7 Rich Celebrities Who Went Broke
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Have you ever looked at a magazine cover photo of a rich and famous person who makes millions per year and wondered what in the world they do with all that money? I have. I’ve also dreamed about what I would do if I had millions of dollars. (Ahem, pay off student loans.)
But the fact of the matter is that even the obscenely rich among us aren’t immune from financial problems. In some cases, they are more likely to have financial problems than those who make an average American income.
Harvey Warren, author of Drop Debt, Surviving Credit Card Hell Without Bankruptcy says, "a person with $250,000 worth of income and $250,000 worth of credit card debt is just as broke as a person with $40,000 worth of income and $40,000 worth of credit card debt."
"Easy come, easy go. Young people who never had to earn money don't appreciate the risk, sacrifice and tenacity that it represents," says Paula Pant, founder of AffordAnything.com.
An interesting New York Times article with former-boxer-turned-chef George Foreman, who very nearly went bankrupt in the 1980s after squandering millions of dollars, highlights this very problem. Mr. Foreman says that lots of wealthy people never grow up, so they spend themselves into huge debts while living a party life. The article notes that those who are least likely to spend themselves out of millions or billions are those who worked hard for their money, rather than inheriting it or earning it in a whirlwind of instant success.
"The trend to live lavishly happens when you want to be NOTICED by the world, there’s a cost associated with being adored by the media and that cost rises as others new celebrities enter the game. It’s becoming more of a trend for athletes than movie stars and lottery winners to go broke than ever before," says Xavier Epps, financial adviser at XNE Financial.
This is shown to be true by the many Hollywood stars who have gone broke over the years, despite living extravagant lifestyles funded by a seemingly endless pile of money. "The rich are often better at making money than managing their money," says Pablo Solomon, Artist & Designer.
Here are just seven rich celebrities who went broke:
What can you learn?
There’s plenty to learn from the list of celebrities who, at one time, made more money in a year than many of us will see over our lifetimes. For one thing, it’s always tempting to live beyond your means, and everyday people do it just as much – if not more than – celebrities. "Sadly, we have created a society where what people HAVE seems more important than who they ARE," says Ilene Davis, CFP and designer of the Not Just for Retirement Calculator.
"What we can learn from the rich and famous today, is that lavish lifestyles can be short-lived if current earnings aren’t managed perpetually over their expected lifespan," shares Epps.
Even though you might only be talking about a few thousand dollars worth of debt, rather than a few million, it’s easy to let everyday expenses and luxury spending spiral out of control, ending in bankruptcy or other financial crises. So when you look at celebrities who once had it all, remember that financial issues can happen to anyone who doesn’t properly manage his or her money, and that good money management skills will go far to protect you from future financial problems.
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