BennyEast.Com/Blog The official blog of Kenny West

Fridge, Washer, and Dryer

I'm going to be getting a new fridge, washer, and dryer very soon.  Things are at the point in the trust where it's finally being moved, or I believe it has been moved to the new trustee in Beverly Hills.  So now they can start to manage those assets and distribute them as they see fit.

There's this trustee guy that kind of administers the trust... he's the one I email back and forth with.  Then there's a new person that I just found out about the other day, a portfolio manager.  So, he's in charge of the money end of things.  Anyways, so I guess in the next few months our first distribution will be scheduled.

My only plan right now is a new washer and dryer and fridge.  I have to do research and find out which one I want and what's the best bang for the buck and all that jazz.  Ideally I'd like to get something on sale.

Then he writes the check out of the trust for the washer and dryer and fridge.

I decided okay so new appliances are great... But... I feel like there's MORE potential there!

I sent Mr. Beverly Hills Trustee an email today about exploring the potentials of this trust beyond just... He writes me checks.

Maybe I'm just a dreamer... But I dream big!

See, I think of it as more along the lines of investment capital.  It's like this, let's say you want a loan to buy a house, AKA a mortgage.  A bank will loan out, from a pool of money, to an individual to buy a house.  They then charge interest on that money as you pay it back.  If you default on the loan, they take your house and sell the house to recover as much as possible on the bad investment.

Banks also make personal loans.  They also make loans to small businesses, like a nail salon, or a spa.  Let's say you want to open a food truck stand, you could borrow money for the food truck and the supplies.  Then pay the loan back with the profits.

Now, generally when it comes to things like trusts, the assets are invested in various types of investments.  You could just own stocks.  It could be mineral rights.  There's intellectual property rights.

For example, when an author dies and leaves the future book sales to their trust.  That trust will then get income from future book sales.

There's generally cash flowing in and flowing out.  But with the cash IN the trust, you can use that to pay bills associated with the trust.  Or you can have it invested in stocks and bonds and what not.

Our trust is comprised of a general investment portfolio.  The money initially came from my grandparents bank accounts, their house and cars were sold and put into the trust.  Etc. Etc.  So the physical things were converted over to shares in mutual funds and so on.  Those funds produce income and also go up and down in value.

So if you buy shares in Clorox Company they pay a quarterly dividend and the shares bounce around up and down in value or what's called market value.  Ideally everyone wants their shares to go up and up and up.  Although some shares stay very stable and have a low amount of price changes, but 4 times a year they will pay what's called a dividend.  This cash is deposited into the account and you can then spend that money on things while still keeping your shares in the company.  You can also reinvest the dividend back into buying more shares.  There are advantages to both options.

Obviously there's tax on dividends.

Okay so.... let's say instead of a portion of the trust being invested in shares of publicly traded companies or mutual funds... We take 50k or 100k and invest that in a non traditional investment... Something called private equity.

What I was proposing is that we use some of the money INSIDE the trust as a venture capital fund of sorts for my personal creative pursuits.  Let's say I want to put out a CD.  Or a book.  I can use a 50 or 100k advance from the trust and then pay the trust back PLUS interest.  I mean, really I'm just paying my future self back, but in the mean time I'm also getting a return on the trust value.  The greater the total value managed the more that the bank gets in fees as a percentage.

So if you charge 1 percent of 100k you get 1k a year... IF you charge 1 percent of 1 million you get 10k a year, if you charge 1 percent of 10 million you get 100k a year.

The bottom line is, you want to get more money back than you put in...

The ROI or return on investment.  Most creative people don't have means to capital.  Most projects never happen because there's no funding.

So, let's say I fund my own acting lessons, head shots, auditions...

And eventually I get a paying gig that is more than the money I put into it... ROI.

Or I could just spend the money on a vacation to somewhere tropical...

My thing is... Vacations are for AFTER you've made it big-time.  Right now it's time to work.  It's time to invest in being creatively disruptive and thinking outside the bun.

Obviously things can go wrong.  I can make a whole album and no one buys it.  I could take acting classes and get no gigs.  I could finish my book and no one buys it.

This is why I want to use income coming from the other investments to then invest back into creative things.  YES they may not go anywhere, but that way it's sustainable income that was lost, or regeneratable income.

Let's say that it takes 6 months for the trust to general 10k in income.  I don't know how long it actually takes to generate that, it could be one month for all I know... but we'll just say it's 6 months.

SO maybe I use 5k of that to hold for taxes and fees... Then I take the other 5k and I put that into buying new equipment for a recording studio.  Or maybe I buy a camera of some sort.  Or maybe I buy DJ equipment and start DJing.

I could basically just start buying hard physical assets.  But instead of me owning it, the trust will own it.  And I'll just kind of use that equipment to create stuff.

Let's say the trust buys a recording studio and I start using that studio to produce music.  Then the music gets uploaded online and people start buying it.  Those sales could be, perhaps 10 or 20 percent of the sales go back into the trust and then the rest comes into my own pocket.

Just ideas.  Maybe I get a literary agent, or a talent agent in general.

Let's say a talent agent wants 20k a year to manage me.  And the trust is making 30k a year, or 60k a year from the assets invested.  I can use 20k of that income to pay the talent agent and then the talent agent helps me get gigs... Hopefully I get enough gigs to make even more money than the 20k a year being spent on it.

ROI.  Return on investment.

Then I can use that money made to reinvest again.  And make even more money.  Ideally the money can then be used to increase the size of projects I work on.  I can undertake even bigger projects.  Make more music, make more movies, write more books...  Etc. etc.

So, we'll see what comes out of it all.  I'm just trying to make an opportunity of it and cease the moment and try to use this gift to springboard to something even bigger!

That's the plan.  To be the number one man in Hollywood!  Some day.  And then make it possible for other creative types to dream and achieve their dreams as well.

For now though... I'll just be getting a new fridge, and washer, and dryer... Which works for me!