Protecting Your Cash and Investments in the Entertainment World
If you are an entertainer who is not interested in managing your money, you have probably handed that task to your agent. When that happens, your agent assumes responsibility for doing everything from budgeting to paying bills to managing investment portfolios to giving you a cash allowance.
In return, you need to be assured your agent always is acting with your best interests in mind. It is a trust relationship.
Luckily, there are things you can do to minimize the risks.
Minimize Risk
Understanding exactly what you are asking your agent to do is the most important step you can take to ensure your assets will stay safe. Among other things, this means being sure your agent knows:
Where your income is coming from and how that income is characterized for tax purposes.
What your goals are for your retirement as well as for charitable giving.
What your risk tolerance is when choosing investments.
How each of these elements aligns with your overall financial goals.
Safeguard Your Assets
It is important to recognize that handing the day-to-day responsibility for handling your finances to your agent does not mean you can forget about them. Ultimately, you are the one who will benefit, because well-supervised assets will help you achieve your overall financial goals.
There are steps you can take to safeguard your hard-earned assets, including:
Ensuring your manager has the required level of knowledge and expertise.
Performing background checks on the firms and people handling your accounts.
Regularly monitoring the activity in your accounts and on your charge cards.
Requiring dual authentication for things like check signing.
Becoming familiar with the companies and people any finance-related duties are outsourced to.
Reviewing your investment portfolio to be sure it is tax-efficient and diversified.
Comparing period-over-period balances in each of your accounts.
Understanding the tax consequences of everything you do, whether that is purchasing real estate, entering into a licensing agreement or supporting a charitable organization.
It is never too early — or too late — to review where your finances stand. The risk of having someone else manage your money and investments can be mitigated by putting in place the safeguards outlined in this article.
Contact us for guidance on protecting your investments.