If you are the creative type, this new retirement pension plan might be the best option for you to not only make money now, but to invest into your future. Think of it like putting your art work in the bank for money later on down the road. However, you do need to make money now, just like everyone else. After all, they don’t call you a starving artist for nothing, right? Well, this pension trust for creative people might just be the thing for you.
According to the New York Times , 10 years ago, a trust called the Artist Pension Trust was created to help starving artists like you. In fact, they started out 10 years ago by contacting local artists about becoming a member of this pension plan for now and for the future. You see, it doesn’t just work for your future to have a good nest egg to fall back on but it works for you now, too. But how does it work? The New York Times reports that the way it works is about 250 artists put their art into this “pension plan” like an art gallery. However, when one work of art is sold by one of the artists, a percentage of the money goes into a pool for everyone involved to get a part of it. This way, it helps new artists and older artists alike. It helps those who haven’t sold a piece yet, so they can have some income from it as well.
According to the co-founder and chairman of the artists trust, Moti Shniberg, the plan diversifies.
“The diversification is like a built-in insurance mechanism for the artists. But like any successful fund around the world, it’s a question of strategy and sound judgment. In this case, about what artists to include and when to sell.”
Shniberg actually came up with the idea for this “artists pension” while he was watching one of his artist friends’ struggling to make ends meet. He works with Dan Galai on this artist’s pension trust fund, who is an economist and is also an expert in the theory of diversification.
Although it was built as a pension, they decided to pay as they went so everyone could see how it would work out. According to one board member, Al Brenner, since it has been 10 years since they started this artist trust fund pension mechanism, they were right to start selling the work of their artists, but they are very cautious in what they do sell, and they don’t want to sell anything too soon.
The BBC has reported that thousands of workers are currently at a risk of losing their savings as per their pension plans, according to the industry regulator. While most artists work on their own and not for the government, they are generally not affected with the issue. However, independent experts claim that the problem could affect over a quarter of million people per year who currently save their money on master trust pensions.
While several sportsperson change their career to sporting speakers when they retire to keep hold of their earning even after their work-life, artists are generally left out of the limelight when they turn old. This is where the “pension plan” can help when one artist’s work is sold by the other and everyone gets their part; younger and the older ones.
Also, according to the report by the New York Times , since they started this 10 years ago, they have added 100 to 120 new artists every year. These artists are from 81 countries which helps in the diversification. They select the artists by nominating them. The nominations go on in Asia, Europe, and America and each region nominates new members every few months. However, those who haven’t been nominated can still apply for the artists pension online to be included in it.
The trust doesn’t include every artist who is nominated. Last year, there were 833 artists who applied and only 12 percent were allowed in. The artists in this artist trust had eight different regional trusts, with a ninth one that was opened up in 2013, The Global Trust. They are all capped at 250 members. And, since the trust is growing like crazy, they plan to open another Global Trust. The second Global Trust plans to allow artists from any location in the world. The first Global Trust has grown to 628 artists since 2013 when it was opened.
Now, as soon as a piece of art is sold, 40 percent goes to the artist who made it and 32 percent is set aside for artists who are in the same trust membership. Another 28 percent goes to dividends and expenses for the 50 private investors the whole trust has.
What a great concept this is!
[Photo by Peter Macdiarmid/Getty Images]