Friday, July 11, 2014

A Financial Adviser's Management Advice Through a Hollywood Career

 Beverly Hills money manager, who gives a blueprint of how everyone from agency assistants to movie moguls should spend and invest. 



AGENCY ASSISTANT (Don't Go Crazy)
As Mao Tse-tung (and Ari Emanuel) says, "The longest journey begins with the first step." You've pounded the pavement and secured your first job in entertainment. Now you need to pay the rent. Living in Los Angeles on an assistant salary is no easy feat, but you can make it work by controlling costs (meaning lunches at Walter's, not The Grill), minimizing debt (i.e. Vegas trips) and starting good habits like building a 401(k) or IRA with frequent and ongoing contributions. No amount is too small.

ACTOR -- NEW SERIES REGULAR (Create a Safety Net)
 Congratulations, your TV pilot was picked up! When the big check arrives, first pay your quarterly taxes. Then set aside money for expenses such as property taxes, life insurance premiums and a nest egg while this new high-income period exists. Laying the groundwork for long-term financial goals can help a successful entertainer better manage rough periods. There is peace of mind in knowing that even if the cancellation ax falls, you have the "basics" covered. Developing habits predicated on short-term earnings will allow you to better manage your money even as your career skyrockets.

MIDLEVEL EXECUTIVE (Discipline and Dedication)
 You have worked hard to win that promotion at the studio or network, so you should apply that same work ethic to your earnings and investment portfolio. The structure of your business relationship with a network or studio (i.e. "independent contractor" or "employed personnel") should be taken into consideration when thinking about your financial plan. Each status yields different opportunities when contributing to retirement accounts.

For instance, a vp-level exec that climbed the ladder at several studios might have multiple 401(k)s from previous employers creating an opportunity for IRA rollovers, which consolidate funds and promote effective management.

Also, at this point, try to have some fun while glamming up your tax return at the same time. A $10,000 tax credit (federal and California) from an electric car purchase can help justify finally upgrading from a Toyota Prius to a Tesla Model S.


BONA FIDE MOVIE STAR (Create a Team)
 You've made the A-list and are booked solid in leading roles for years to come. Don't feel guilty putting Maybach and Miu Miu on your black Amex, but be sure to balance enjoying the fruits of your labor with prudent positioning of your financials for the long term.

As you acquire wealth, let your attorney help with proper planning. That means making strategic tax decisions to maximize the wealth transfer for your family and children. Talent in Hollywood typically have trusts created in their names, but as they acquire assets, they often forget to have the trust own the property. And if you're indulging in a vintage watch collection or Hermes Birkin bags, consider having them named specifically on an insurance policy. You can consult with your accountant to determine if expenses ever qualify as "business related" and tax deductible.


The point is that while you might consider yourself a starving artist, you now run a thriving business. You need a team of trusted advisers, including estate planning attorneys, business managers, wealth management consultants, accountants and bookkeepers to maximize the dollars.

STUDIO MOGUL (Diversify and Protect)
You give the green light, travel to New York on the company jet and live and die by quarterly earnings. Entertainment professionals who earn seven-figure salaries (plus bonuses of company stock) and participate in long-term incentive programs need specialized attention.

Hollywood's compensation and reward structure quickly can overweight an investment portfolio, making it subject to the volatility of a single investment. All investors should know the cardinal concept of "diversification" because it can help to shield and protect the portfolio in times of vulnerability. Think real estate, too; before complementing your Bird Streets abode with a Malibu cottage, consider Palm Springs or Sun Valley -- reducing the risk of one market's fall.

You'll be solicited for every charitable event west of Pasadena, so consider a gift of highly appreciated stock to a qualifying organization, which may allow you to avoid paying the capital gains tax as you're eligible for the full deduction -- a win for both you and the charity.
Beverly Hills money manager, who gives a blueprint of how everyone from agency assistants to movie moguls should spend and invest. - See more at: http://www.hollywoodreporter.com/news/a-financial-advisers-management-advice-639492#sthash.vtTO54ld.dpuf
Beverly Hills money manager, who gives a blueprint of how everyone from agency assistants to movie moguls should spend and invest. - See more at: http://www.hollywoodreporter.com/news/a-financial-advisers-management-advice-639492#sthash.vtTO54ld.dpuf

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