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| Above image is © Laurence Kim Photography |
It's all about how virtually impossible it is to become wealthy, or at least a member of the upper income bracket, via a photography career. My heart sank. It takes the wind out of all my sails and for one main reason...it makes sense.
Here are a few valid points Kim makes:
Common prosperous careers have high barriers to entry. Professionals (dentists, lawyers, accountants, etc.) build wealth in a couple different ways. First, they can earn high incomes. The primary reason for the high income is that their profession may require a high level of expertise acquired at a very high cost. It takes a lot of time and money to become a lawyer. Four years of undergraduate education, three years of law school, and then you have to pass the bar exam. This is an extremely high barrier of entry.
Photography has zero barriers to entry. There is basically a zero barrier to entry to the professional photography business. No qualifications, schooling, certifications or experience are necessary. Since most people who become professional already have a camera, a computer and Photoshop (photography was their hobby), there’s a near zero investment in equipment needed.
Investments pay! The Investor is at the very top of the wealth-building food chain. Just about all of the wealthy (entertainers and athletes aside) have generated their wealth through investment. That is, through ownership of assets – either businesses or real estate. They’ve earned their wealth by (1) being willing to take big risks and (2) by using leverage. Let’s take, for example, a fairly typical real estate investor. He buys a small commercial property for $500,000. He put 20% down ($100,000) and took a $400,000 mortgage. His tenants pay enough rent to cover the operating expenses, including the mortgage. He was smart and bought in the right market. Twelve years later he sells the building for $1,000,000. His profit? He turned $100,000 into $1,000,000 – a $900,000 profit – in 12 years. Or in other words, 30 years worth of income for the average photographer made with a single deal.
Photography = zero equity-building. Unlike the owner of the dry cleaning store who can sell his business and build wealth over time, your photography business builds no equity. [remember the 70's sitcom The Jeffersons? George Jefferson became wealthy by owning a chain of dry cleaning stores]. The typical wedding/portrait shooter (Sally Smith Photography) earns zero income the day she shoots her last wedding. Nobody out there will buy Sally Smith Photography. There is nothing to buy. Her copyrighted library of 200,000 wedding/portrait images has no value, because she’s already sold the images to her only possible customer. She might be able to sell her gear for a few hundred bucks but that’s it.All of a sudden it makes sense to me. No wonder someone like Annie Leibovitz may have had money issues at some point. Even her, at the top of her game had to use her equity. Without equity or investments she may have lost a lot of her own work.
Kim wraps up with lending a hand to those of us, like myself, that don't want to give up on their DREAM!
- Re-evaluate if you want to work in photography full-time or part-time: Shoot 10 weddings a year and you can easily bring in $20,000 of extra annual income.
- Pick a spouse who works: If your family can live on your spouse’s salary, then you can save/invest nearly all of your photography income.
- Invest your profits outside of photography: Spend less than you earn. Invest your savings wisely. Set a specific savings goal for the year. Do not make a single discretionary purchase until you’ve socked away that amount into an account earmarked for investing.
- Hold on to your money:
- If your camera is less than 3 years old, there is NO NEED to upgrade your cameras
- There is no need to upgrade all of your software all the time. At most, upgrade with every 3rd release.
- Your brand is NOT your logo/letterhead. There is no reason to spend thousands of dollars on professional graphic design.
- Don’t spend your hard earned cash on magazine ads. They are a waste of money.
- You can make more with a single phone call than you can with a $2,500 magazine ad.
- Maximize your revenue. Since your time is fixed, you have to maximize the revenue from each session.
To visit Kim's original blog post go here.
2 comments:
It sure is a very interesting article, thank you for sharing this one!
I understand it can be somewhat discouraging, but at least this gives you a clear idea on how to become a wealthy photographer after all, even if that involves some investing. And let's not forget Annie Leibovitz, David LaChapelle and the like will always have a job. Once you're that famous there shouldn't be too much to worry about as far as working goes!
I agree. I guess we can hope to become someone like Annie or David.
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