[Dixielandjazz] Most musicians don't plan for retirement

[Steve barbone]

Not OKOM, but good advice for musicians who are making money.(most of whom
are notorious for not following good advice). For those giving the music
away, no need to read this article.

Cheers,
Steve


April 11, 2006 - NY TIMES

Rock Stars Must Plan for Day the Music Dies  - by ROBERT STRAUSS

IF Bert Padell could whisper one word into the ears of his musician clients,
it would not be "plastics," as in a famous scene from "The Graduate," but
"restaurants."

"I tell them they have to find another business," said Mr. Padell, who has
been a financial adviser and accountant to entertainers for more than 50
years. "Restaurants, well run, are a good idea for that kind of celebrity."
His Manhattan office is filled with tributes from the likes of Frank Sinatra
and dozens of gold records earned by his clients. He has set up several of
those clients with investments in such culinary gold mines as Nobu and
TriBeCa Grill.

Still, many of the artists, especially the younger ones, he said, don't
listen when he tells them to put something away for retirement.

"The music business, or any fast business, has a lot of money up front, and
slowly but surely it trickles down to nothing," said Mr. Padell, whose
clients have included Madonna, Tupac Shakur, Alicia Keys, Rakim, T-Rex, the
Kinks, Ben Vereen and Alice Cooper. The problem is, Mr. Padell said, you
can't really get a rock star excited by traditional long-term investments.

"You tell him to go into an I.R.A. and what can you put away, $15,000 a
year?" he said. "If he had five years, what would you have, $75,000? I don't
have to tell you how long that would last for a musician. What young
musician would think of something so mundane?"

Eli Nelson did. In his 20's and 30's, he was the pedal-steel guitarist for
Mickey Gilley's Urban Cowboy Band. It was touring the world at the top of
the country scene. The Pasadena, Tex., club named after Mr. Gilley was
featured in the movie "Urban Cowboy." Things were heavenly.

"I went to a C.P.A. to do my taxes, and he just told me I should put $2,000
in an I.R.A.," Mr. Nelson recalled. "I looked at a list of mutual funds and
picked something from American Capital. That was the extent of retirement
planning for country musicians." He left music and Texas more than a decade
ago for an import-export business in New Jersey and is now married with a
son. "Retirement means you are thinking about life in general in a certain
way, and most musicians don't."

An exception, however, was Duane Allen, who has been part of the Oak Ridge
Boys for nearly 40 years. "I studied economics in school, so I knew to have
a good tax accountant," Mr. Allen said. "I planned to retire at 50, but I
guess I like what I am doing at 63, so I don't have to."

Dick Richards was there at the beginning of rock 'n' roll, before I.R.A.'s
and 401(k)'s. Now 82, Mr. Richards was the original drummer for Bill Haley
and the Comets, who in 1954 recorded "Rock Around the Clock," generally
credited as the start of the rock 'n' roll era. Mr. Richards's father was an
opera singer who had worked for decades, so Mr. Richards never thought of
retirement when success came.

"The word 'retirement' was hardly in my vocabulary," said Mr. Richards, who
still does about 75 dates a year with many of the old Comets. (Mr. Haley
died in 1981.) "Someone told me that I should do one thing ‹ get my home out
of debt ‹ so I did, but that was about it.

"Now, though, I would tell anyone that the gravy train doesn't last, that
anyone who thinks it does is nuts," he added.

Another problem is that musicians do not often own the publishing rights to
their songs, said Kevon Glickman, who runs Respect Management, which
represents mostly R&B and hip-hop artists.

"Publishing is like an annuity," Mr. Glickman said. "You will then get money
every time your song gets played in some commercial or TV show."

Mr. Padell, who has long dealt with musicians making big money early on,
encourages his clients to invest in businesses that can trade off their
names or in hard collectible assets.

It might be incongruous to envision Tupac Shakur spending his later days at
a Chinese art auction, or Alice Cooper shedding his makeup to buy, as he
did, Arizona real estate. It is another thing to visit the restaurants Mr.
Padell advises his clients to invest in. Mr. Cooper, for instance, has a
restaurant, Alice Cooper's Town, in Phoenix, with menu items like "Megadeth
Meatloaf," and another in Cleveland.

"Ninety percent of musicians wouldn't do 10 percent of what you tell them,"
Mr. Padell said. "They go look at the Rolling Stones and say, 'They don't
need a retirement plan.' "