A Millionaire in the Music Business – Part 1

The best investment I’ve ever made, by far, is in Apple. Not just their stock, which I have owned for quite some time, nor working for the company as I have done for the last 5 years. More so, in the Spring of 2003 I purchased a Mac G4 Dual 867mhz MDD. This computer, quite literally, changed my life…

The Beast

From 2003 – 2019 I used this Mac G4 + Pro Tools to produce, record, and/or mix most every music project I have been involved with since its purchase. Yes, that’s right, The Beast is still humming along today as it celebrates its 17th birthday! I have always run it on OS X Jaguar 10.2.8 + Pro Tools v6.1 with 512mgb of RAM and a 60gb internal hard drive.

In terms of technology, this might be akin to showing up to the Monaco Grand Prix in a vintage Corvette. My computer, however, has never failed to cross the finish line. It’s won me a lot of prize money along the way. Trust me – it’s not what you own, it’s how you drive it!

The Beginning

The move from large tape machines and giant consoles with meters, knobs, and faders happened quickly in the recording world. Literally one day I was working on a 2” tape machine and a 48-input console and the next day after purchasing my rig, we transferred those tapes into Pro Tools. I never looked back. 

The first song I ever mixed on my computer was Nicole Sponberg’s “Crazy In Love” written by Jay Joyce and produced by Mark Heimermann. It remains one of my favorite mixes ever. You can listen here and let me know if it still stands up…

Have Computer, Will Travel

I installed my computer in a heavy-duty mobile rack on wheels, surrounded by protective foam. With a new mobile digital recording rig, I had complete freedom to move about town. Suddenly I was recording and mixing anywhere I could access electricity. I made records in basements, bonus rooms, spare bedrooms, empty office suites, and just about every studio in the Nashville area. I even mixed several records in my garage during one mild winter and spring. This was not a converted garage, I just backed the cars out and wheeled in my Pro Tools rig, covering the lawn equipment and tools with white muslin cloth! 

Later I took up residence at the ever-eccentric Darkhorse Recording for a year-long stint in their Barefoot Room where I mixed records day in / day out almost non-stop. In 2005 I fulfilled a dream of opening my own studio, The Workshop, in Brentwood. There I could track, overdub, and mix projects from start to finish. As the industry evolved (or devolved depending on your positioning), I move out of that facility in 2010 and into a small mix room I built in my home. I continued mixing there for over 9 years, enjoying lower overhead and increased profits.

I’m pretty much retired from the music business now, but it was a hell of a 30 year ride, with over half of it spent with The Beast – my trusty G4 sidekick.

No Upgrades?

No, I never upgraded my computer. I never really felt the need to. Technology simply changes too fast, and those who stay on the cutting edge pay a very expensive premium – for what I am not always sure. 

Inevitably Apple discontinued my G4, replacing it with a newer G5 and then various iterations of the Mac Pro. In addition, Pro Tools upgraded their hardware to an “Accel” version with more power, and they released newer software versions with enhanced features.

I stayed the course with my original equipment. I just did not see the value in spending $30,000 on a new Pro Tools rig, only to hit “play” and have my mix sound the exact same as it did before the upgrade. What works works, let’s GSD.

Some Pitfalls

Yes, I have spoken with several folks who have spent $30,000 and more on a computer + Pro Tools upgrades. Sometimes I hear justification based on tax deductions, as if a tax deduction somehow makes the gear free or offsets your tax bill by an equal amount. To be clear, buying equipment for the sole purpose of a tax deduction is a poor financial decision. Other times new gear is purchased with the assumption that cutting edge technology will bring more work or command higher rates. This is often fallacy, so don’t fall into that trap. At the very least, consider your idea very carefully (I’ll show you how below). Others will borrow money for new gear, which doubles down on the pain. It is very hard to build wealth while you are paying interest on rapidly depreciating assets.

Cost of Capital

When investing in the stock market it’s not uncommon to double your money every 5-7 years. Consider a $30,000 investment on some new gear. In very rough numbers and very simple math, I look at that capital as potentially worth $60,000 in 5 years and $120,000 in 10 years by way of compound returns in the stock market. In that same 10 years my $30,000 investment in recording gear will probably be worth $3,000 as used gear – if I’m lucky…

So – Over the course of 10 years, will that $30,000 investment in gear earn me $117,000 ($120,000 – $3,000)? That’s going to mean an increase of ~ $1,000 month, or probably increasing my rate by ~ $10/hour. Now judge that hourly rate against what the market will bear. Eventually I will “cap out”, where I’ll be charging the upper limit of what the market will bear relative to my total investment in equipment.

Don’t get to the point where you can’t charge enough to account for the cost of your capital. If you do, you’ll be trying to climb the mountain of financial success but losing traction. The depreciation on all that expensive equipment will be dragging you down and you will miss the opportunity for compound returns on your capital elsewhere.

Building Wealth

Instead of putting my business profits into rapidly depreciating recording equipment, I chose to take my profits and invest in stocks, bonds, small startup companies, real estate, precious metals, commodities, and even cryptocurrency. I invest my hard-earned money in assets that increase in value, and I choose them wisely. Since 1990 investing has been a passion. I try to learn something new everyday in the realm of personal finance. These investments provide the financial freedom I cherish today.

Buying a bunch of musical gear every year thinking you are building your business or building your brand is not the automatic return on investment that many believe. Your capital needs to be thoughtfully allocated. You want to factor short term needs versus long term returns. You want to do this math relative to the current rate trends of the industry as well.

Part 1 of 2

This is Part 1 of a Millionaire in the Music Business. I know my idea of using the same computer for 17 years will not be viable for everyone. It’s simply meant to be a look at wise and calculated choices with regard to capital allocation in your business. This will give you your best shot at financial success.

In Part 2 I’ll share some contrarian ways in which I ran my business – ideas that ran against the idioms of the day and counter to the norms of the music industry. These ideas and methods were hugely instrumental to my financial success, though many considered them crazy. I will share them next, so be sure you subscribe below so you get an alert when I post it.

Raise A Glass!

So… take it back to that ol’ Mac G4 and raise a glass to The Beast – the tried and true studio companion that rode alongside me on my journey for 17 years. We rode some hard miles, some fun miles, and some very exciting miles together. We had some laughs, shed some tears, and enjoyed some of the craziest studio moments imaginable – things you wouldn’t believe if I told you. It never once faltered or let me down.

I’ll never trash it – maybe I’ll try to turn it into a clock or something, I dunno. It still stands as my single greatest investment to this day, worthy of honor in our household, as it set the course for a life of financial freedom. Cheers!

The Beast – a G4 Dual 867mhz MDD Power Macintosh

Disclaimer – I work for Apple and own Apple stock. The views and opinions expressed here are my own and are not meant to represent Apple in any way. This is not an endorsement, offer, or encouragement to buy Apple equipment or Apple stock.

7 Replies to “A Millionaire in the Music Business – Part 1”

  1. Todd— GREAT post man! Great perspective. I also had the beastly G4, which outlasted cars, house, and the industry transition. Incidentally, I’d occasionally have guys half my age come in that I was producing and basically say, “Oh, is that a G4? That’s so sad.” BTW— my G4 outlasted them too.

  2. Wish I’d known you 25 years ago. I made some good choices (paid-off house and vehicles for the past 5 years – no “Brentwood Envy”) and some not-so-good (buying pro SD video gear in ‘95 for a 5-year tour, then holding it through the move to DV and into HD). Ah, well. Glad you’re sharing your experiences. Cheers!

    1. Sounds like the good choices far outweigh the others. Mine as well – as long as you can keep a winning percentage things will turn out well. Congrats on the paid-off house – feels good don’t it?!?!?!

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