How Robo-Advisors Can Help Music School Graduates Succeed

First, start keeping a budget

If you have recently graduated from music school and are having a hard time making ends meet, do not be surprised—you are hardly alone in that respect.  It is notoriously difficult to make a living as a musician.  Berklee reports that the starting base salary for an orchestral musician runs anywhere from $28,000-$143,000.  Needless to say, a lot of musicians are earning at the lower end of that bracket—and many musicians cannot find full-time employment at all.  Long-term unemployment is common.

If that is your situation, you may wonder how you will ever be able to save money for retirement.  Even if you eventually do start pulling in a high salary, you may be getting a late start at saving up a nest egg.  Plus, there is a good chance you will always be struggling just to pay your monthly bills.

Even so, that is a challenge these days for workers in all professions—not just musicianship.  Millennials in particular are having a very hard time saving for retirement—if they can save at all.

This is why there are now new investment products aimed specifically at consumers who have very little time and money to invest, but who still want to give themselves a shot a building p a retirement fund.  One of those products is known as a “robo-advisor.”

What Is a Robo-Advisor?

A robo-advisor is a software program which is designed to replace the role of a traditional human financial advisor.  So instead of getting advice on your investments from a human being, you just open an account, upload information about your financial situation and goals, and receive automated advice personalized to your needs.  You can then make investments directly through the same platform with a few simple clicks.

How a Robo-Advisor Can Help Struggling Musicians to Save for Retirement

Why use one of the top robo-advisors instead of going a more traditional route for your retirement investments?

  • Start investing even if you do not have a lot of money.  A lot of musicians have very small savings accounts—if they have anything saved at all.  But even if all you have is $100 to invest, you can do it through a robo-advisor.  By contrast, the entry barriers at traditional investment houses might be insurmountable.
  • Cut back on fees.  It is not cheap to talk to a human financial advisor—much less have one manage your portfolios for you.  Nonetheless, most people do not have time to learn how to manage their investments manually.  You want to focus on becoming a great musician, not starting a career in investing.  A robo-advisor offers you a third path—one where you can take a hands-off approach without paying the high fees commanded by traditional financial advisors.
  • With a robo-advisor, you can check up on your accounts anytime.  You do not need to call anyone or visit an office; you just log on using your desktop, laptop, or mobile device.  You can see how your investments are doing or make changes any time of the day or night.
  • If you need to ask a human expert a question about your finances, you may be able to do so—without paying an arm and a leg.  Many of these companies have advisors you can speak to over the phone.
  • The advice that you get is tailored to your situation, and if you need to revisit your investments later to diversify, the program will take care of it for you.  So you do not need to do the hard work of researching and rebalancing your portfolio yourself.

With so many different robo-advisors out there, how do you figure out which one to go with?  You should stick with companies which are well-established and which have strong reputations, and you should search for features which are a fit for your needs.  Two of the top choices right now are Betterment and Wealthfront.  Before you can figure out which one is right for you, you need to compare Wealthfront vs. Betterment by reading reviews.

Saving up for retirement as a struggling musician isn’t easy.  Even if you manage to find steady work, there is a good chance that you will be earning a low salary. And even if you find a job which pays well, it may well be a temporary gig.  Even if you only have a small amount of money saved, however, you can invest through a robo-advisor and build a nest egg!