Celebrities Make Dumb Money Moves Too

by Ron Haynes

hollywood It’s a natural human tendency to think that money makes you smart, or is it that being smart makes you money? After all, how did rich people get that way in the first place? Surely it had to do with intelligence, right? Maybe, maybe not.

Most people get insanely wealthy by filling a need, whether that need is for cheap Chinese products, mail order computers, life saving medical procedures, or … the escapism that IS Hollywood.

Celebrities make dumb money moves, too

In a recent Fox entertainment article, I read about 19 different celebrities that had made and subsequently lost a great fortune. One, Nicolas Cage, really caught my eye. Nicolas Cage claims his ex-manager, Samuel Levin, lined his pockets with a couple of million in management fees. But Levin points out that “Cage brought about his own financial ruin by living above his means. “ Levin says he warned the actor to scale back his lavish lifestyle. The actor’s purchases included several castles, 15 palatial homes, a large collection of yachts and a fleet of Rolls Royces.”

Who’s right? I guess the courts will have to decide, but for now, the evidence seems stacked against the guy who bought 15 homes … ‘scuse me, 15 palatial homes …

Other celebrities that have made and lost fortunes (some made it back again) included:

  • Lorraine Bracco
  • Mike Tyson
  • Kim Basinger
  • Randy Quaid
  • Don Johnson
  • Michael Jackson
  • Dorothy Hamill
  • Gary Coleman
  • Corey Haim
  • Burt Reynolds
  • Meat Loaf
  • Zsa Zsa Gabor
  • Wayne Newton
  • Mickey Rooney
  • MC Hammer
  • Willie Nelson
  • Donald Trump

Even “The Donald” was teetering on financial collapse ($900 million in debt!) before The Apprentice vaulted him back on top.

Celebrities are no smarter than YOU

Celebrities may make more money, but you just can’t buy common sense. The problem for most people, celebrities included, is that when they come into a lot of money, they tend to think the faucet will never run dry, that dollars are like drops of water in an inexhaustible ocean of supply.

The other problem with suddenly coming into a lot of money is that everyone around you has their hand out. It’s like buying a house. Anytime there’s a large cash transfer, everyone involved (and even some who aren’t) want a piece of the action – think of both real estate agents, the closing attorney, the title company, the mortgage broker, the home inspector, the media venues to advertise the home, the selling agent’s broker, the listing agent’s broker, and the list goes on. Celebrities have agents, managers, media handlers, wardrobe consultants, casting consultants, and lawyers, and they all want their piece of the pie as well.

Regardless of who has their hand out, it’s up to the person making the money to make some choices and say NO.

Economics: more than just a good idea, it’s the law!

Economics is about the use of scare resources and the choices humans make in light of that scarcity. When we find ourselves in the possession of a great deal of cash, we tend to think of all we can now do, the things we can buy, the attitudes we can cop at the office, and the fun we can now have. And it seems like it could never end.

But the truly intelligent among us realizes that money, like time, always runs out.

Suddenly having access to millions of dollars doesn’t make you smarter, it only reveals who you really were all along.

Photo by by The City Project

About the author

Ron Haynes has written 1000 articles on The Wisdom Journal.

The founder and editor of The Wisdom Journal in 2007, Ron has worked in banking, distribution, retail, and upper management for companies ranging in size from small startups to multi-billion dollar corporations. He graduated Suma Cum Laude from a top MBA program and currently is a Human Resources and Management consultant, helping companies know how employees will behave in varying situations and what motivates them to action, assisting firms in identifying top talent, and coaching managers and employees on how to better communicate and make the workplace MUCH more enjoyable. If you'd like help in these areas, contact Ron using the contact form at the top of this page or at 870-761-7881.

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Dustin | Engaged Marriage

Your last line says it all, Ron. I believe it is Dave Ramsey who often uses the line “Becoming rich just makes you more of who you already are.” I’m of the opinion that these celebrities would be in financial ruin no matter how much or how little they earn. They are simply irresponsible in their financial matters and perhaps a bit too conceited to admit it and seek counsel.

Unfortunately, the same holds true for their relationships as well.

Letterhead Printing | UPrinting.com

As they say, celebrities are human too. And as humans, we all make dumb decisions sometimes. I think another factor to a celebrity’s financial crumble is that they don’t make back-up plans. If Nicolas Cage made his money grow instead of spending it on things he may not even use, he wouldn’t run out of money.

Credit Girl

Like what you said earlier about how everyone wants a piece of the pie, celebrities also go out in huge entourages a lot of the time…They go out to eat in groups of 10+ and then hit the clubs afterward. And i’m sure that they get pricey bottle service as well. All of this contributes to their inability to manage their money effectively ultimately leading to bankruptcy.

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