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.
GUEST COLUMN: High Cost of Keeping Stars Safe
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.
STORY: First to Buy Legal Weed
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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