How much do you think the top producers are worth? i.e. Timbaland...

[NajdorfDefense]

[ QUOTE ]
El D,
Easily could have higher rate of return based on what he's done with his money.


[/ QUOTE ]

No, not easily. He still has to pay tax on gains. That is virtually unavoidable, unless you are Blackstone/KKR and qualify for special tax treatment and can defer it temporarily. He still gets K-1s whether he's in HF, VC, PE or Real Estate.

In addition, assuming PW does have a smart, savvy manager, they will have parked a large minority in munis and fixed income, so that if he ever suffers a total loss of income/gets hit by a bus/no longer popular, he can live off the interest. If you talk to GS or the like, they'll typically say put 40% in munis for safety and lower volatility, then you can get aggressive with the other 60%.

Munis 0.4 x 0.05% = 2% after-tax.
Other 0.6 x 0.12% = 7.2% x (1-0.30) = 5% after tax
Total = 7%. I assumed 8% Net in the example above. [or 14.3% on aggressive investments - very high!]
This is a very typical asset allocation for celebs, sports figures, founders, and the like.

edit - really good managers charge high performance fees, i.e. 20%+ of profits plus 1-2% a year mgmt fees. The numbers I quoted above are net of that, which would require 16-20% gross returns. Very, very hard to do.

If you are saying it is *possible* he is making 40% gross a year in private investments, I agree. It is far, far from *easy* however.

[ QUOTE ]

Likely has asset value outside of just the cash he has banked from his income/investments.


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Yes, and I said that specifically at least 2x.

I don't the the value of his shoe brand, for instance. However, industry data, public filings, and other research doesn't show him having a significant windfall in those areas as of yet.
If you want to assume $40m from income and earnings and another $35mm from private holdings that no one knows about that are yet unrealized, then fine.

He may get to $150-200mm or more in 5-10 years, of course. He's just not there yet. I'm always rooting for more rich people!

[NajdorfDefense]

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Even an average tax account would have them at the very least incorporate themselves, and lower their taxable income to as close to $0 as possible.

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These notions are retarded. Companies still pay income tax at a very high rate. Any fixed income holdings generate pure taxable income regardless, unless they are munis. Trading munis generates taxable income. Hedge Funds generate massive amounts of short-term gains/income, generally speaking and are hugely tax-inefficient.

Pls demonstrate how an investor putting in $5mm or more a year into taxable investments generates 12% a year and $0 taxable income on an annual basis. I can't wait.

Hint - calling yourself Pharrell LLC, LLP or Inc doesn't make taxes vanish. Of course, you're some teenage n00b with zero money, estate, and tax experience for HNW individuals, so you probably have some magic formula. Go!

[skunkworks]

Wow Najdork, you really turned up the inner dickwad in you after jaydub got all retarded in this thread.

[Butcho22]

I get a half a mill for one beat, you get a couple gra-a-aaand

-Timbaland

[szw]

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Wow Najdork, you really turned up the inner dickwad in you after jaydub got all retarded in this thread.

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Seriously. I dont' think you're allowed to have an avatar that you do if you're gonna be such a damn nit.

[EYEWHITES]

i would guess about 300 to 400k per song.
but they make most there money on the artist album sales. a producer will typically charge certin fee and take up to 3% of income based on album sales.
i know avril lavignes first cd, who ever produced it, also wrote most the songs got 3% for every song they wrote and produced.
my friend just recorded a demo with a big time pop producer, produced the fray, and my friend gave me the run down on how it would work for him

[Xaston]

[ QUOTE ]
I get a half a mill for my beats, you get a couple gra-a-aaand

-Timbaland

[/ QUOTE ]

FYP