How To Manage Your Money as a Freelancer, Chat With Joshua Mills

Yasi: Hi, Joshua. Welcome to your Fasttrack podcast.

Joshua: Hello. Thanks for having me.

Yasi: I’m very interested in hearing about your personal story because you are a professional musician and then you have an account on YouTube and Twitter talking about personal finance. And I want to understand how did you discover your passion for personal finance?

Because those two topics are usually not going together.

Joshua: No, I see where you get the point. They normally don’t go together. Ever since my childhood, I always had an interest in finances, for sure. I don’t know where it came from. I don’t know whether it’s my family, but I always had this passion or curiosity about finances.

And in fact, this sums it up quite well. I’ll show you to the camera, but the listeners will be able to hear. I found this little poster in my apartment and it’s from my childhood, from 2003 and it says ‘14-year-old schoolboy is available to sing solo at weddings, christenings, and small family celebrations, competitive rates.

And. Yeah, that’s me. That’s me. And I, we made this little poster. I went around all the churches in my town and I posted it through there, hoping that I could make a, you know, some side hustle income through singing. So, I always had wacky ideas like that. A passion for business or a passion for making money. And you are right, the artistic world is a little bit different.

There’s much more of a focus on being artistic and being creative and not so much on the making money side. And I can understand it. That led to two ends of the spectrum. But how I discovered the fire of personal finance!? It was through twofold. So, first of all, I was meeting with the financial advisor. So, the financial advisor those years ago introduced me to investing.

And he said, ‘You’re keeping your money in cash. It’s not going to grow’. So, I started investing through this financial advisor and then I started to passively learn more about investing. And the second thing was meeting another opera singer and she introduced me to this book and it’s called The money book for freelancers, part-timers and the self-employed. Her name is Rhiannon Llewellyn, it is a very sounding Welsh name. She runs a page called The Vicar’s Wife’s Frugal Life, where she talks about being frugal, managing her money as a musician as well. We met up and started talking about money. I was obviously very excited.

She said, ‘Have you ever heard of FIRE’? No, I have never heard of that. And that’s where it began about two years ago for me, where I discovered the movement All about money.

Yasi: Ah, interesting. I particularly like this flyer story of a little boy, and I like that you wrote competitive pricing.

Joshua: Competitive rates.

Yasi: And you work as an opera singer. Is it a fixed contract or it’s more like a freelance job, payment based on performance?

Joshua: It depends where you live. In the UK, there are very few fixed contract positions. There used to be quite a lot. But in the UK these days, the only fixed-term contracts for singers are choristers.

So, if you’re a part of an opera company and you’re a chorister with Welsh National Opera or The Royal Opera House, those are the only two opera houses. Now, if you live in Germany, it’s different. There are lots more fixed positions. I worked in one myself. I lived in Germany for three years and I was always employed there.

I was employed by the theater and you go in every day, that’s one place of work. I’d say, the majority of singers tend to be freelancers. Certainly, the ones in the UK.

Yasi: If you work as a freelancer, how do you manage your cashflow? Do you have a budget or do you have a saving plan, since it’s not a fixed income every single month?

Joshua: This is what this book, the money book deals with this question very well. And this was a real pinnacle point for me of understanding. Going back to my childhood, I’ve always saved and I was an instinctive saver. So, whether I had the conversation with the financial advisor, I had a lot of money in cash. I didn’t need a technique to save money, I did it instinctively. But once reading this book, made me realize how inefficient the plan was. I was saving passively, which was great, but it’s much better to have a plan. So, one of the difficulties about being a singer is to have big chunks of money coming in but in single time. You might have one chunk of money and that needs to last you three or four months. So, you need to be very wise about how you use that money. The thing I do immediately when receiving a fee is I have it in my mind. if a concept fee is 3000 euros, in my mind that’s about one and a half thousand.

And it’s normally right. If I knock 50% off, that’s normally what I net. So, it’s quite dangerous to think when you get an offer for a job, I always have it cause it’s dangerous to think, Oh, that looks so much money. But there are lots of deductions. First is the agency fee. Agency fee can be anywhere from 5% to 15% for finding the concert.

Then you’ve got taxation, local taxation, you’ve got travel, accommodation. All of those things come off your inclusive fee. So, there are all of these hidden costs. And I had this experience just last week. I actually had a concept that hasn’t happened for a long time. It was a live recording with the BBC orchestra and it was an inclusive fee.

So, I got a fee, but then the travel deducted, hotel, the petrol, all of that comes at your own cost and you have to be disciplined because otherwise, you can quite easily spend all of your fees on different things.

Yasi: And do you pay the tax at the end of the year?

Joshua: Yeah, taxes are difficult. Well, particularly for someone that moves around in different countries, I really haven’t figured this out yet, so if you want to pay for it. An accountant that really understands international taxation, you can do that. But you could spend hundreds of thousands of pounds on, these things. I have an accountant I have worked with for the last two years. It was quite a high fee that I was paying and I wasn’t getting to the solutions. So, I saw I was going the extra mile by paying someone that knew about international taxation, but I wasn’t getting the results that I necessarily wanted. And it’s hard to deal with because there’s no right or wrong answer.

Yeah. So I’m going to have a bit of a thing for the next tax year and try and find a new accountant. But international taxation is difficult, to deal with, it could always catch you by surprise. It’s a real pro for being strict about the budget. So, I pay my taxes in the UK now, but I still work a lot in Germany.

And when I work in Germany and get taxed there, I get a net fee, which doesn’t happen in the UK. In the UK you always get a gross fee. when I got. The fee from Germany. I got, okay, well it’s already been taxed — great, I don’t have to worry about that. But for some reason, for my UK tax bill, they said we can’t offset all of the taxations that you’ve paid in Germany.

So you’re going to have to pay some more tax in the UK as well. And I haven’t prepared for that. So that then had to come out of another pot. The lesson with tax, in particular, is you could never put away enough. So, if I’m putting away percentages, I’ll never put away basic 20%, I’ll go 25 or 30 even, and then always have enough. Just in case.

Yasi: It’s a very great point because as a freelancer, especially if you have international projects, even if within the EU, you still need to pay attention to save some money aside in case you need to pay more tax, not looking at the big lump sum you received from the project and the go shopping.

Joshua: Yeah. And you can always be caught out with various charges and then there are always little surprises that can surprise you. So, the lesson really is to be prepared. Always save a little bit more than you need to. I remember when I was first working with an agent. It varies from agent to agent, but they have the commission, which was 15%, I think.

But then it’s a VAT registered company. So, then they put 20% on top of the commission as well, which I didn’t budget for. It’s only 50 pounds more or something, but I have to find that from somewhere else. So, I always now save more than I expect.

It works out quite well that way.

Yasi: It’s a great tip to all the freelancers out there. Just save more. And the next question from my side is, when you mentioned how you discovered The FIRE movement, what is it about the FIRE that fascinates you?

Joshua: No, I’m not much of a mathematician at all. I was terrible at math in school, but the thing that fascinates me about FIRE is the numbers.

Seeing that compound interest calculator, for me, that was the most exciting thing to know that the work that I’ve already done, as long as I can keep that money invested in the market and the market does what it has in previous years, it’s just going to look after itself and then could possibly go into the millions over the long-term.

That’s amazing. That absolutely blows my mind. So that’s the thing that most convinces me about FIRE. It’s inspiring. I get the privilege of speaking to people on my own podcast as well, The art of money saving, and just ask people what’s their journey of FIRE. The one thing that I do here, what’s quite common in the corporate world is that people don’t like their job very much, which I can’t relate to at all. I went back to work last week and I thought, Oh, my gosh, I missed this so much. For me, I think I have somewhat of a unique take on fire, but I don’t want to retire early particularly.

Yasi: You can finally sing again.

Joshua: I can finally sing again. I love the idea of financial independence as well. I really like that idea. That’s very exciting to me. And I think when I look back at this year that this happened, I don’t know if you’ve ever heard the terms of mini retirements.

Yasi: Yes.

Joshua: So, for me, when I look back, from March 2020 to March 2021, I view it as a forced mini-retirement. So, I would have never chosen to take that time off myself. But considering the things that I’ve done this year, I’ve kind of been in retirement. I’ve started my own little projects, side hustles, passion projects. And that’s something I’m definitely going to continue In the future, but at the same time, the question at the back of my mind is when is the art world’s going to come back. Because it’s been hit very hard by the Coronavirus. And it’s going to be a slow, slow approach coming back to earning the income that I did before.

Yasi: And I love that you started your side hustles, your podcast, your YouTube channel. I would never even imagine when I saw your YouTube videos that you are a musician, not someone related to doing videos, marketing, or presenting yourself in front of the camera. Maybe you are used to be on the stage, but still. It’s great.

Joshua: Yeah. I mean, it’s a different skill, that’s for sure. And talking about money is a different thing for sure. But I think that’s a good thing about being particularly a singer is that you have lots of transferable skills, so you know how to be a freelancer, negotiate, network with people, be friendly or all of these different qualities.

And I think that can work so well when you’re creating your own podcasts or a YouTube channel, whatever it is. It’s been a year of ideas, throwing mud at the wall and see what sticks. And not everything has worked.

Yasi: As long as one or a few of them worked.

Joshua: Yeah. The podcast is my favorite. I love the podcast because I get to speak to like-minded people. YouTube is more a tough nut to crack because it’s more of a solitary pursuit. You have your idea and it’s just you and the camera. That’s a bit more difficult I find. Maybe one day I will get to a point where it’s monetized, but at the moment it’s a passion that’s keeping me going,

Yasi: You mentioned that you started this FIRE journey two years ago. How was it like before? What are your money habits? How did you deal with savings? How is it different?

Joshua: That was pre-meeting the financial advisor and my money habits weren’t that bad. Now I did have lifestyle creep. So, the transition from going from university to having your first job, I was like, Oh, hey, I will have money. This is amazing. But I was single, so I was still always living below my means.

And I was fortunate that when I left university, I had quite a good start and a salary. And that helped me live below my means. But when I think back, I think, Oh, man, I could have saved a lot more than I did. One of the biggest problems that I had before meeting the financial advisor was, I just didn’t invest at all.

I didn’t know anything about it. Most of my money was kept in cash or cash ISAs. They were very, very low-interest rates and they didn’t save it to a pension either. So, I wasn’t doing too well with my financial plan back then, but I had a lot of cash in the bank. That was good.

But as we all inflation is a silent, deadly killer. And if I stuck with that philosophy, it wouldn’t have got me very far.

Yasi: But I’m very surprised that, when you graduated from university, got a well-paid job and you still manage to save so much cash, even though you haven’t invested the way you wanted, but you didn’t spend that much. You had a lot of cash.

Joshua: Honestly, sometimes I scratch my head and I wonder how I did it. It’s a mix of things. It really was. I was in the arts. People who appreciate music, appreciate opera were very generous. So, during my studies, I had a lot of generosity from people that funded my studies as well.

I do have student loans, but not to the extent which, perhaps some of the folks, particularly in the US have. And I was also a competitor. I used to compete in high-level competitions. And I had success in those competitions, which had cash prices as well. So maybe that contributed somewhat as well. Going back to the poster, I was a businessman as well. That was always at the back of my mind and that doesn’t come easily to all musicians. When you have to negotiate your fee, people feel very uncomfortable talking about the money or is it too much? Is it too little? I didn’t struggle with that so much. In fact, I have a funny story, should I share this story?

Yasi: Okay. Then share it, since you already mentioned it.

Joshua: There was one concert I was doing. It was called an oratorial. And oratorial is a piece that’s normally forcing us and an orchestra and choir, but no staging, just a normal concert. And the four singers, tt doesn’t matter whether you do more or less than the other singer, you all get the same fee generally.

I got asked to do this, it’s a concert. And the man said 500 pounds as So I said, well, you know, I’m traveling from London and doing this. Would 600 pounds be okay, because I got traveled on the train and he said, ‘No problem at all.’

And then, when it came to being paid on the day of the concert; with these types of choirs, they have a treasurer. And the treasurer had envelopes in her hand and she handed one to each of the singers. And when it came to me, I think I was the last one to be paid. And she said, Oh, I don’t know why yours is more than everyone else, but there you go.

Yasi: Because you asked.

Joshua: Yeah, because everyone else is getting 500 pounds, but I asked and that’s why I was paid a little bit more. Now there’s a question. Did I deserve to be paid more? Maybe not, probably not, but I did ask, and asking got me somewhere and then the fruits of the labor were there and that extra a hundred pounds.

Yasi: Yeah. Get back to your story. I think you are deserved to be paid more. How much value you’re bringing to this performance is actually determined by the person that is paying you and how much he’s willing to pay you. And then you agree on the price, which is 600 pounds and then that is your worth.

Everybody else was paid 500, but that does not mean they are worth 500. They could be worth 600, but they didn’t ask.

Joshua: Valuing yourself is very, very important. Also in the artistic realm, we have to realize one thing, and it is a very big distinction to make. I coach people in the corporate world, I also do public speaking coaching, stuff like that.

I start to realize this is one big fundamental difference, and this is the difference in the FIRE community as well. In the corporate world, people are often talking about maximizing their income, making as much money as they possibly can. And in the artistic realm, it’s not like that, money is not our number one priority.

We’re looking for artistic integrity, artistic experiences. So, if we can have a career where we are artistically satisfied and we’re happy, but paid a little bit less, we’re fine with that. That’s quite a big distinction. I’m caught in between these two worlds sometimes. I have to really remind myself sometimes. I’m in-between, and that has its difficulties

Yasi: Interesting, because I have this business background. And when I look into this case, why cannot you have both? You can have your artistic career fulfillment and at the same time, you can be paid where you think ‘I’m happy about it. You don’t have to make a sacrifice; your market rate is determined by if there’s someone or an organization out there that is willing to pay for it.

If they’re willing to pay for it, then test your market rate. There’s no one to dictate that you cannot be paid more. Right?

Joshua: That’s right. One of the strangest things about the opera industry and the classical music industry, in general, is that it’s loss-making. If you think about an opera, I don’t know if you’ve ever been to an opera, but you’ve got the chorus, you’ve got the orchestra, you’ve got the singers, you’ve got the set, you’ve got the costumes, you’ve got the makeup, you’ve got the theater. It’s very expensive, hundreds of pounds, thousands of pounds. And even if you get a berm on every single seat, you’re still at loss. There are very few circumstances where opera makes money and that makes it quite difficult as a career path. Theaters or concert promoters are always reliant on the generosity of people that love this music. That’s very different from people that in a business where it’s all about turning a profit and that’s something I still haven’t got my head quite around this whole idea yet.

Yasi: I didn’t even know it’s like a loss-making activity.

Joshua: Nine times out of 10. Of course, there are some concert promoters that do make a profit, but mostly it’s a loss-making.

Yasi: Okay. And now you are not hoarding cash, I assume. So, what is your investment philosophy? How to invest?

Joshua: I began with the financial advisor.

And quite recently, I must say around a year ago, I changed my mentality. I think it’s important to outline this. Financial advisors have their place in the world and they are important. My financial advisor taught me and helped me set up an income protection insurance policy, very important in my career because if I’m to lose my voice and can never work again, that’s going to be a big problem.

But the fees of the financial advisor were niggling at me and they were expensive. And I got to a point where I thought that I know enough now and I’m not going to be picking all of the best funds in the world. I can put it in a tracker and that’s absolutely fine for where I’m at in my life at the moment.

And that’s what I did. You know, I went to Vanguards. I found a global tracker that I was happy with. And the money grows. It’s exciting when you build up a portfolio and you start to see the swings. So, a percent up or down can be quite a large swing. And that’s very exciting because it encourages you to stick with that mentality.

And the JL Collins books that sum up my investing mentality very, very well. It’s simple. Some would say it’s boring, but I find it good.

Yasi: Boring is good.

Joshua: That’s right. Yeah. I think boring is good.

Yasi: That’s what works.

Joshua: it’s a long-term plan. I’m not quite clued up on how I feel about this yet. So, with my portfolio. it’s invested, and I leave money there for 20, 30 years. It’ll do its job and I’ll be able to retire comfortably. Job done. I could also add money to the investments as well, and I would get there much faster. I’m caught in between.

And not someone that’s in the corporate job and is adding hundreds and thousands a year. But sometimes I have to remind myself, Joshua, you should really keep adding regularly to your portfolio. And that’s been exposed during the coronavirus here because the income has gone right down because of the nature of the work.

So that’s one of the difficulties for the moment is finding out how is that going to look for the long-term. My biggest priority for the next year, next two years is making sure that I’m earning enough so that I never touch that money. It stays in the market and it just does its job.

And then as the job situation perks up a little bit, I think that

Yasi: So that’s the advantage when you start investing when you are young and then you save and then you have a lot of cash or money put into the investment. And even if you don’t add more money, 20, 30 years later, it’s going to be much bigger.

So that’s the power of starting young.

Joshua: Absolutely! Who knows what’s going to happen? I can calculate the 7% or 8% to all of these variations. I don’t know what’s going to happen. So that’s also the back of my mind as well. You don’t know what the market’s going to do.

So I shouldn’t be putting all of my eggs in one basket or relying on that money to return X amount. So I’m a bit guilty of that, but what’s great about the ETFs is you just put them in there and you’ve just forgotten about it. And it’s the money has been away for four or five years now and I just let it do its job.

And if the market grows, then I could be hit in the millions and that would be great.

Yasi: But I talked to another podcast guest and he talked about studying history. And if someone is just investing S&P 500, for example, one of the index funds in the last 100 years, you do see returns of 7%, 8% per year.

You don’t know what’s going to happen in the future. Even though you should not mirror the historical performance to the future, but somehow, it’s diversified enough and it’s low enough that people see the results.

Joshua: Yeah. That’s very encouraging. As I said, I think maybe my situation’s a little bit stranger.

I imagine that more people come to investing, wanting to grow their wealth, whereas I had cash. And I was like, well, how can I best use that? It was a bit foolish from my side, perhaps, but typing in those numbers is very convincing. Then you want to be part of this, I want to make my money work for me as best as it can.

Yasi: Yep. And do you have a financial goal?

Joshua: I don’t have a fire number or anything like that. For me, having a sense of freedom is very important. Whatever that would mean financially, I think it’s difficult to put a number or a date on these things, particularly as a freelancer.

For me, it’s about a state of mind and a type of lifestyle and also being able to live in the way that you want to. And also, I’m getting more and more convinced that generosity is going to be a bigger part of my financial plan than I ever expected. And that’s quite exciting, a challenge that doesn’t come very naturally to me.

So, my previous mentality was when I have X amount in the bank or X amount in my investments, then I can be generous or I could give to charity, or I get, start this venture. Now I’m starting to think, well, actually, If I want to do that kind of stuff now, I think you need to begin now because adding a couple of zeros on the end of my bank account is not going to make it easier to be generous.

My fiancé who I’m marrying in two months is very generous and her behavior has rubbed off on me quite a lot in a good way. And likewise, I’ve taught her a lot about how to manage money and she started investing for the first time, which is something she’s never done before.

We’re learning a lot from each other and that’s quite exciting.

Yasi: And I hear in your podcast and your YouTube videos that you talk a lot about personal finance and sharing very valuable tips with your audience and your followers. Share some with my audience, what are some personal money-saving tips that you think everybody should know?

Joshua: It’s a good question. I try to speak from experience. I’m a creative person. I always try to think about what a creative struggle with or how could they improve their money management? I hate the word budget. I hate the word budget and I don’t budget, but using percentages has been amazing for me.

And that’s something I passed on to my fiancée. So, when that bit of income comes in, I know that 25% is going straight into the tax pot. And I don’t even think about it. And I’ve loved playing with those percentages and really finding it, how much do I need for rent or how much do I need for generosity or whatever it is.

And you can really be playful with those. And that’s been a game-changer for me. So, I would always encourage listeners to go back to the budget and alter the percentages and find really optimized, because what’s great about the percentages as well — if you get that raise in salary, percentages stay the same.

You’re putting more into your investments or into your pension, even though your salary is increasing. So, I love that about percentages. It takes away the numbers. Cause we think a lot about the numbers. So that’s been a huge encouragement for me. Well, I like to talk, but the day-to-day financial things as well.

Cause I think that’s fun. The way we interact with money. One thing that I was very guilty of is spending too much on the cafes and stuff. And that was in the period where I went from university to work and I was like, Oh, I’ve got loads of money now, great. Well, I was being very unwise with the way I was using it.

And if I had a spare 20 minutes, I’d be going to the cafe and just getting a cup of tea so I could sit down and just kill time. There’s nothing wrong with going to a cafe and enjoying a cup of coffee at all. I think it’s wrong to say you shouldn’t go to the cafe and you need to be frugal. No, but you do need to be mindful of your habits.

And I was not being mindful and I wasted hundreds of pounds, thousands of pounds on those needless coffees and teas. I didn’t really need them. So that’s a regret.

Yasi: It’s about conscious spending.

Joshua: Yeah. Be intentional and take a step back, analyze your goals and surround yourself as well with people that are gonna inspire you to find that balance.

And it’s important as well, to have lots of different advices in your personal finance life. If you find that someone’s being a bit too fundamentalist, or you’re like, Hmm, that’s good, but that’s a bit hard-line, find someone to counterbalance it. So have different types of opinions and it gives you a really well-rounded approach.

But also, know when to switch off and to say, no, I know my strategy. This is what I’m doing, and I’m not gonna listen to all of this noise, cause there’s a lot of noise in the finance world. Bitcoin this, Tesla that, and it’s easy to get sidetracked. That’s why I love that book from JL Collins because it’s so simple.

Yasi: Is it The Simple Path to Wealth?

Joshua: I really like everything that JL Collins has to say because he puts it so well and it just encourages me to be boring. That’s absolutely fine. You don’t need to chase the next great stock. And I’m perfectly content with that.

Yasi: In your podcasts and YouTube, you talk a lot about how to manage money and also different kinds of tips and tricks. Where can our audience find you? Maybe you can share with them your YouTube channel, your Twitter, your podcast name.

Joshua: So, my channel is called The art of money-saving. You can find me pretty much everywhere under that name: on Instagram, @theartofmoneysaving; YouTube — The art of money saving.

The best place to go really is www.theartofmoneysaving.com. There you can find all the social media. I’ve also got a section of freebies, so referral codes and things where you can get 20% off. And no one’s ever taken me up on that offer yet. I’ve just put it on the website.

I thought some of it is the UK exclusive, but not all of it. Feel free to check that out as well. And yeah, I’m just trying my best to make sure that I can make a difference and speak to people wherever they are. And it’s been an interesting year. I’ve been almost doing this money thing almost for a year now.

So, I can’t believe that time has flown.

Yasi: Time flies. And I particularly like how you can inspire other freelancers to manage their money better because it’s really different from when you have a fixed job versus having a project-based income. So, you have to be smart about your money.

Joshua: You have to have much bigger emergency funds that are for sure.

I think Corona has been a great example of this. And I’m even thinking now, like a year minimum emergency funds, which might be a bit daunting for folks, but it’s a very different life than the standard income coming in. And you can never underestimate that. It’s very liberating when you’re out on your own and you’re just living that self-employed dream.

But the highs can be high and the lows can be very low.

Yasi: Okay. Thank you very much for coming here today. I’m so glad to have you on my podcast as I was on your podcast and I hope more and more people can learn about money skills and be smarter at it. And essentially, it’s a very important life skill that we don’t learn in school.

Joshua: Absolutely. It’s been a pleasure talking to you. And if listeners are intrigued and they can come and listen to when I got the chance to interview you on my podcast, that was a very interesting episode.

Yasi: All right. Thank you. And have a nice day.

Joshua: Thank you. Bye.