• Family Life

Bank Error In Your Favor And Tales of Hollywood

February 16, 2015 | David Douglass

Not long after I graduated from college I wound up in Los Angeles looking for a job in the film business. After sleeping on my friend’s couch for a few weeks, I found a single furnished room in otherwise empty house on Motor Avenue between Century City and Culver City. The house was used once a week as a Samoan body alignment therapy studio.

This was a long time ago — 1981 (my wife says, “you must have been amazed when they introduced ‘the Talkies’”). My rent was $150 a month and I had just hooked up with a TV commercial company doing freelance Production Assistant work – making about $150 a week. I was excited — I had “made it” – and now I had the possibility of a little extra money in my pocket at the end of the week.

As for my finances – I had a little money saved up, so I closed my college checking account back East and opened an account at a local bank. In those days, you had to have a local bank to pay my rent and make deposits in person.

In addition to checks, I was issued a debit card which was still somewhat of a novelty (Wells Fargo didn’t issue debit cards until 1990) and could only be used at an ATM, not at retail locations. I always made sure I had cash on me as I didn’t want to rack up credit card costs (however, unbeknownst to me that would come later).

There was no Internet, certainly no Personal Financial Dashboard, so I didn’t have an at-a-glance view of my income and spending. I couldn’t see all my accounts in one place, and didn’t track and manage my cash flow.

If I had managed what little money I had it would have been on paper – a check diary and mailed monthly statements from the bank, brokerage and credit card company. I didn’t have a brokerage account at the time. Even with my new checking account, I wasn’t really tracking my spending; certainly I never balanced my checkbook. I mainly lived on the cash in my wallet.

The one big downside to my living situation was that every Wednesday I had to leave my furnished room while former starlets and Hollywood matrons had their backs walked on by large barefoot women wearing lab coats. This was the body alignment therapy.

The other downside was that unbeknownst to me, and the studio’s clients, was that one of the therapists was stealing money from wallets and purses in the house. What was ingenious about the theft was that she never took all the cash in a wallet. If say there was $35 dollars – a twenty, a ten and 5 ones – she might take the ten or some of the ones.

I was always short of money then– but because I didn’t track my cash I would just blame myself – bad memory, must have spent it on something. And it reinforced my not undeserved reputation as “bad with money.” It wasn’t until the thief was caught – many months later — that I understood I had been ripped off. This ripped off feeling is one I would experience many years later.

So, lesson learned, right? Unfortunately, no.

I did get ahead in the film industry, moving on to a talent agency and then quitting that position to become a full-time screenwriter. Still, money issues plagued me. I would lay awake at night thinking about what success would be like — a produced screenplay, a house in Beverly Hills, but often, I was more worried what my next job would be, and how I was going to pay the rent. What I didn’t do was pay attention to my finances. One day a friend asked me if I would be happy being an employed, but unproduced screenwriter for the rest of my life. I wasn’t. I packed up my apartment and moved back East.

Leaving Hollywood Behind

What could I do that was still creative but offered some stability? I networked with friends and began to get work as a marketing copywriter. After about a year I moved into the first of many management positions — a series of great jobs in marketing, paying well enough that someone single, like me, should have been able to pay rent, live well, and save money.

But I still hadn’t learned my lessons even with more money, I had less inhibitions about spending. And this was what was keeping me up at night then.

Bank Error In Your Favor
My spending did become a crisis. I didn’t have a clear picture of what I had. What was coming in? What was I spending? And what was I spending it on? Amazingly, regular monthly bills – like the telephone — would surprise me. I somehow hadn’t planned on them (or secretly hoped that there would be a “bank error in my favor”).

Almost all of every paycheck was going to service debt.

Investments? They could wait – or maybe I would raid what little I had put away.

Slowly, I started to take control of my finances — paying off credit cards, monitoring my spending, leveraging retirement plans at work – but it wasn’t until I moved to San Francisco and met my wife, that she got my finances truly in order.

A business major in college, my wife has always been a disciplined saver and investor. When we met, she owned a condo in Mountain View, CA. I had never owned anything except my car before we were married. I moved into the condo and my wife had me put what I would have paid in rent into our savings account.

She had a plan.

Within two years we had put away enough for a down payment on a single-family home in Mountain View. I wasn’t really aware of this until the day my wife said to me, “Let’s go look for a house.” We bought within a month and stayed in Mountain View for five more years before we sold and moved East with my job.

And while we were able to buy, my wife made sure we were also continuing to save. Both of us worked for companies with 401(k) programs, and we contributed the maximum each year. We put away additional money from a real estate sale, pay off our credit cards monthly and when we purchase a car – twice in 18 years – pay cash.

When I started my marketing consulting career last year I opened a Personal Capital account and linked all of my wife’s and my financial accounts on the dashboard. As we prepared for retirement, we wanted to be able to see all of our accounts in one place, manage our cash flow and really understand what we had and where it was going.

Hollywood Flashback

This summer I put my retirement plan through the 401k Fee Analyzer. Even though I had gotten my financial act together years ago, I had an eerie Hollywood flashback.

It felt creepy — like someone was walking on my back. But I wasn’t missing $5 or $10 from my wallet with no explanation. Instead, what the 401k Fee Analyzer showed me was that Mutual Funds were stealing more than 4 years of my retirement plan savings through high 401K and Mutual Fund fees.

This time it didn’t take me months to realize what was happening, and I didn’t blame myself for what happened. And I was able to take action to correct the situation.

It’s been a long road for me from Hollywood to today. I’ve learned my lessons on money management. The most important thing I know is that you can’t manage what you don’t know and keep your house in order. Because I have more financial discipline now and with help from the Personal Capital software I am more in control and less prone to the nightmares that you hope only Hollywood can create.

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Photo Credit: Alexis Fam

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