Collateral Damage
A suicide bomber nearly killed filmmaker Jack Baxter. His body is healing now, but his obsession with his film of the event is blocking his financial recovery.
By Stephen Gandel

(MONEY Magazine) – When the bomb finally goes off, 20 minutes into Blues By The Beach, there is no burst of light, no loud explosion, no screaming. There is just an eerie silence, followed by a frenzy of lights, sirens and people running. But while Jack Baxter has seen the footage thousands of times, he can't remember the actual event. Nearly four years ago, he was shooting a documentary set in a Tel Aviv bar, Mike's Place, frequented by both Jews and Muslims. Baxter thought it offered a hopeful view of the Middle East. But on April 30, 2003, as he chatted with a waitress, a suicide bomber approached the bar. The next few moments rewrote Baxter's film and changed his life forever.

The blast threw Baxter across the bar, leaving him on the stage, burned and unconscious. He was lucky. The waitress he'd been talking to had her left arm blown off and bled to death in the arms of the bar's owner. Two members of the band died as well. Baxter's cameraman, who wasn't injured, caught the ambulances arriving and was there three days later, with the camera rolling, when Baxter awoke in a Tel Aviv hospital, paralyzed on his left side and nearly deaf, with no memory of the bombing.

Nearly four years later, Baxter has recovered significantly. Operations to his ears have restored his hearing. He can walk again, sometimes even without a cane. Doctors have not, however, been able to remove all of the so-called organic shrapnel--pieces of the bomber that still remain imbedded in Baxter's skin, creating bumps along his left side from his calf to his shoulder. "I carry this guy around with me," he says.

He also carries with him the financial toll of his injuries. Before the bombing, Baxter, 54, and his wife Fran Strauss-Baxter, 55, a graphic artist, were solidly middle class. Together they earned $90,000 a year and had $70,000 invested for retirement. They didn't own their own home, but the rent on their large two-bedroom apartment in New York City was a mere $1,000 a month (less than most families' mortgages). They went out to dinner regularly and could even afford small luxuries like having a house cleaner.

But a year after the bombing, they were broke. Fran had quit her job to take care of Jack, who could no longer work. Rehabilitation cost money. They ran through their savings and amassed nearly $20,000 in credit-card debt. Jack cashed in his life insurance policy. The couple even had to go on food stamps.

A bombing is enough of a nightmare for any family and, thankfully, is a rare occurrence. But the financial devastation the Baxters faced is familiar to millions of Americans who are unable to work because of disability. "The combination of rising health-care costs and decreasing earning power is tough to overcome," says James Tissot, a New York City financial planner who has a number of disabled clients. Despite federal laws designed to facilitate their employment, just 35% of people with disabilities hold jobs in their prime working years vs. 78% of the general population. Victims of terrorism face an even tougher financial battle. Often with no settlement to compensate them for their injuries, they have no safety net to help them adjust to their new realities.

For Baxter, the fallout from his injury has been magnified by his determination to complete his movie and get it before the public. At first Baxter was excited about the film. It gave him something to recover for. But a few years have passed and the documentary has yet to get a distribution deal, even though Baxter spends most of his time promoting it. He knows that eventually he has to move on to his next project, but he can't bring himself to do it. Meanwhile, the psychological pain and financial cost of the bombing keep building. "It's my Frankenstein," says Baxter in his raspy smoker's voice. "Other people who were at the bar that day have moved on, but the movie makes me relive the blast every day of my life."

FROM THE BRONX TO BOMBING

Movies have always been in Baxter's blood. Growing up in the Bronx he heard stories about the business from his father, a producer who worked on independent films such as Dawn of the Dead. But it wasn't until Baxter was in his late twenties, after landing a job as an assistant on a documentary about the Cannes Film Festival, that he found his true calling. He continued working on documentaries, with a stint in the 1980s as a producer on A Current Affair and other TV news shows. But his documentary work never paid particularly well, so Baxter, a solid six feet, two inches, moonlighted as a security guard to help pay the bills.

Then, in the mid-1990s, a documentary Baxter made about the assassination of Malcolm X drew considerable attention: The Washington Post wrote a lengthy profile of him, film critic Roger Ebert offered high praise, and Baxter was even interviewed on the Today show. But the movie never made any money.

Depressed and $10,000 in debt, Baxter contemplated quitting the business. That was until he met Fran at a hotel pool in Manhattan in 1997. She encouraged him to keep at it, and he followed her advice. They married three years later and talked about one day making a movie together.

Baxter initially traveled to Israel in early 2003 intent on making a documentary about the terrorism trial of Marwan Barghuti, a popular Palestinian leader. But when he got there, he found an Israeli filmmaker already at work on the same subject. So Baxter shifted his sights to a lighter theme: a popular Tel Aviv bar frequented by both Palestinians and Israelis. Baxter hoped to show how the bar brought the two sides together and how people went about living normal lives in the face of increasing violence.

That movie wasn't meant to be either.

REBUILDING A LIFE

Baxter spent the first two weeks after the bombing recuperating in a hospital in Tel Aviv, before returning to the U.S. in early June. He couldn't walk very well or control his left hand, and he could barely hear. He was constantly groggy from the strong painkillers he took for the first seven months. Most of his time was taken up with physical therapy, which he attended four times a week.

The Israeli government agreed to pay most of Jack's medical bills; the rest was covered largely by health insurance he had through the union he'd joined as a security guard. But getting the Israelis to pay wasn't easy. Much of Fran's time in the early days was spent filling out paperwork and faxing it to the Israeli consulate. The rest was taken up shuttling Jack from doctor to doctor. (In all, since the bombing, he's seen 18 doctors, including an orthopedist, a neurologist, an ear specialist and an occupational therapist.)

Over the next 18 months, Jack's physical condition improved, although it was often two steps forward, one step back. But the Baxters' financial condition was quickly deteriorating. With neither of them working, the couple subsisted mainly on Jack's $1,100-a-month disability payments: around $700 in Social Security benefits and the rest from his union coverage and reparations from the Israeli government. The money was barely enough to cover their rent, let alone food, medical co-payments, taxi rides to and from doctors and other expenses. They ran through most of their $70,000 in savings, and Fran started using her credit card to pay their living expenses. Baxter's childhood friends grew worried that the couple might lose their apartment and have no place to live, so they contacted a Jewish charity, which paid the couple's rent for a few months. The Baxters also applied for public assistance. By October 2004, Fran reluctantly decided she could no longer afford to care for Jack full time and would have to go back to work.

Then there was the film, which was rapidly becoming a financial albatross. Jack and Fran considered trying to sell the raw footage but decided in the end to finish the movie themselves. With Jack unable to work, Fran rented editing equipment, hired a full-time editor and flew in the cameraman from Israel to direct. She used credit cards and what was left of their savings to foot the bills. They finished a first version, then made a second, longer version. Jack spent months pitching the film to studios, but no distributors stepped up to buy it.

Fran hit her breaking point in the fall of 2005. Before Jack's injury, the couple would spend their weekends walking around the city. On a beautiful September day, they set out to reinitiate their ritual. But after four blocks, Jack nearly collapsed. With his arm around her shoulder, Fran had to drag Jack back to their apartment and put him into bed. Her back hurt and her shoulders throbbed. She sat down on the living room couch and sobbed quietly: "I thought, 'Oh, my God, is this what the rest of my life is going to be like?'"

A CORNER IS TURNED

The answer, fortunately, turned out to be no. Medically, Jack has continued to make steady progress. He now has regained control of his left arm and can walk without a cane, although it is difficult. A year ago Fran began working 40 hours a week as an independent contractor doing graphic design at a children's book publisher. The couple still owe $17,000 on their credit cards but now have the money to pay more than the minimum.

As for the movie, Jack recently began getting phone calls from organizers of Jewish film festivals, asking if they could include Blues By The Beach in their programs. The festivals pay anywhere from $500 to $1,250 a showing, depending on whether Jack shows up to talk. He has done four viewings already and has three more booked. His agent also reports that three distributors have recently expressed interest in the film. But the talks are in the early stages, at best, and at least one says that Baxter would have to raise an additional $150,000 to upgrade and promote the movie before it could be released in theaters.

Fran says both she and Jack agree that he should spend another three months, maximum, on the film and then move on. She believes he could find a job editing or doing voice-overs, both talents he gained from working on documentary films. Jack, though, says he has no real time frame for giving up work on the film. He has come to believe that raising awareness of the plight of terrorism victims is what he was meant to do. Says Jack: "What keeps me going, what heals me, is the reaction I get from kids and people who see this movie. It really affects them."

The Advice

To help the Baxters figure out how to rebuild their financial lives, planners Mark Brown of Denver, who has worked with a number of filmmakers, and James Tissot of New York City, who's had many disabled clients, offer these suggestions:

• TREAT IT LIKE A BUSINESS Brown says Baxter needs to stop believing that the movie will land investors or a distribution deal on its merits alone. "Investors want to see that you are treating the movie like a business, not a hobby," the planner says. Brown recommends that Baxter draw up a business plan that lays out the details of how he is going to promote the movie and that includes sales targets as well as an estimate of how long it will take to turn a profit. For advice on writing business plans, Baxter can go to sba.gov, which has a quick tutorial on getting started, or get free individualized counseling from Score.org, staffed mostly by retired business executives and entrepreneurs.

• SET A DEADLINE Brown says the couple should agree on a timetable for how much longer Jack will try to make a profit from the film--six months, he believes, is a reasonable compromise. As the Baxters approach this deadline, Brown urges them to abandon the idea of a wide release of the film and instead target a Jewish audience by marketing DVDs to synagogues and religious schools across the country. Says Brown: "Go after the people who are most likely to want to see your movie."

• ATTACK THE CREDIT-CARD DEBT The Baxters leave the money they make from showing the movie in a bank account, planning to put the balance toward the expenses of a wide theatrical release later on. Bad idea, says Tissot, who urges them to use the $3,000 in the account to help pay down the $17,000 that they owe on their credit cards. He also suggests that they put part of any future revenue from the movie toward debt repayment as well. The rest, Tissot says, should be used to cover the $300 monthly expenses of marketing the movie, which the Baxters now pay out of their own pocket.

• START SAVING AGAIN As soon as the Baxters pay off their credit cards, they should start building up their savings, the planners say. First priority: an emergency fund, equal to at least three months of their living expenses, which can be deposited in an online savings account or money-market fund. After that the Baxters should focus on saving for retirement, opening SEP-IRAs for both Jack and Fran. Since Jack's disability payments already give them some guaranteed income, they can afford to invest a little more aggressively than most people their age and put all of their savings into stocks, says Brown. He recommends a broad market index such as the Vanguard Total Stock Market fund.

• GO BACK TO WORK Tissot urges Jack to get back to paid work as quickly as he can. He suggests that Baxter contact Vesid, a New York City group that retrains disabled people for new careers. Tissot suggests Baxter look for work in the movie business, perhaps at a studio. Until now Baxter has been reluctant to look for a job because he is afraid of losing his disability payments if a new career doesn't work out. But Tissot says that, based on the law and the terms of his union contract, Baxter will be entitled to his disability payments for a year after he lands a new job. If he ends up leaving the job within nine months, his payments will continue indefinitely.

Even if the film never turns out to be the financial success they're hoping for, Fran and Jack believe that the time and money they spent on it was worthwhile. And things are looking up: At a recent film festival in New York City, Blues By The Beach won the award for best documentary. In an auditorium with more than 300 people, Jack rose to applause and, leaning on his cane, made his way slowly to the front of the room and up the stage steps. "For those of you who don't know what this film is about, it is about a bar," Baxter said. "And I can tell you at this bar the beers are still cold, the music is still loud and the girls are still beautiful."

Mike's Place, in other words, has fully recovered. Baxter hopes to soon be able to say the same thing about himself.

THE BOTTOM LINE

Jack Baxter has made good progress in recovering from his physical injuries. Now he and his wife Fran are trying to mend their finances.

IT COULD HAPPEN TO YOU

Maybe not a suicide bombing. But the odds are one in five that an illness or injury will keep you from working at some point in your career. Disability insurance can limit the financial pain. Some tips for buyers:

KNOW YOUR COVERAGE

Don't count on government programs. Social Security pays disability benefits only if you can't work at any job (not just your chosen field). Workers' comp is for those injured on the job. If you don't have a private disability policy at work or if it doesn't cover 60% to 70% of your salary or lacks other key features (read on), you'll need to shop for an individual policy.

FOCUS ON KEY FEATURES

"Own occupation" coverage, which kicks in when you can't do your usual job (as opposed to not being able to work at all), is pricey but worth it. Also good, if you can afford it: payments that will last to age 65 vs. a shorter period (say, one to five years). Waiting periods before coverage starts range from 30 to 120 days; 90 days is the most cost effective.

SHOP AROUND

A healthy man, 45, might pay $200 a month for a modified own-occupation policy that kicks in after 90 days and gives monthly benefits of $5,000 to age 65. ("Modified" because payments end when you land a new job, even if it's not in your field.) Get quotes from at least three insurers. To cut the price, consider a longer waiting period or shorter coverage.

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.