Broke Celebrities: What Can We Learn From Failed Wealth?
July 20, 2009 by Lauren Fairbanks
Being broke is no fun — especially if the circumstances were totally under your control. We’ve all been there at some point in our lives. Spending too much money on a new outfit to wear out and consequently blowing the grocery budget for the month, or eating and drinking out five days a week and having to forgo cell phone access for three weeks. In those subsequent days of eating Ramen and downing tap water, there’s ample time to reflect on poorly made financial decisions.
We suspect that’s what some celebrities are rehashing now, thanks to good old fashioned financial negligence. And since everyone loves a good Riches to Rags story, we’re going to use these celebrities as an example of how NOT to spend your cash.
Who’s broke? Britney Spears
Why are they broke? Ok, she’s not technically broke yet. But it’s going to happen, and in probably the not too distant future. Of her approximate $737,000 monthly income, she reportedly invests or saves none of it. This must be the worst case of living paycheck to paycheck that’s ever been documented. We’re actually surprised that she’s not even able to accidentally save money — what does one spend seven hundred grand on each month?
What can we learn from this? No matter what your salary, never assume that you’ll always be raking in a paycheck. Living month to month is great — if you’re looking to file bankruptcy after even the smallest financial mishap. Socking away even $100 (or in Britney’s case, $100,000) a month can put you in a far more secure position come a financial catastrophe.
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Who’s broke? Latrell Sprewell
Why are they broke? Latrell famously turned down a $21 million dollar contract in 2007 claiming “he had a family to feed”. Apparently the remaining 14.6 million that he earned that season wasn’t sufficient money to cover his Italian yacht and River Hills, WI mansion.
What can we learn from this? Keeping up with the Jones’s (or becoming the Jones’s) is an issue that everyone faces — even celebrities. Making more money doesn’t mean that you should immediately run out to upgrade your digs and increase your shopping budget. Living below their means is something that Americans haven’t been forced to do in a while, so if you’re salary doesn’t support a rock star lifestyle, guess what? You don’t get to have it. Also, if a $21 million payout doesn’t last you a lifetime, you should maybe seek therapy.
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Who’s broke? Rihanna
Why are they broke? After accusing her business manager of stealing from her, Rihanna allegedly has only a mere $20,000 to her name. Her business manager cites her own uninvolvement with her finances and claims that he repeatedly told her that money for tours and videos was coming out of her own pocket.
What can we learn from this? Keep a close eye on your money management. We’re gonna go out on a limb and guess that you don’t have a team of financial advisers taking care of your day to day financials, but that doesn’t mean that you shouldn’t have a strict eye on your finances. Many people who lost their entire retirement funds could chalk a portion of that up to not being as actively involved in managing their investments as they should have been. We’re not recommending doing all the trading yourself, but take an active role. In the least, check out your account balances monthly.
There are many a lesson to be learned from celebrity screw ups, and lucky for us, we have an overabundance to choose from. But take heed from those wealthy elites who have gone before and paved the way to the poor house and learn from their mistakes. No one deserves to be financially desolate, except maybe Latrell Sprewell.
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This is good stuff! Especially the last bit about what we can learn from this. I’m especially happy with the follow up links (how to save 10K in a year!) Thanks Lauren!
@Lashonda – Thanks, lady!
I’m only an extremely minor celebrity, and I, like Britney, am not technically broke – yet. But I gaze upon the boots that I spent $1300 on, wore once, fell down and broke my arm in… and reflect. And live on cereal for a short while as penance.
Yet another great article, Lauren!
Wow – $1,300 for shoes! That’s nuts. I’ve always thought that if I ever reach any sort of celebrity status, I’d still never be able to drop money like that on shoes and clothes. I’m not sure that you can reverse such deeply ingrained cheapness.
To be fair, that was more than twice what I’ve ever paid for shoes before – or since. I was also prone to flights of irresponsible spending before I got even remotely celebrified – now I just have to really focus on finishing up those books. The examples you chose still serve to illustrate how out-of-control ingrained spending habits can get – I wonder if I could do paycheck-to-paycheck on Britney’s scale, and shudder at the thought that I very possibly could.