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WALL STREET, CALIFORNIA | MONEY PROFILE / HELAINE OLEN

Acting in Her Own Interests

Unlike many in show biz, Joanna Kerns prefers to oversee her finances herself.

May 06, 1997|HELAINE OLEN

Television actress Joanna Kerns often finds herself portraying women who face adversity and manage to triumph.

But that's also a story line she's lived out in her financial life.

Kerns, who portrayed wife and mother Maggie Seaver on the hit sitcom "Growing Pains" from 1985 to 1992, says she was dead broke a few years into the show's run.

"Every hiatus I was living on a line of credit even though I was making close to $25,000 a week," she says.

Where was it all going? "I had a [career] manager taking 15% [of her earnings], an agent for 10%, a business manager for 5% and a publicist charging somewhere in the neighborhood of $2,500 a month," Kerns says of that time. "I wasn't able to save anything. And I never saw the money."

"I was living like a much bigger star than I was," Kerns adds.

Surprised? It's actually a fairly common Hollywood story, says one of Kerns' current financial advisors, Kenneth Malamed, president and chief investment officer of Financial Management Advisors in Beverly Hills.

"Most of our show business clients use intermediaries," Malamed says. "One of my oldest clients is in show biz. If I saw him on the street, he'd wave and greet me; but if I asked him how his portfolio is doing, he would say to speak with his business manager."

Today, the fortysomething actress is proud to say that she oversees her finances herself, consulting frequently with a stockbroker, bond fund manager and bookkeeper, among others.

"Lots of women are so intimidated by what they don't know that they don't ask questions," the actress observes. "I just keep asking questions, and I ask again if I don't like the answers."

Kerns took her first steps toward financial independence in the late 1980s when, frightened by her financial ignorance, she enrolled in a $250 class called "Financial Management for Women." Her life hasn't been the same.

Kerns began asking questions--lots of questions--of her business and management people. Not liking the answers, she began to let people go.

It wasn't an easy process. Her former personal manager, Arlene Dayton, sued Kerns, claiming she was owed more than $400,000 in unpaid commissions. The women eventually reached an out-of-court settlement, and, as part of the terms of the agreement, neither is allowed to discuss the matter.

Kerns, who lives in Brentwood, did not want to discuss her current income or net worth, but she did agree to share some of her investment strategies and choices.

She calls herself a cautious, conservative investor, something she attributes to her solidly middle-class background.

Kerns grew up in the Santa Clara Valley in Northern California as one of four siblings (her sister is noted swimmer and sports commentator Donna de Varona). Both of her parents worked, and money was almost always tight.

"I think I'm like a thin person who will always feel fat. Since money was always an issue when I was growing up, I always feel like there's not enough."

Actually, that is a helpful attitude for someone in a career in which income can fluctuate from year to year. Kerns likes bonds--particularly the tax-exempt variety--and is invested in several stock and bond funds in the no-load Vanguard fund family, including Wellesley Income (five-year average annual return: 11.8%) and Windsor, a growth-and-income fund (five-year average annual return: 18.2%). She also has investments through Financial Management Advisors, a firm specializing in fixed-income investments. She isn't a big trader and considers herself an investor with a long-term time frame.

"I don't move things around," she says. Her investments "stay where they are."

According to Jan Greer, a managing director of Lehman Bros. Inc. in New York, investment strategies that place a high value on predictability are a good idea for many in the entertainment community. Employment is unpredictable in Hollywood, and a stable portfolio means there will be something to count on when work is scarce.

"Joanna is subject to [career] volatility like everyone else in show business," Greer observes. "It's a given that anyone whose needs might be variable in any given year needs to establish liquidity and reasonable amount of stability."

Nonetheless, Kerns occasionally takes risks. She bought stock in Starbucks Corp. at $22 a share shortly after she discovered the coffee emporium in 1991 while shooting a film in Vancouver, Canada. The stock has split twice since her purchase. It closed at $29.875 in Nasdaq trading Monday, down 12.5 cents.

"I would walk up and have an iced latte at Starbucks, and I thought, 'This place is going to go gangbusters.' It was clean, it was efficient, I loved the taste of the coffee and the way I felt when I went there."

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