Once rich stars--bankrupt!

[BayGBM]

How stars so rich and famous can go broke
by Kathleen Pender

It would seem inconceivable if it didn't happen so often: highly paid celebrities and athletes going broke.

Despite having one of the most lucrative careers in show business, Michael Jackson reportedly died $400 million in debt. Ed McMahon narrowly avoided foreclosure on his home before he died last week.

Actor Stephen Baldwin, former baseball slugger Jose Canseco and former basketball star Latrell Sprewell all lost their homes to foreclosure recently, and boxer Evander Holyfield is heading that way.

Actors and singers who have reportedly filed for bankruptcy in the past 20 years include "Sopranos" shrink Lorraine Bracco, Randy Quaid, Burt Reynolds, Kim Basinger, Gary Coleman, MC Hammer, Wayne Newton, Willie Nelson, Merle Haggard, Toni Braxton and La Toya Jackson (Michael's sister).

Pro athletes seem even more prone to financial loss.

Sports Illustrated estimates that 78 percent of former National Football League players, within two years of retirement, are bankrupt or "under financial stress because of joblessness or divorce." Within five years of retirement, an estimated 60 percent of former National Basketball Association players "are broke." And at least 10 major-league baseball players fell prey to alleged fraudster Robert Allen Stanford, the magazine says.

For each failure, there is usually a reason: a lawsuit, illness, injury, divorce, unexpected tax bill or bad investment. Those are the same things that throw ordinary folks into bankruptcy, but celebrities face challenges most of us don't.

One is that their careers are highly uncertain and often brief. In the business world, it's fairly easy for someone with a seven-figure income to guesstimate their future earnings, says Ken Naehu, a managing director of Bel Air Investment Advisors in Los Angeles.

"In the entertainment world, you can be very hot and then not. You can't spend like you will have a 20-year career at that type of earnings. Part of what an adviser is supposed to do is tell them what they don't want to hear: You have to invest and protect this money because it might be all you have."

Not all celebrities heed that advice.

"Some people are not willing to accept the bad news: You can't live at this lifestyle. They say, 'I'll make money some other way,' " says Ken Anderson, a director in Los Angeles with wealth management firm Aspiriant.

Sometimes they can.

"I know firsthand some celebrities in this town go on tour because they have to, not because they want to," Anderson says. "I've dealt with some athletes. When they ran out of money, they went to a baseball park and sold autographs for $10 or $20 a pop and that kept them out of the newspaper for being destitute."

Canseco recently appeared in a mixed martial arts match in Japan.

Fame isn't cheap

Along with their outsize incomes, celebrities also have enormous overhead: large homes, agents, managers, publicists, bodyguards, assistants and others who may or may not have their best interests at heart.

"In entertainment and sports, salaries are published. It's like winning the lottery. People come out of the woodwork trying to sell you things," says Ted Beck, president and chief executive of the National Endowment for Financial Education.

"Because you have achieved wealth based on talent, not business skills, you immediately become a target, especially if you are young. Trying to ferret out who is there to help you in a professional way is hard. You are inundated with people trying to share your success, not provide a service to you."

Beck, whose organization makes grants, has experienced this on a smaller scale himself. "I'm always amazed how suddenly popular I get at meetings. When people start saying, 'That was an intelligent comment,' I immediately check my wallet," he says.

Cutting costs tough

Like any business with fixed costs, celebrities often have trouble cutting their expenses quickly enough when their income nosedives.

"If you are making $10 million a year, keeping $7 million after taxes, and you are spending pretty close to that, it won't take long for you to be out of money if your income stops but your spending continues for six months," Naehu says.

Some celebrities and athletes get into bad investments because they think their success on the stage or field will translate to other areas of life.

"Having one sort of talent does not usually bestow all sorts of talents on a person," says Terrance Odean, a professor and behavioral finance specialist at UC Berkeley's Haas School of Business. "You often find athletes and entertainers making poor investments because the skills and knowledge they needed to become athletes and entertainers does not include business skills."

Not all celebrities act this way. Naehu says that most of the celebrities his firm works with are more nervous or tentative than noncelebrities, either "because of their past experience or experience (of others) they know."

He also knows a few wealthy celebrities who grew up poor and continue to live well below their means.

What, if anything, can the average person learn from celebrity failures?

"It's important to insulate your lifestyle," Anderson says. "Take care of your personal needs with conservative investments you know are going to be there. Use riskier assets for the extras of life."

[Earl1972]

people that make their money through entertainment don't appreciate the value of a dollar

how can you when you don't have to work hard for your money?  playing basketball or singing is not "working"

E

[24KT]

Something people are often unaware of is that being an entertainer is quite expensive. Quite often an entertainer only gets to keep a small fraction of what they gross... if they're lucky. Between agents, mgrs, publicists, lawyers, and taxes.... they're lucky if they get to keep 20 - 30% of what they gross. And that's being generous. In the US, some personal mgrs can get as much as 50% of a performers gross. The agents get 10%, the publicists 10% the lawyers can take another 10 - 15% and the business mgrs another 10 - 15%... There's very little left over for the performer. From what's left, they have to cover household & living expenses... including security which most of the rest of the public doesn't have to contend with.  Why do you think celebs are constantly getting things for free and never have to pay for anything... it's 'cause people in the know, know they can't afford to. 

Wynona Ryder anyone?

I swear people started crying when the IRS announced they were going to start taxing the value of the bling given out in goody bags.

Some celebs have good long runs like Leno and the cast of Knots Landing, ...who earn solid paycheques over an extended run allowing them the ability to make good solid investments that pay off over time, but for many of the celebs du jour... without solid diversification, and ongoing residuals, ...they can be sunk faster than you think.

Sometimes you'll get a celeb with such box office power that they can renegotiate their contracts down to a mere few percentage points like Madonna did. What agent is not going to want to represent her even if they're only getting 5%. She can command huge fees wherever she goes and whenever she wants. For the rest, ...they're at the mercy of the leeches.

[24KT]

people that make their money through entertainment don't appreciate the value of a dollar

how can you when you don't have to work hard for your money?  playing basketball or singing is not "working"

E

Maybe you should try being an entertainer to see whether or not you work hard.
Make no mistake, ...it is hard work, ...in many cases harder than most, ...it's just a different kind of hard work.
One that takes it's toll, not only physically, but mentally, emotionally, psychically, and spiritually. It can eat you alive.

[Earl1972]

Maybe you should try being an entertainer to see whether or not you work hard.
Make no mistake, ...it is hard work, ...in many cases harder than most, ...it's just a different kind of hard work.
One that takes it's toll, not only physically, but mentally, emotionally, psychically, and spiritually. It can eat you alive.

oh please

all of them are doing something they love, along with getting the attention and admiration they've always craved

it's not work when you love it, and you can never tell me that playing a kids game for a living or singing is work especially when people that actually work do these things in their spare time

E

[24KT]

oh please

all of them are doing something they love, along with getting the attention and admiration they've always craved

it's not work when you love it, and you can never tell me that playing a kids game for a living or singing is work especially when people that actually work do these things in their spare time

E

Whether they love it or not is completely irrelevent and doesn't negate the fact that it is hard work.

I'm sure porn stars love what they do too, ...but despite that, you can't tell me that Asian porn star who had a marathon gang bang with over a 100 of her fans wasn't working hard.

Not all of them crave attention and admiration.
Many accept it as the sacrifice and price they have to pay, ...but trust me when I tell you, they don't all crave it.

[Earl1972]

Whether they love it or not is completely irrelevent and doesn't negate the fact that it is hard work.

I'm sure porn stars love what they do too, ...but despite that, you can't tell me that Asian porn star who had a marathon gang bang with over a 100 of her fans wasn't working hard.

Not all of them crave attention and admiration.
Many accept it as the sacrifice and price they have to pay, ...but trust me when I tell you, they don't all crave it.

it is not as hard as working a real job, like i said they get paid to do what average joe's do as a hobbyand it's not work when you are passionate about something

any person that bitches about their life as a rich entertainer is the type that would blow their brains out working 9 - 5

no the asian porn star isn't working hard, she's lying there getting plowed by men, that is really your idea of work , seriously???

yes they all crave attention, when they say they don't they are lying because nobody wants to admit to being an attention whore

i'm sure it gets annoying with papparazzi snapping photos while they eat but other than that they love the attention, if anything that's the whole reason a lot get into show business, why do you think c list celebrities do reality shows? because that's the only way they can get attention and stay in the limelight

aspiring singers don't say "i want to be rich" they say "i want to be famous"

E

[24KT]

it is not as hard as working a real job, like i said they get paid to do what average joe's do as a hobbyand it's not work when you are passionate about something

Dude, just because I'd paint my own house, build a deck in my back yard, or change my own oil for free, doesn't mean it's not work, ...and it sure as heck doesn't mean that anybody who does that doesn't deserve to get paid for it.

any person that bitches about their life as a rich entertainer is the type that would blow their brains out working 9 - 5

Quite possibly, ...but that doesn't mean it's not hard work.
There are also many 9-5 types that wouldn't be able to handle life as a celebrity entertainer either.
Many of them have been known to blow their brains out too. Kurt Cobain anyone?

no the asian porn star isn't working hard, she's lying there getting plowed by men, that is really your idea of work , seriously???

Dude if you think doing over 100 guys back to back isn't hard work, ...you're either crazy... or gay. Which is it?

yes they all crave attention, when they say they don't they are lying because nobody wants to admit to being an attention whore

How many celebs do you know? Seriously. Do you have any as friends? Have you ever spent time with them?
I'm not refering to meeting someone one night and hanging out for a few hours, ...but actually getting to know one, ...having a friendship with one, and being a part of their lives. Have you?

i'm sure it gets annoying with papparazzi snapping photos while they eat but other than that they love the attention, if anything that's the whole reason a lot get into show business, why do you think c list celebrities do reality shows? because that's the only way they can get attention and stay in the limelight

You appear to equate being an attention whore with being a celebrity. It's truly not the same thing.
Yes, there are attention whores who do reality TV as a means of getting attention and trying to stay relevant, ...however, there's a big difference between being a celebrity and being an attention whore.
Yes, I won't deny alot of celebrities are attention whores, ...but there are those who are not.
There are many celebrities who surprisingly enough are extraordinarily shy, and the attention is excrutiatingly painful.

aspiring singers don't say "i want to be rich" they say "i want to be famous"

E

Aspiring singers who are attention whores say "I want to be famous". Most singers just want to sing.

There's no question about it that many performers are attention whores, ... a much larger percentage than is found in the average population, but the fact remains that most performers just want to do the work. The rest is a price the have to pay in order to do the work. The perks that come with fame, are a poor consolation for the sacrifice they have to make. If they can do the work and make the same money without the fame, ...many would jump at it. Most actors just want to act.

[jerseyhurricane]

Actors put in 14 hour days on set. Thats hard work.

Pro Athletes doing two a day practices plus hitting the gym and eating well...thats hard work.

Dealing with the public, agents, publicists, magazines, news crews...you guessed it. Hard work.

These people don't have as easy as you think.

[24KT]

Actors put in 14 hour days on set. Thats hard work.

Pro Athletes doing two a day practices plus hitting the gym and eating well...thats hard work.

Dealing with the public, agents, publicists, magazines, news crews...you guessed it. Hard work.

These people don't have as easy as you think.

Exactly, ...and that's if you're lucky.
Try staying at peak energy for 14 hours a day. It seriously wipes you the fuck out!
That's only if you're fortunate enough to be a no name. If you're a headliner, ...you can add endless contractural promotions and interview junkets on top of that. Try being cooped up in a hotel room for 10 hours a day with 40 different journalists all asking you the same damned questions over & over and over again, ...while you have to smile through the whole thing and pretend like it's the first time you've ever even heard such a question, ...day in day out.

John Travolta is the only actor I know of that doesn't bleed on set figuratively speaking.
It's written into his contracts that he works straight 9-5 Monday through Fridays... no weekends or overtime.
Even then, he's still giving it 110% cause he's probably in every damned scene.

The cushiest acting gigs I know of are voice actors. No hair/ no makeup / no wardrobe... just studio sessions.
Still, even those are taxing as hell. Mel Blancs doctors said his vocal chords didn't look like a normal person's.
When he died, they discovered that instead of thin membranes, his were like tough thick sinewy muscles.

Even being a musician is hard work. Try going on tour sometime and see if that doesn't wipe you out.
I know guys that will train for months just to get in shape to be able to go out on tour. If you've never done it, ...or know someone who has, you may never appreciate just how taxing it is on the body, mind, and soul.

[jerseyhurricane]

Exactly, ...and that's if you're lucky.
Try staying at peak energy for 14 hours a day. It seriously wipes you the fuck out!
That's only if you're fortunate enough to be a no name. If you're a headliner, ...you can add endless contractural promotions and interview junkets on top of that. Try being cooped up in a hotel room for 10 hours a day with 40 different journalists all asking you the same damned questions over & over and over again, ...while you have to smile through the whole thing and pretend like it's the first time you've ever even heard such a question, ...day in day out.

John Travolta is the only actor I know of that doesn't bleed on set figuratively speaking.
It's written into his contracts that he works straight 9-5 Monday through Fridays... no weekends or overtime.
Even then, he's still giving it 110% cause he's probably in every damned scene.

The cushiest acting gigs I know of are voice actors. No hair/ no makeup / no wardrobe... just studio sessions.
Still, even those are taxing as hell. Mel Blancs doctors said his vocal chords didn't look like a normal person's.
When he died, they discovered that instead of thin membranes, his were like tough thick sinewy muscles.

Even being a musician is hard work. Try going on tour sometime and see if that doesn't wipe you out.
I know guys that will train for months just to get in shape to be able to go out on tour. If you've never done it, ...or know someone who has, you may never appreciate just how taxing it is on the body, mind, and soul.

Its good to know someone here agrees with me...thanks.

[24KT]

Its good to know someone here agrees with me...thanks.

No Thank You!     

[Dos Equis]

Oh please.  Entertainers and professional athletes play for a living and it's not even a full-time job.  They "work" hard part of the time, but it's not the "real world."  Hard work is teaching a group of kids in elementary or high school on a daily basis, managing a grocery store, building or repairing homes, janitorial work, working a farm, etc.   

[24KT]

Oh please.  Entertainers and professional athletes play for a living and it's not even a full-time job.  They "work" hard part of the time, but it's not the "real world."  Hard work is teaching a group of kids in elementary or high school on a daily basis, managing a grocery store, building or repairing homes, janitorial work, working a farm, etc.   

 

Ya, tell this dancer she just "plays" for a living, and how "easy" her work is...






...and while you're at it, tell this ballerina as well. She might be a bit busy bandaging her bleeding feet tho, but go ahead.




ps: It only looks like play because they are so proficient at it. 

[24KT]

Beach, ...hard work is keeping from beating you within an inch of your life!    That's hard work!

[drkaje]

Entertainers and sports people shouldn't get married.

[Dos Equis]

Beach, ...hard work is keeping from beating you within an inch of your life!    That's hard work!

You sure are violent.   

And oh a poor little dancer's feet hurt.  Boo freakin hoo.   

[jerseyhurricane]

Just because it isn't manual labor doesn't mean its not hard work.

[Dos Equis]

Just because it isn't manual labor doesn't mean its not hard work.

Never said that.  Note I mentioned "teaching a group of kids in elementary or high school on a daily basis" and "managing a grocery store," neither of which are manual labor.  Point was the rank and file who work 5 or 6 (or more) days a week doing real work--as opposed to "acting" or playing a game--are the ones who do hard work. 

[Earl1972]

Dude, just because I'd paint my own house, build a deck in my back yard, or change my own oil for free, doesn't mean it's not work, ...and it sure as heck doesn't mean that anybody who does that doesn't deserve to get paid for it.

singing and playing basketball is not work, nobody ever lists "building a deck" as a hobby or something they do for fun, it's work

Quite possibly, ...but that doesn't mean it's not hard work.
There are also many 9-5 types that wouldn't be able to handle life as a celebrity entertainer either.
Many of them have been known to blow their brains out too. Kurt Cobain anyone?

all 9 -5 people would trade their job for a life as an entertainer, ever notice how people worship celebrities?

Dude if you think doing over 100 guys back to back isn't hard work, ...you're either crazy... or gay. Which is it?

now i see why everybody says what a moron you are

comparing sex to an actual job

How many celebs do you know? Seriously. Do you have any as friends? Have you ever spent time with them?
I'm not refering to meeting someone one night and hanging out for a few hours, ...but actually getting to know one, ...having a friendship with one, and being a part of their lives. Have you?

none but i have worked in movies

ever wonder why these celebrities choose their celebrity job over a real job, have you ever wondered that

You appear to equate being an attention whore with being a celebrity. It's truly not the same thing.
Yes, there are attention whores who do reality TV as a means of getting attention and trying to stay relevant, ...however, there's a big difference between being a celebrity and being an attention whore.
Yes, I won't deny alot of celebrities are attention whores, ...but there are those who are not.
There are many celebrities who surprisingly enough are extraordinarily shy, and the attention is excrutiatingly painful.

since when does being shy mean you don't crave attention?

if these people were given the choice of a real job and being an entertainer for the same salary, what do you think they would choose?

Aspiring singers who are attention whores say "I want to be famous". Most singers just want to sing.

yes they just want to sing and they love the attention and admiration, nobody gets on stage without loving attention and hearing applause

There's no question about it that many performers are attention whores, ... a much larger percentage than is found in the average population, but the fact remains that most performers just want to do the work. The rest is a price the have to pay in order to do the work. The perks that come with fame, are a poor consolation for the sacrifice they have to make. If they can do the work and make the same money without the fame, ...many would jump at it. Most actors just want to act.

they want to act because it beats the hell out of working a real job in every way, like i said it's not work when you love doing it and would do it in your spare time

E

[Earl1972]

Actors put in 14 hour days on set. Thats hard work.

Pro Athletes doing two a day practices plus hitting the gym and eating well...thats hard work.

Dealing with the public, agents, publicists, magazines, news crews...you guessed it. Hard work.

These people don't have as easy as you think.

14 hours a day on a movie set is far better than a real job, knowing the money you are getting paid and the status it gives you

practicing a game is not hard work, have you ever worked a real job

dealing with agents and others can be annoying, that is not work especially when they love attention

E

[Earl1972]

Ya, tell this dancer she just "plays" for a living, and how "easy" her work is...






...and while you're at it, tell this ballerina as well. She might be a bit busy bandaging her bleeding feet tho, but go ahead.




ps: It only looks like play because they are so proficient at it. 

hahaha my feet look like that from jogging,  willingly did it for free

you're just another person that puts them on a pedestal, i'm willing to bet these people are all living their lifelong dream

if she didn't love it she could work a regular job like the rest of us, somehow she keeps dancing

E

[OzmO]

Grass always seem so much greener on the other side.  Entertainers work very hard.  So do ditch diggers.  Very few people in the world get by on talent alone because isn't usually enough unless you develop it through hard work.

Earl does have some good points as well as Jag in this instance. 

I would just add this to put everything on common ground:   "If you love what you do, you will never work another day in your life."  whether thats building a deck or scoring a touch down.

[Earl1972]

 

I would just add this to put everything on common ground:   "If you love what you do, you will never work another day in your life."  whether thats building a deck or scoring a touch down.

that's my point all along, any person that sings or plays basketball for a living more than likely has had a passion for it their entire lives

if you are passionate about what you do for a living, you are not "working" you're getting paid to do what you would do in your free time

basketball players growing up sometimes would practice until they made 500 shots, you could call that working hard and you could also say he was having much more fun than he would studying to pass the bar exam

no one can ever convince me that playing a sport or singing is work, yeah they may have to do it for long hours but none of them would choose a real job with the same pay over their entertainment job

a lot of celebrities are mentally ill, these people will complain about a broken nail and make people like jag think it's hard work

don't forget singers, actors, and athletes have much longer vacations than any person that is actually working

i'm still laughing about the feet pics

E

[24KT]

that's my point all along, any person that sings or plays basketball for a living more than likely has had a passion for it their entire lives

if you are passionate about what you do for a living, you are not "working" you're getting paid to do what you would do in your free time

Earl, I think you're completely missing the point. Despite someone doing the work they love, or following their passion, ...it is still hard work. Regardless of how much pleasure or creative satisfaction is derived from it. It is simply a "different kind" of hard work, often requiring a different set of muscles. It is nonetheless just as taxing, if not more so, on the mind, body, spirit, and soul as other forms of work. You're defining "work" as something to be detested, or as engaging in something you dislike. I'm defining "work" as something requiring tremendous effort & discipline.

basketball players growing up sometimes would practice until they made 500 shots, you could call that working hard and you could also say he was having much more fun than he would studying to pass the bar exam

no one can ever convince me that playing a sport or singing is work, yeah they may have to do it for long hours but none of them would choose a real job with the same pay over their entertainment job

Whether or not they would choose a different job with the same pay is completely irrelevant.  It still is hard work. I think you diminish it's value, the work, the efforst, and the science and knowledge that goes into it because those who do it make it look so easy. Everyone thinks they can sing... they open their mouths, ...sounds come out, ...and they think it's singing. If you were to tell those same people to hit a high "C" however, they wouldn't be able to. They could make sounds, but they'd have no idea what notes those sounds correspond to. That takes talent, skill, ability, knowledge, and extremely hard work.

a lot of celebrities are mentally ill, these people will complain about a broken nail and make people like jag think it's hard work

Yes, alot of celebrities ARE mentally ill. Often because the rigours of their professions, coupled with the sacrifices they must make in order to do what they do, takes one hell of a toll on the individual's mind, body and soul.
I referring at this point to actors, not celebrities, but actors... "real actors". Heath Ledger immediately comes to mind. There's acting, and then there's "real acting". Real actors transport themselves to places that most never visit, and it is taxing as hell.  If you've never been an actor, you have no idea what I mean. And having been hired to perform in a play, or appear in a movie, TV show, commercial etc, does not make one an actor.

don't forget singers, actors, and athletes have much longer vacations than any person that is actually working

They have longer vacations because they can financially afford to, and they need to. I think anyone who dug ditches for a living would gladly jet off to the south of France for a month if they could afford to and still keep their jobs.

i'm still laughing about the feet pics

E

I'm glad you found those amusing. I'm sure the dancers whose feet bleed after every performance do not.
Out of curiosity, do you know any prima ballerinas? I do, ...and it's sad to see some of them in their 40's with bones like those in their 60's.

Anyway, all that aside, this thread isn't about whether celebrities, entertainers, sports figures or performers work hard, ...it's about once rich stars who are now bankrupt.  The fact is the skills they develop that enable them to get paid what they do, are not the same skills required for sound fiscal management. Nor are their incomes as steady as the 9-5'er.

Look at the Olsen twins. Do you honestly think they are rich because they have great business minds?
I don't. I think they're nice girls (at least they were when I met them), but I believe their financial success is due to both Coogans law, and the fact that they had good business managers managing their money from the time they were toddlers. 

Alot of celebrities are robbed blind by their business managers. If Cameron Diaz didn't have the ability to pull $20 million for Charlies Angels, ...she'd be broke too. She too is just one of many who were ripped off to the tune of 7 figures by thieves in blue suits. It happens in Hollywood more often than you think.

Hollywood is a cruel, shallow, plastic money trench
where thieves and pimps run free, and good men die like dogs.
~~ Hunter S Thompson