After completing their first grueling 1,000 gig tour, Mick Jagger and Keith Richards made one of the best business decisions of their short careers. They hired a manager, Andrew Oldham, for the Rolling Stones. Mr. Oldham informed them that musicians, no matter how talented, are a dime a dozen, and unless they begin to write their own songs they will soon be out of business. He even locked them in a kitchen and told them not to come out without a song!
What is the problem with doing 1,000 gigs or 10,000 in a lifetime? Once you walk off the stage, the performance is history. You generate no revenue unless you perform once again. And unless you save some of the money you earn and invest it, you have merely sustained yourself to that point.
Jagger and Richards became cultivators of wealth by composing their own songs starting in their early 20s. These new songs acted as the base generator for all other revenues including the tours by the Rolling Stones. The royalties earned from these songs are a perpetual source of income for the composers and eventually their heirs.
Of course, not everyone has the creative talent of the Rolling Stones. But most people have the ability to start building their own “royalties” for the future. Consider some of the cases I have written about in the past, like J.T., the Texas forest farmer. He started with “just a few acres” and then kept adding to this inventory. Today he plants 3.5M trees a year and is worth over $30M. In an earlier blog I profiled Brian who failed the high school equivalency exam several times. As he said, “if I can become a multimillionaire anybody can. . . sold all my toys. . . and bought my first 4-plex.” Today he owns 7 of them. And finally Malcolm, the moonlighting firefighter, who realized early in his career that fighting fires is something that cannot be inventoried. He started with one fixer upper house and rented it to students. And the constant student demand for housing is nearly a guaranteed source of wealth from his real estate holdings.