doesn’t meet the criteria.
In order for something you own to function as an asset and generate passive revenue for you, it needs to be systematic. Getting there is not easy, but it’s completely do-able if you put your mind to it.
So where do you start?
The good news is, achieving true autonomy as a filmmaker is as simple as opening your mind to a different way of earning your living. You don’t need to make a seismic shift tomorrow, but you do need to understand the value of assets so that you can create the right opportunities for yourself over time.
You also need to need to understand how spending habits and cash flow factor into this.
The definition of wealth isn’t how much money you have. It’s how long you can sustain your current lifestyle without having to work for money.
If your monthly expenses are $2000 and you are generating $3000 a month with passive income – you are wealthy. Much wealthier than someone earning $20,000 a month with an overhead of $25,000.
It’s not the dollar amount that matters, it’s the ability to cover your ongoing expenses without having to work for it.
This is what most of us are striving for. Not because we don’t want to work, but because we want to be free of the unfulfilling “time for money” tasks that take us away from what matters most – our creative efforts.
So not only do we need to generate more money passively, but we also need to reduce unnecessary expenses so that we require less monthly cashflow.
As long as you understand this basic principle, you will be on your way to opening up so much valuable creative time in your schedule. And it can start really small –
Ask yourself if there’s something you’re currently spending too much time on month after month, simply because it helps you pay the bills.
Let’s say this thing is an ongoing freelance gig that pays you roughly $1000 a month, but takes up way too much time week after week. Imagine how different things would be if you could just eliminate that one commitment?
That’s how it starts. You don’t need to make a drastic change overnight, you just need to start chipping away at it.
Over time, you could be generating all of your income through passive assets and investments, rather than by working to make someone else rich. But just start small, and build it up from there.
This applies to current full time employees too. You don’t need to quit your job tomorrow, but you should consider building assets that allow you to supplement your income, and give you the freedom in time to only work for your employer because you choose to. Not because you have to.
As far as specific methods for building assets, the options are truly unlimited. The most lucrative assets are often financial or real estate investments, but in those cases you need money up front to start turning a profit.
For many of you, your best option will be to create an asset now that costs you little up front, but has the potential to generate long term passive revenue.
In fact, it might cost you nothing at all… For instance –
If you already own a cinema camera, you can sub rent it through a local rental house.
If you have made a feature film, you can create an automated system to market and sell it to an audience.
If you have a big folder of unused b-roll footage on your hard drive, you can license it on stock footage websites.
If you own a production company, you can better train your staff to remove yourself from time consuming tasks.
This is just the tip of the iceberg. Most of us have so much ability to create derivatives from assets that are right under our noses. We just need to make the decision to put them to work.
Better yet, we can create assets out of thin air.
Under the right circumstances, a no-budget feature film could generate thousands of dollars a month in passive revenue… That is an incredible asset you can start making now (for virtually nothing) and that can theoretically generate revenue for the rest of your life.
And that’s just one example of course…
Virtually any skill you have (that you may currently be trading for money), can be converted into an asset.
If you have a background in visual effects, you could create templates for After Effects or Motion and sell them online.
If you have a background in sound design, you could make your unique sounds available to license by other filmmakers.
If you have a background in cinematography, you could produce educational videos about filmmaking, and share them with the community.
The options are literally endless.
All you need to do is start with one asset – something that costs you little or nothing to create, and that you can sell or license without a substantial amount of your own involvement.
Before you know it, that asset will be paying some of your bills and you’ll likely be inspired to create another, and another. Depending on how far you take it, eventually you may build an entire business (or two) that is completely self sufficient.
Part of a successful asset building strategy is to diversify. In the long run, you might have 5, 10 even 20 or more revenue streams pouring in from different assets. That way, if some aren’t performing as well as you’d like, the remaining assets still have you covered.
The catch though, is that your assets – whatever they may be – have to truly be unique and valuable. Imagine owning an apartment that was falling apart – it’s not much of an asset if no one wants to rent it from you.
This is why whenever I’ve created assets myself, I’ve taken a tremendous amount of time to ensure I gave them 110%.
My first attempt at this was creating my color correction LUTs, which have now moved over to the CINECOLOR website. While these do provide passive revenue for me monthly, it is only sustainable because I poured my blood, sweat and tears into the product up front. I literally spent months and months on end trying to perfect the LUTs, so they would truly provide value to other filmmakers.
Same goes for my Color Grading Masterclass and Micro-Budget Feature Filmmaking Masterclass. I would never create or release a product that I wouldn’t be entirely willing to pay for myself. And the success that I’ve had with these courses is a result of giving it my all – there were never any shortcuts.
Generating assets of any time takes a lot of work and time up front. I don’t want to sugarcoat that at all. But the benefits more than justify the initial effort.
There isn’t a one-size-fits all formula for any of this.
Each one of us will approach things slightly differently, based on our skills and abilities and tolerance for risk. If nothing else though, I hope this has opened some of your eyes to the idea of building a more sustainable revenue system for yourselves.
In the future, I plan to release some bonus content and (possibly) a course all about generating passive revenue online. It’s derived from my experiences using content marketing to generate revenue with my feature films, my website, color products, and educational videos.
If this is something you’d like to learn more about in the future, please leave a comment and let me know!
The article above was originally published on my micro-budget weekly newsletter, where I share exclusive content to inspire and educate filmmakers & creative pros. For more articles like this every Sunday, be sure to sign up for the newsletter here, or use the form below.