Crystal Mais, entertainment lawyer and founder of Cornerstone Creative Management
Photo credit: Ride the Wave Photography
When the dotcom bubble burst over two decades ago, not many people could have fathomed the positive impact it would have on those coming of age in its aftermath. However, from branding to marketing, e-commerce, and e-sports, today’s creatives have discovered a number of foolproof ways to gain riches. But when there’s a fundamental difference between riches and wealth, understanding this difference becomes of the utmost importance when considering what we’ll leave for the generations that follow.
“We’ll see a lot of creatives who are able to be rich and poor within the same decade,” stated Crystal Mais, Esq., Entertainment Lawyer and founder of Cornerstone Creative Management. In our interview, Mais shared with me her thoughts concerning the issues that plague many creatives who are attaining riches. “What’s common is that artists don’t discern the difference between being rich and being wealthy,” she said. “Rich is an adjective and wealth is a verb. Rich obtains and wealth sustains. In order to maintain wealth, you have to actually acquire assets and consistently find ways to make your money work for you.”
Earning her Juris Doctor in Intellectual Property and Entertainment from Tulane University, Mais has spent a considerable amount of time getting to know the ins and outs of the industry. Her comprehensive knowledge base and experience as a former employee at Netflix have lent to her ability to better guide the artists she manages through her company, Cornerstone, as they navigate their careers creatively and financially. According to Mais, wisdom is worth a lot more than we generally think.
“How I grew up, I wasn’t the wealthiest or the richest kid, but my mom, she worked so hard so that I could have access and exposure and she had knowledge that she could impart,” Mais recalled of her parents’ influence that allowed her to see the different ways in which people could make money and maintain wealth. “Even when my mom worked for someone, she worked for someone through her own business. So I always saw value in having ownership.” Inspired by her father’s creative path and her own interests in the music industry, Mais focused her attention on Hollywood in the hopes that one day she could help creatives protect their natural assets while building ownership and cultivating generational wealth. Mais was kind enough to share here some of her most important lessons for those of us who are doing our best to creatively break generational curses of poverty.
Never Sign A Contract Without An Attorney
Most of the big money that creatives earn is generated through strategic partnerships and collaborations with more established brands. Understanding what these partnerships entail before entering into any agreement could mean the difference between coming out on top or leaving with debt. According to Mais, having a clear vision of career goals and a team of trusted advisors is an artist’s best defense against missing out on the financial success that can result from partnerships. The most important member on that team, she says, is a good attorney who is willing to share in your vision. “You want a lawyer, or an advisor, that will support you in navigating your strategy,” urged Mais.
As one of the most knowledgeable and possibly most trusted members of the team, an attorney protects their client from signing binding agreements that have the potential to restrict their growth as an artist and leave them in financial holes that could sabotage their family’s generational wealth. Mais revealed that getting tripped up on certain vocabulary used within contracts and signing out of desperation, not recognizing the leverage they have before committing, are the top reasons most artists end up getting the short end of the stick when choosing partners. “Ignorance is not an excuse in court,” said Mais, who emphasized that disputes after signing can be costly, not often leading to favorable litigation on behalf of the signee.
Understanding that “in perpetuity” means forever, “recoupable” refers to revenues that must be paid back, and the impact of signing “exclusive” deals that can keep you creatively deadlocked for years are all things that an attorney can help you navigate. However, Mais is quick to point out that if an attorney is not able to explain things plainly or effectively address your grievances, they shouldn’t be on your team. “The goal is literally for your lawyer to be able to help you negotiate deal points and help protect your ownership and interests. If you don’t even know what those interests are, what’s the point?”
Focus On Asking Questions And Building Assets
Before entering into any partnership, artists should make it a priority to understand what their potential collaborators will be providing in exchange for their ownership. Mais put forth several questions that should be considered. “What is my split ownership going to be? How long am I going to be in this contract? What am I obligated to do based on the terms of this contract? How long is everyone going to maintain an ownership interest within this contract? What is my leverage in this negotiation? What is the added value that the collaborator brings?” Keeping your long term goals in mind, these questions will help you best determine exactly what is at stake in the deal. Once terms are negotiated, building our asset column should be the next step.
Filling your portfolio with things that don’t move like land real estate and those that have the potential to appreciate like physical art are smart ways of getting started. “Wealthy people keep about 9% of their wealth in treasure assets. Physical art is a treasured asset. ” Mais explained treasure assets as those we hold, making them easier to liquidate or trade when needed. “You can also leverage physical art as an asset with a bank. If you need collateral for a loan, more banks would lend against art than they would against jewelry.” And if you have children, getting them started can be easier than you think. “Wealthy families gift their kids in stocks,” declared Mais. “Depending on how that stock does, if you have a child right now and for their first birthday, I gift them in stocks and we let them sit until they’re twenty-one, they could potentially be millionaires without doing anything.”
Create A Plan To Protect Your Property
Mais says that when it comes to most things, she follows the seven P’s – Proper prior planning prevents piss poor performance. “Everything that you go into, plan ahead of time.” This planning includes what will happen after we’re gone. “Wealthy families are very big on estate planning,” shared Mais. Taking into account some of the most ugly estate fights that have caused undue pain and divisiveness amongst the world’s most wealthy families, Mais says that normalizing the conversation surrounding death and getting our affairs in order before we go are extremely important. “All of these things could have literally been avoided if somebody wrote it plain on a piece of paper.”
Before anything else, Mais suggests adding life insurance as your first investment. “When you have life insurance, especially when you’re a high net worth individual, even when you’re alive, not only will it protect your family when you pass, but you can also leverage it as an asset.” This also includes purchasing life insurance policies for newborns while coverage is almost guaranteed and rates are their lowest. “Get your affairs in order and do it early.” All with the help of a lawyer, or CPA, of course.
Teach Your Children To Do Better
Mais is adamant that building generational wealth begins with financial education and literacy and followed through with patient planning. “Even if you leave somebody a lot of money, if they don’t actually know how to manage that money or how to make that money work for them for the future generations, there’s no point. It’s basically like throwing it down a hole.” Educating ourselves and our children on how to make smart financial decisions is what it takes to sustain what we’ve obtained. “It’s a marathon, not a race in terms of building generational wealth, especially when you’re building from scratch,” she said. “My mom gave me certain wisdom. She might not have necessarily been able to give me the capital, but that wisdom was the baton that she could hand to me so that I could run the other part of the relay for our generation. And I expect my kids to run another part of the relay.” To continue this important conversation with her online community as well, Mais plans on releasing an ebook series, titled Crystal Clear, which will be a resource to accompany creatives when negotiating their next business deal.
And for those artists that may feel like they’ve negotiated one too many bad deals, Mais offered a bit of encouragement. “It’s never too late to fix the damage. All it is now is that we have to invest the time to be able to make ourselves more knowledgeable or at least empower people around us to be able to handle our affairs for us. But you absolutely always have time. You can always turn your trauma into triumph.”
