Two very different versions of Austin's downtown. As seen from the Pfluger Pedestrian Bridge.

 

Camera: Leica SL. Lens: Panasonic 20-60mm. Focal length 20mm.

Camera: Panasonic S1R. Lens: Panasonic 24-105mm. Focal length 24mm.

I'm reading more and more about generative A.I. and it doesn't sound like a good thing for the vast majority of working photographers. Especially portrait photographers. It's not an existential dilemma for hobbyists, fine artists and all the folks who love the process of taking photographs but are not dependent on making money from their craft. Critics can dismiss the samples they've been shown on some websites as "fake" or "inferior" but I've seen some really convincing images and I would suggest that we're already seeing a workable quality in computer derived portraits even though these are the very early days of the new applications of A.I. in photography. 

On one level I really care about the incursions into the business side because it would be nice to eke out a few more profitable years doing the kind of work I really have enjoyed over the last 40 or so years. This revolution in imaging might not affect the very highest levels (Annie Leibovitz? Platon?) of photographers but for most others it will mean a significant devaluation of hard won abilities, talents and marketable products. 

On the other hand I'm somewhat insulated from the coming financial carnage by dint of being so close to exiting the commercial markets altogether. What does the generative A.I. onslaught have to do with me personally? With the exception of denting my self-identity as a portrait artist and reducing opportunities for easy billing, not much. In fact, I am so confident that taking images will continue to be fun and fulfilling that I ordered yet another lens to play around with. It should be here mid-week. It's the Nikon mount version of the Voiglander Ultron 40mm f2.0  SL IIS lens. I've been buying the DSLR/Ai Nikon mount version of some lenses like this one because the mount is so easy to adapt to any of the mirrorless cameras. And the selling price of the lenses in this mount are much less expensive than the M versions because the rangefinder coupling, which is expensive to implement well, is not needed or (obviously) included on the Nikon F mount versions. Yes, the adapter makes the lenses a bit bigger but on a relatively large Leica SL camera it hardly matters. 

I had the thought this morning that when all the cost efficient, bottom line focused businesses have fully accepted A.I. assisted or created portraits of their staffs, and all the landscapes are being rendered by Mid-Journey and DALL-E, that perhaps authentic human-made images, seen and captured with human thought, might become more collectible and have more intrinsic value to collectors and appreciators of photography. Also, the theatrical act of the portrait session might become more valuable as an experiential indulgence. An elite and economically lofty investment. One never really knows that much about the future. That's why it's so hard to predict accurately. 

Sitting around the studio printing out the tax return from the CPA. Damn! You actually have to pay taxes when you roll over funds from a tax deferred account to a Roth IRA. Who knew? (Besides my accountant).

 

The secret is to buy cheap lenses! No, that's not exactly right....

And, of course, I had to ask my accountant, when printing out the tax forms to put in the filing cabinet, "do the forms print better on an Epson printer or a Canon printer?" And, "should I use archival ink?"

I think we tend to concentrate on camera gear and photographic experiences on this blog site but we sometimes forget that my original thought in setting this up was to cover all the aspects of being a photographer and also running a photography business. To share what it's been like to go down the pathway of running one's own business. An undertaking that's very much about making and licensing art. Which means it's a business constructed and run to make a profit as well as fun photos. 

We generally set aside a full week each year to round up all the 1099 forms, find all the receipts for expenses and cost of goods, go through logs and invoices, etc. We have to be in charge of our own accounting, our marketing, our retirement planning and investment strategies as well as our healthcare costs and every other detail of business existence. It's a totally different mindset than that used to make creative products or to collaborate creatively with our customers and our supporting vendors. It's very much right brain versus left brain. And I'm never sure which brain is winning. 

I was joking around with my CPA (he's about my age) and I asked him what sort of accounting formula there is to determine when a person can or should retire. He suggested that as soon as your dividend income exceeded your profit from the business, year to year, that you could bail out without reducing your quality of life. Nice rule of thumb. I'll file that away for future pondering. Of course you could just spend down principal and hope you don't run out of $$$ before you run out of "runway." 

Every April I do a "State of the Union" for myself and the business. Our "Union" is strong. We billed more in 2022 than we did in the year before by about 40%. I chalk that up to the overall economy recovering from the Covid epidemic. Our camera purchases were no larger than in 2021. That was a good trend for overall profitability. We underspent on marketing (like, zero) and were still able to increase earnings year over year. 

We shed a number of business niches and clients that we deemed not to have a good profit-to-fun ratio (PTF ratio) and replaced those "time slots" with more swimming and strength training (which, incidentally, is paying off in the swimming). We've been studying the market for images and reorienting the business around our current predictions. Our research shows that we have a couple more years of potential, traditional photo market left and we'll work to maximize our profits from the business in those two years. After that we'll shut down.

As a result of long term financial planning we have been able to move all but a small percentage of investments from tax deferred accounts to Roth IRAs, or after tax brokerage accounts which will go a long way to minimizing the effects of RMDs (required minimum distributions) in retirement. We don't talk about things like this nearly as often as we do about lens edge sharpness or smoothness of focusing rings but maybe it's worth sharing for younger photographers who are now navigating the fun puzzle of building wealth. Tedious process but better than the alternative. 

Part of the plan was always to enter the last stages of the business with our mortgage paid off, our liabilities at zero and with enough cash in the "bank" to weather just about any foreseeable storms on the horizon. With inflation and down markets it's always a moving target but if you get the windage just right...and lead the economy by just a bit...

Photography has never been a remarkably profitable enterprise, especially on the small scale which we pursued it. We were able to eke out a decent living from the cash flow of the business but the real secret to building wealth is less about making a lot of money than it is about saving a lot of the money you make. And investing it wisely. 

Albert Einstein is said to have remarked that “Compound interest is the eighth wonder of the world. He who understands it, earns it…he who doesn't… pays it.” I paid little attention to this reality for the first 40 years of my working life because I have been blessed to have a partner who understood it early in the game and set the right course. I was left to run on autopilot --- as long as I contributed my share.  And it's true. If you are well invested and get a 10% return (annually) over time on your money you'll double your net worth every seven to ten years. That's pretty cool. No....that's amazing. 

The secret, as explained by my partner, is simple. To quote our in-house expert: "Keep your damn hands off the money." To which I would add: "Always ask for the senior discount..." 

I will be officially finished with 2022 taxes on Monday when I transfer a "huge" (all relative) amount of money to pay for the consequences of that darned roll over. After that it's all fun and games until the well runs dry. And by "Until the well runs dry" I mean it metaphorically --- about cash flow. 

One of the lovely things about getting older is that you focus more and more on what you consider to be the important things in life rather than the bling. Friendship over prestige. Happy routines over flashy vacations. Shiny cameras instead of mistresses. Swimming over drunken debauchery. And a good night's sleep over bad habits or questionable judgement. Photography over watching sports on TV (which was referred to on a TV documentary about the ancient Greeks as: theater for stupid people).

That's the "State of the Union" for my small business as I see it today. And I'm pretty happy with the results. 

Hope you are barreling into tax day with huge profits and a better talent for organization than I possess. 

No April Fool's messages this year. Look elsewhere.