Luke Danes - Financial Genius!

[TJL]

Hey Gilmore fans, here's an interesting article that appeared in today's NY Daily News. It profiles our favorite diner owner Scott Patterson (Luke) and his plans to retire swimming in loot. Good story, read and discuss...

Hollywood hunk gets money makeover

BY PHYLLIS FURMAN
DAILY NEWS BUSINESS WRITER

It's hard to feel sorry for Scott Patterson, the handsome hunk who plays Lorelai Gilmore's love interest, Luke Danes, on the WB series "Gilmore Girls."
The show, which just finished its sixth year on the air and has been picked up for another season by the new CW network, has made Patterson a self-described multimillionaire.

He drives a $90,000 Mercedes and a $60,000 BMW and lives in a spacious home in Hollywood Hills, purchased in 2003 for $1.27 million.

"Lucy Liu and Clooney live down the street," Patterson told the Daily News.

But a little more than a decade ago, the six-foot-tall actor and ex-baseball player who spent time on a Yankees' minor league club, was broke and living in a 1966 Pontiac Tempest that he bought for $400.

Later on, even as commercial, small TV, and film roles came in - he was Elaine's "sponge-worthy" guy on "Seinfeld" - the money was never big or steady. In 1998 and 1999, the two years before Patterson got his "Gilmore" gig, he earned $23,000 and $33,000.

Acting is an unpredictable business and at age 47, Luke Danes is determined never to be hungry again.

Along with Jeffrey Fishman, a Los Angeles-based financial planner with a big Hollywood clientele, Patterson has scripted a financial plan that will let him sleep at night even after the studios stop calling.

While Fishman is a Hollywood actor, there are lessons to be learned from his story. It's a cautionary tale for anyone who comes into money quickly and is tempted to spend. And the low-risk plan he devised is a good one for anyone who knows that his or her earning years are limited.

"Actors suddenly come into money and there is a temptation to spend. Then suddenly the show is off the air and frequently people aren't prepared," Fishman said. "We want to capitalize on his years of highest earnings to ensure his long term financial security."

But Patterson is no typical celeb who hands off his money to a financial planner and heads for the studio set.

He reads Barron's and The Wall Street Journal and considers fabled Berkshire Hathaway sage Warren Buffett a hero. If his acting career stalled, he would pursue a degree in economics and finance, he said.

In May, when Patterson came to New York for the network "upfronts," to join his "Gilmore" co-stars in a glitzy presentation for advertisers, he made time for a visit with a "top derivatives" guy on Wall Street.

"Money fascinates me," Patterson said. When asked why, he noted his less-than-privileged childhood in Haddonfield, N.J., an affluent suburb in South Jersey. His father left his family when he was 15. His stepfather was a contractor.

"Growing up in that town, you saw the wealth you didn't have," Patterson said. "If I wanted a bike, I had to buy it."

By the time he met Fishman around 2001, Patterson already had his big break in "Gilmore" and was suddenly seeing sizable checks flowing in. He declined to reveal his salary. Actors on a series will typically start out earning $25,000 per episode - a full season is 26 episodes - but those numbers go up as a show gets renewed.

But even with money coming in, Patterson needed help. Flush with cash, he was taking big risks. During the dot-com bust, he lost $25,000 in one day on tech stock eToys.

He said the loss occurred because his broker failed to heed his directions to sell when the stock hit $1.

Patterson lost $5,000 in one night gambling in the Bahamas. Family members and friends were coming out of the woodwork asking for money. Everyone from real estate brokers to Steinway piano salesmen had something to sell him.

He was about to buy a home in Malibu he couldn't afford when Fishman brought him down to earth.

To start, the financial planner urged Patterson to create an emergency fund with about 12 months worth of living expenses. Then they set up a defined benefits pension plan. "We put in the maximum allowable by the IRS," Fishman said. "Very often actors do not have this."

A low-risk investment portfolio, a mix of stocks, bonds and mutual funds came next. Patterson got in and out of Google in two days and reaped a profit of $30,000. He wanted to buy Microsoft but Fishman "kept me away. Thank God he did," Patterson said. The portfolio has grown between 8% to 10% annually.

In 2003, Fishman guided a much-more-financially stable Patterson to buy the Hollywood Hills home. It has since nearly doubled in value.

Looking ahead, they see real estate values declining and are looking to buy distressed commercial and residential property.

Could he still live the good life if "Gilmore Girls" expired? "I'm just about there," he said. "If it went away today, I'd sell the house. I would be okay."

'Gilmore' guy's storyline


Low point: Broke in 1993 and living out of car.

Career break: Gets "Gilmore Girls" in 2000.

Worst stock trade: Loses $25,000 in one day on eToys.

Hot stock trade: Makes $30,000 on Google in two days.

Best nonstock investment: Hollywood Hills house.

Recent luxury purchase: Triple strand of Tiffany pearls, a gift.

Looking to invest in: Real estate; derivatives.