Consumers aren’t the only ones feeling the economic fallout of the coronavirus pandemic. Gig workers like Daniel Chan have to be smart in how they manage card debt in the coming weeks. Here’s how two choice credit cards and some know-how are helping Chan make it through.
The Bank of America content was last updated on May 3, 2021.
How can you make financial problems disappear with a flourish while living your best life? According to master magician Daniel Chan, it’s by hedging your bets and preparing for many different scenarios.
Before Chan began his entertainment career, he was in the tech world.
“I was working in pre-IPO Silicon Valley at PayPal, in the same offices as Elon Musk and Peter Thiel,” says Chan. “It was in the early 2000s. I had only vested 13 months of my stock options when I left to pursue my dream of performing magic. Because of that, I gave up approximately three quarters of my stock options.”
It was a risk, but the gamble paid off. Since leaving PayPal, Chan has honed his craft and transformed it into a highly successful business doing what he loves. Today, instead of toiling away behind a computer screen, he performs for the movers and shakers in the industry.
Buzzfeed nominated Chan as Silicon Valley’s Favorite Magician, and he is now known as the “Billionaire’s Magician,” specializing in over-the-top parties for the area’s tech elites. In fact, his whole family is involved in the enterprise: Chan’s wife, Katherine, is a noted balloon artist and their young children – James and Grace – are jugglers.
Yet, while Chan believes in the importance of doing what you love, he’s also immensely practical. He plans for the future by always keeping an eye out for emerging opportunities and is ready to pivot. As such, Chan is managing to stay afloat in the current climate – and not leaning too hard on his credit card to make it through tough times ahead.
Can you describe the beginning of your business?
I started off street-performing. When you’re out there in public, you have to keep your audience. If you lose the people’s attention and they walk away, you don’t get paid and you don’t eat! After that experience, almost everything else was relatively easy.
In the beginning, though, I didn’t realize all the things I needed – such as performer’s insurance and all the other things associated with doing this type of business. But you learn as you go. In hindsight, it’s shocking how much money I’ve spent on advertising, books, DVDs and convention fees.
How do you use your credit card for business?
I charge everything that’s associated with my business whenever I can. I currently use the Bank of America® Customized Cash Rewards credit card for these transactions, and the cash back is definitely an incentive to charge as much as possible.
I typically charge magic supplies, equipment, Google AdWords, Facebook Ads, LinkedIn learning, convention fees, bridge tolls, performer’s insurance, gas and phone and internet.
For personal use, though, I love my Apple Card because of the seamless integration in the Apple ecosystem and instant phone notifications.
All in all, I have stayed pretty much debt-free. But that’s the past and now. To expand my dinner show from a pop-up to a permanent venue, I will probably need to take on debt or investors.
See related: Guide to the Apple Card
How are you managing the present situation?
Because of what is happening with COVID-19, we are on conservation mode. I’m a corporate entertainer and I’ve had over 20 events cancel on me. Each gig ranges from $500 to $2,000. This year, I’m probably going to make close to zero for the next two to three months, and that’s never happened before – even after 9/11.
For the next few months, I will lean into my savings. I just consider this current situation a forced sabbatical. I’ll use my credit card, too, but effectively. Credit cards are great for most transactions because they offer protection from fraudulent activity, as you can dispute and chargeback questionable charges.
And your business’s future?
I’d love to bring on two more team members in the next few years to cover many of the family events and graduation nights. I’m currently 42 years old and performing at grad nights at two in the morning is tough on the body!
At this stage, I’m researching partnerships with brick-and-mortars and also looking into moving my Bay Area Dinner Show into a permanent physical location. I’m continuing to build my network and my team so I can pursue opportunities that arise.
Any advice to entrepreneurs who are just starting out?
There is a saying that I like and live by: “Your thoughts determine your actions. Your actions determine your habits. Finally, your habits determine your destiny!”
At one time, I was focusing too much on the low-hanging fruit without consideration of my long-term goals and objectives. If I could do anything over, it would be to say “no” more often.
What about borrowing money and using credit cards for the business?
There are definitely key inflection points that you need to borrow, but most of the time, it doesn’t make sense to borrow. In my experience, it’s best to stay lean. It’s crucial that you measure everything and decide what is important to you. I’m constantly analyzing my income and expenses.
Always set text alerts for your credit card transactions so you’re aware of what’s going out, too, and pay off your balances in full. This way, you can keep your credit in good shape. Most importantly, save money whenever possible!