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Director needs to change her financial script

November 29, 2009|By Ann Marsh
  • Single mother Jodi Binstock, shown with her 10-year-old daughter Logan, juggles several freelance entertainment jobs.
Single mother Jodi Binstock, shown with her 10-year-old daughter Logan,… (Ann Johansson / Los Angeles…)

Jodi Binstock has the long resume of a steadily employed Hollywood creative type: She has directed movies and plays, put in stints working for TV networks and had her share of fallow periods.

Her income has gone up and down. And as the single mother of a 10-year-old, she's chosen frequently in recent years to bypass some well-paying but demanding gigs in favor of work that lets her get home by dinnertime. A decade of that, however, has left Binstock, 50, in a financial bind.

Money Makeover: An article in Sunday's Business section that featured a financial makeover of Jodi Binstock identified her as the director of the online series "Web Therapy." Her title is producer. —

She juggles several freelance entertainment jobs, including serving as a graphics producer for the E and Style networks and producer of "Web Therapy," an online series starring Lisa Kudrow. She typically earns $60,000 to $80,000 over the course of a year.

But her monthly expenses exceed her income by more than $2,000. She carries $45,700 in credit card debt. There's no equity left in her small Los Angeles home. And to keep payments low on her $454,000 mortgage and $71,000 home equity line of credit, Binstock is paying mostly interest and not reducing the principal balances. She has about $2,500 in emergency savings and $68,000 set aside for retirement. Her pension from the Directors Guild of America will be less than $200 a year.

"I see a total disaster 10 years from now," said fee-only financial planner Sandra Field, founder of Asset Planning Inc. in Cypress. "The question is, does she really want to be a burden to her daughter? Because she might be. This is a crossroads for her."

The crossroads is a significant one, and goes beyond Binstock's balance sheet. Her fiance died in September from complications of a brain tumor, and her mother was diagnosed with lung cancer at the beginning of this year.

Binstock displays a mix of financial savvy and head-in-the-sand emotional avoidance. She has made a select number of smart planning decisions, including talking thoroughly and openly about her mother's finances and estate planning.

But the burden of being the sole provider for her daughter, Logan, whom she had on her own, may have led Binstock to neglect her own needs now and in her retirement. Despite having a resume with strong work experience in many corners of the entertainment industry, she insists she won't go back to working long hours if it means being away from Logan.

But Binstock needs to focus on her future, Field said. In particular, she should seek higher-paying work -- even if it requires longer hours or frequent trips out of town. Binstock made as much as $120,000 in the years that she was working more intensely, and she is in enough trouble now that she needs to try to increase her income again, the planner said.

If Binstock cannot make more money, she may need to consider filing for bankruptcy or selling her modest house and renting a home, Field said.

The planner, a single mother herself, urged Binstock to talk things through with Logan. "Ten-year-olds are pretty astute," Field said. Even if Binstock is away for long hours, the additional income, after child care, "is going to improve things for both of them."

Before meeting with Field, Binstock had been brainstorming ways to create "passive" income -- reliable monthly checks from a strategic investment that does not require long work hours. She told Field she was considering buying a dog-walking business for $100,000 or two supermarket kiosks for about $35,000 each. The kiosks sell and rent DVDs and video games. She hopes to finance either purchase with a Small Business Administration loan.

Field, however, said she doubted that Binstock could obtain an SBA loan while carrying so much debt. That aside, Field noticed irregularities in the accounting paperwork for the dog-walking business and rejected it out of hand. She urged Binstock to investigate the DVD kiosk business thoroughly. With maintenance to buy and stock the DVDs and the fact that the machines must be fixed quickly when they jam, Field said she suspected that the income they generated might not be so passive after all.

Even if the DVD kiosks were a good investment, the planner said, Binstock simply doesn't have the money to make payments on an SBA loan. She's not covering her expenses as it is. For example, Field pointed to Binstock's upcoming property tax bill of $3,588. "I don't see where money is going to come from" to pay it, Field said.

Instead, the planner urged Binstock to focus her energies exclusively where she has had success before: in her own field.

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