We love celebrity culture. The clothes. The romances. The plastic surgery. The money.
Yes, they often have gobs of cash – but when huge pay days clash with even bigger lifestyles and personalities, serious financial blunders can ensue. Here are some lessons learned from celebrity money mistakes.
Keep Your Will Updated
Actor Heath Ledger was riding high on his success from Brokeback Mountain when he died suddenly of an overdose. He was worth about $20 million, but his will was outdated and neglected to mention the birth of his daughter. Sorting out his assets was controversial and in the end his family decided to leave most of it to young Matilda.
Protect Your Heart And Your Bank Account
While Madonna might be one of the most financially savvy businesspeople in pop culture, she dropped the ball when she married Guy Ritchie without a prenup. When they broke up in 2008 (who saw that coming???), she had to fork over an estimated $75 million as a divorce settlement.
Keep The Books Straight
Mixing up personal and business expenses can be a disaster at tax time. Or so found out Nicolas Cage who wrongly allocated $3.3 million in personal expenses as business costs. The government decided the costs of his jet, gifts and meals (and dinosaur skull!!!) were personal expenses and slapped him with a nasty personal tax bill. Who was his accountant??
Spend Within Your Means
Michael Jackson, Elton John, MC Hammer — all blew through massive personal fortunes, often resulting in bankruptcy. It seems nuts when you consider how much these folks made. But when you’re keeping up with the Joneses with multiple homes, numerous cars, your own jet and huge staffs, the money will go. No matter how much there is.
Trust No One
Embezzlement is a common story among celebrity accountants and financial advisors. Guess it’s just too tempting to move around all that money. Witness Kenneth Starr who stole from Uma Thurman and others to the tune of millions.
Follow The Smart Money
Celebrities such as Jay-Z, Jessica Simpson and Aston Kutcher have admirable track records with their finances. They invest in companies they believe in, sell their assets for what they are worth and avoid living beyond their means.
Which celebrity do you think is the most financially responsible?