Rose Greene talks with Joe Mont of The Street about the individuals behind Hollywood’s cameras and the often unsteady work they experience. Read the full article below.

HOLLYWOOD, Calif. (TheStreet) — Hollywood is a land of dreams, celebrities and glamour. 

But behind the cameras and outside the trailers, thousands of Tinseltown’s lesser-known figures toil. There are assistant directors, electricians, hairdressers and extras, all of whom make the stars shine

Behind the cameras and outside the trailers of Hollywood are workers who, working with the stars but without their massive paychecks, get into some rare financial problems.

But unlike celebrities, these workers don’t pull in the massive paychecks ensured by boffo box office. The money isn’t necessarily meager, but the work is unsteady.

“People think that these folks make a lot of money — and if they were working 12 months of the year, that would be an accurate statement,” says Rose Greene, a financial adviser based in Santa Monica, Calif. “But now, it is about getting one or two jobs that last eight to 12 weeks, followed by six months of nothing.”

Many of Greene’s clients come to her for advice on how to best manage erratic finances, meet expenses and still provide for their retirement. Their predicament is all too familiar to the scores of U.S. workers who are freelancers or face seasonal employment — except that here you worry about money while fixing Natalie Portman’s makeup or tailoring George Clooney’s wardrobe.

She says her Hollywood clients typically fall into two camps.

One group is fully aware of the threat posed by the variability of their income stream and carry a real anxiety.

“Their radar is up, and when they get a gig and bring in some money, they slam it away and they put it into cash,” Greene says. “It is very hard to get them to move out of low-risk, low-return investments because they are always thinking that they are going to need that money when their jobs dry up. At least when they hit a dry spell they’ve got that stash that they work off of. They may be stressed about it, but they are not necessarily worried about their next mortgage payment.”

The other half “live in the moment and don’t really want to think too far in the future,” Greene says. “They do throw a little in the pot when they have a fairly consistent job, but when that dries up they just suck up everything they had put away. They just empty the tanks.” This group is particularly vulnerable to buying into the perceived Hollywood lifestyle. Sitting on set for 10 to 12 hours a day, dealing with talent than earns upward of $1 million per TV episode, can give them an unrealistic view of money.

“In their minds they should be living that fantasy life,” Greene says.

Developing a proper financial plan is a distinct challenge for both groups.

“I don’t think people really appreciate the insecurity and how difficult it is to manage cash flow,” Greene says. “They really don’t have any idea just exactly when that next job is going to come up. They don’t know whether to save for three months, six months or a year. It is really nice to map out a strategy on paper, but applying it to real-time situations is much more of a challenge.”

Most of Hollywood’s behind-the-scenes workers belong to various guilds and unions, which should supply pensions after retirement or disability. Some workers are lulled into thinking these stipends will be enough to live off, but the pensions “are not good ones,” Greene says. “As a result, they are not doing what they need to be doing to build up some other bucket of retirement money.”

Getting this unique segment of the work force to make the right financial moves can take a bit of psychology. For the risk averse with some amount of savings to invest, Greene persuades them to start moving small amounts at a time out of CDs and money market funds and into instruments that offer higher returns but are still relatively conservative. This gradually allows them to realize better returns and accept that “stepping out of the bank doesn’t mean walking into the casino.”

Her other advice is applicable to anyone whose income stream is unpredictable.

“Focus on building up an emergency reserve in a cash or money market position,” she advises. “If I can get them to accomplish that, it is a huge step. Then they will have a bucket that they can look to to tide them over between jobs.

She also advises building out an IRA or Roth IRA.

“People do hold off tapping their IRA money unless they really don’t have any other option,” she says. An IRA makes more sense, because of this, than a regular investment account where pulling out your investments is both easier and ill-advised, given a buy-and-hold strategy.

– Written by Joe Mont in Boston.

What effect could the results have on stocks and taxes?

Provided by Rose Greene

GOP picks up 60 seats in the House, 6 in the Senate. The 2010 midterm elections are over and frustration has prompted change on Capitol Hill. Republicans will control the House with at least 239 seats; Democrats will retain a narrow majority in the Senate with at least 51 seats.₁

Here comes gridlock. “We’re determined to stop the agenda Americans have rejected and to turn the ship around,” Senate Minority Leader Mitch McConnell (R-KY) told the press after the election.₂ So will President Obama’s health care reforms be rolled back? Will federal spending be severely reduced?

Through 2012, you may not see much change at all. With Republicans controlling the House, Democrats controlling the Senate and President Obama’s veto pen at the ready, you can expect plenty of legislative stalemates.

Could gridlock benefit the markets? It could be bullish for stocks. With a conservative majority in the House, Wall Street could breathe a collective sigh of relief over the next two years, feeling less regulatory pressure and seeing fewer threats and a more business-friendly environment.

On the other hand, history suggests otherwise. Standard & Poor’s database reveals that since 1900, the S&P 500 has gained an average of just 2.0% in years featuring a split Congress. Since World War II, the average gain in such circumstances has been 3.5%.₃ Here’s hoping past performance is no indicator of future results.

What can the lame-duck Congress accomplish? Republicans don’t become the majority party in the House until January … so what will happen with the Bush-era tax cuts and the estate tax?

A compromise could be in the works on the estate tax. Neither party wants to see estate taxes reset to 2001 levels. With death taxes poised to top out at 55% next year, both parties may emerge from the limbo of 2010 and reach a consensus. A CNN report suggests the maximum estate tax rate will be set somewhere between 35-45% for 2011, with the federal exemption ranging anywhere from $3.5-$5 million.₄ 

Both parties want to preserve the Bush-era income tax cuts. Analysts now think Congress may act to extend the EGTRRA/JGTRRA tax cuts through at least 2011.₄ Will they be extended for all Americans, as Republicans want? Or just to households with incomes of less than $250,000, as Democrats want?

Two (lame duck) Democrats have proposed extending these tax cuts for all but the really rich. Senate Banking Chairman Chris Dodd (D-CT) would like them extended for households making less than $500,000; Sen. Blanche Lincoln (D-NE) has proposed setting the break at $1 million. In September, 31 House Democrats wrote a letter to their party’s leaders urging the extension of the cuts for all Americans.₅ 

Other matters to tackle. Currently, the unemployed can qualify for up to 99 weeks of federal unemployment benefits. The Tier V unemployment extension is set to expire at the start of December, and if it does, about 2 million Americans will lose that cushion. Additionally, the Medicare reimbursement rate for doctors will be reduced by 21% if Congress doesn’t apply its usual annual “doc fix” by the end of November, and the Alternative Minimum Tax needs its annual patch.₄

It is possible that one broad year-end tax bill could address all of the above issues.  

What if the economy needs another stimulus? Given the mid-term election results, it is pretty clear that Federal Reserve will have to “ride to the rescue” instead of Congress. The GOP wants to block any new spending that adds to the federal deficit, so any initiative President Obama might propose to pump up the housing market or job market will likely be small-scale. It is hard to imagine another federal stimulus package making it through Congress between now and 2012, though a tax-cutting move might stand a chance.

Obama appeals to the business world. One last item of interest: in the wake of the “shellacking” his party took this week, President Obama spoke of mending fences with America’s business community. He now says he wants to undo Section 9006 of the health care reform law – the section that would require all businesses to issue 1099 tax forms notifying the IRS of purchases exceeding $600 starting in 2012.₆

Rose Greene may be reached at http://www.rosegreene.com, (310)399-1200 or rose@rosegreene.com.

This material was prepared by Peter Montoya Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information should not be construed as investment, tax or legal advice. The publisher is not engaged in rendering legal, accounting or other professional services. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. If assistance or further information is needed, the reader is advised to engage the services of a competent professional. petermontoya.com, montoyaregistry.com, marketinglibrary.com.

Citations
1 – latimes.com/news/politics/election/la-election-results-map,0,4890426.htmlstory [11/3/10]
2 – marketwatch.com/story/republicans-to-challenge-obama-after-victory-2010-11-03 [11/3/10]
3 – marketwatch.com/story/gridlock-is-no-good-for-stocks-2010-11-02 [11/2/10]
4 – money.cnn.com/2010/11/01/news/economy/lameduck_agenda/ [11/1/10]
5 – money.cnn.com/2010/10/13/news/economy/bush_tax_cuts_possible_compromise/index.htm [10/13/10]
6 – money.cnn.com/2010/11/03/news/economy/Obama_business/index.htm [11/3/10]

How effectively could it address America’s unemployment rate?

provided by Los Angeles Financial Planner, Rose Greene, CFP®

How about a tax break for companies that hire? A new jobs bill introduced by Sen. Majority Leader Harry Reid (D-NV) proposes major tax incentives for hiring businesses. If the bill becomes law, will these incentives make a dent in the unemployment rate? Or will they matter little? Not everyone is optimistic.

On February 24, the $15 billion job creation measure passed 70-28 in the Senate and headed for the House of Representatives.₁ Just what is in this Senate bill?

The big perk: the “Hire Now” tax cut. If the bill becomes law, a business that hires someone who has worked less than 40 hours in the previous 60 days could skip paying its share of the new hire’s Social Security tax for the rest of 2010. That’s 6.25% of the employee’s salary. Companies could realize a payroll tax savings of up to $6,622 per new hire. (In case you are wondering, the federal government would reimburse the SSA for the lost taxes.) _2,3,4

If the new employee lasted 52 weeks on the job, the business would get a $1,000 tax credit on its 2011 federal return.₃

In Need Of Repair

The other perks. The Section 179 deduction limit for small business capital purchases was raised to $250,000 for 2009, and this bill would keep the limit at $250,000 for the 2010 tax year. The “Build America” bond program would be extended and expanded – that’s the program created to help state and local governments raise funds for infrastructure projects. The current federal subsidy for state highway spending would also be extended._1,2

The fine print. Any private-sector employer, any non-profit organization and any public-sector college or university would qualify for the “Hire Now” tax break. While a business that owes no tax could not get the $1,000 new-hire tax credit for 2011, it would be allowed to carry that credit forward to the future. There would be no limit on the amount of new employees a business could hire en route to claiming the credit.₈

Is this really going to make a difference? Well, Sen. Reid believes that the bill could create and save as many as 1 million jobs. Analysts feel that may be stretching it. Economic Policy Institute economist Heidi Shierholz thinks the measure could result in “tens of thousands of jobs, but it is absolutely nowhere near big enough” to reduce the unemployment rate.₃

Under the bill, a “new” hire does not have to be an additional employee. It can also be a worker replacing someone who quit or was fired.₃ So service sector businesses with high turnover might get some major tax breaks. There might be a lot of hiring among such companies, but not a lot of net job creation.

Is another bill just ahead? According to The Atlantic, Sen. Reid plans to introduce a second jobs bill with much greater scope. This proposed (and almost certainly more expensive) legislation would extend jobless benefits and COBRA for millions, as well as numerous tax credits and programs scheduled to sunset. State Medicaid funding would be extended and Medicare physician payments.

would be updated through this bill as well. While The Atlantic says it has copies of the bill, Sen. Reid’s office has not yet confirmed its contents. The Senator has mentioned rolling out multiple bills in the next few weeks to address the country’s unemployment problem.₅

Rose Greene is a Representative with Rose Greene Financial and may be reached at http://www.rosegreene.com, (310)399-1200 or rose@rosegreene.com

This material was prepared by Peter Montoya Inc., not the named Representative nor Broker/Dealer, and should not be construed as investment advice. Neither the named Representative nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information.

Citations.
1 marketwatch.com/story/senate-sends-15-billion-jobs-bill-to-house-2010-02-24 [2/24/10]
4 boston.com/business/personalfinance/managingyourmoney/archives/2010/02/tax_incentives.html [2/24/10]
2 sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/02/24/BU3H1C6M8V.DTL [2/24/10]
4 online.wsj.com/article/SB20001424052748704240004575085410014175900.html [2/24/10]
5 politics.theatlantic.com/2010/02/the_next_jobs_bill.php [10/25/10]

Events and data in recent weeks have prompted market participants to view the tailwinds that caused the markets to go sailing higher for much of 2009 as beginning to fade. They now view them as having become more balanced with the rising headwinds associated with increasing global frictions.

We continue to expect the powerful economic and profit growth to weaken in the second half of 2010. The weakening is likely to result from the fading of the extraordinary global policy efforts that created a tailwind for growth and the rise of new headwinds as some actions are reversed. The early stage of this transition is already underway leading to heightened market volatility. While there is still plenty of good news acting as tailwinds for the markets, there is increasingly more of a balance with the bad news, or headwinds. The winds of change blowing in the markets include the following:

Tailwinds

1. -The Federal Reserve (the Fed) is our friend (for now)
2. -U.S. Gross Domestic Product (GDP) growth is above average
3. -S&P 500 earnings growth is strong
4. -Credit and housing markets continue to heal
5. -China’s double-digit GDP growth (but slowing loan growth)
6. -Steep yield curve
7. -Massive global fiscal stimulus in the pipeline

Headwinds
-No job growth (yet)
-Federal, state and local budgets are awful
-Anti-business tone in Washington
-Commercial real estate woes remain
-China and India inflation risks
-European debt problems exacerbated by weak economies
-Bank lending is weak

These are not in any particular order since the importance placed on them by the market varies from day to day. Some of them will switch from being tailwinds to headwinds this year, like the actions of the Federal Reserve, while others may switch from being headwinds to tailwinds such as job

Want more details?  Click here to explore each of the winds that are currently driving the choppy market environment.

LPL Financial Research Weekly Market Commentary

Joblessness at 10.0%. This November figure is improved from October’s 10.2% mark. Another bright spot: payrolls slimmed by just 11,000 jobs last month.  (Analysts expected a reduction of around 125,000.)  Are we on the verge of  adding jobs to the economy?  The number of employed people rose by 227,000  last month, the first increase since April.1

Read here for the rest of this week’s economic update:

http://tinyurl.com/yhtom32