When we consider how much money celebrities make, it's amazing to think that they also have financial problems, but if you have all the money in the world, it just means you have more ways to spend it on the road to bankruptcy. Manage your finances well, and you'll avoid the fate of these celebrity-sized money missteps.

1. Avoid Donald's Debt Downfall
Donald Trump may have thousands seeking to be his apprentice in order to learn his business skills, but they'd be best off learning his skills by reading his bankruptcy paperwork; Trump has declared business bankruptcy three times.

The lesson? Grow your company slowly without over-reliance on debt. After all, what's the value of running a billion dollar company, if you've got one of the world's largest corporate debts?

2. Practice Six Degrees of Due Diligence
Kevin Bacon and Kyra Sedgwick
lost nearly everything in Bernie Madoff's Ponzi scheme. It's said that they only have their home and their checking accounts left.

The lesson? Don't trust one person with all of your money without understanding why your money is growing so fast. Ask tons of questions and diversify your investments into different investment vehicles. Don't discount saving money in savings accounts and money market accounts. You always want some money in an insured, liquid account, so you won't lose everything if the stock market takes a nose dive.

3. Show Real Estate Restraint
Jose Canseco, Ed McMahon, Wyclef Jean, Evander Holyfield and Michael Jackson
are just a few of the celebs whose homes have been foreclosed on or are in danger of foreclosure.

The lesson? When you have sporadic income, either because you don't know where your next $10 million paycheck is coming from or you're a salesperson who relies on commission-based income, buy a home that costs less than the most expensive home you can qualify to buy. Then, pay your mortgage off as soon as possible.

4. Learn from Sir Paul's Prenup Blunder
Paul McCartney
had a lot of financial trouble with his divorce from Heather Mills. Because of the absence of a prenup, Heather Mills walked away with nearly $50 million. However, with his net worth in the 100s of millions, Sir Paul's poor house can still be a castle. But for the rest of us, we should at least consider the Kanye West lyric, "We want prenup", to protect our assets before marriage.

For more information on how to avoid these blunders in your life check out: The Biggest Stock Scams Of All Time, Create A Pain-Free Postnuptial Agreement, You Can't Live On Love, Should You File For Bankruptcy? and Bank Failure: Will Your Assets Be Protected?

Related Articles
  1. Entrepreneurship

    4 Most Successful Indiegogo Campaigns

    Learn about some of the most successful crowdfunding campaigns on Indiegogo, which raised millions of dollars for everything from electric bikes to beehives.
  2. Entrepreneurship

    Top 10 Features Of a Profitable Rental Property

    Find out which factors you should weigh when searching for income-producing real estate.
  3. Wealth Management

    The Net Worth of the Shark Tank Cast

    Discover how the richest "Sharks" on the hit TV show amassed their vast fortunes, and learn how much they have to offer eager entrepreneurs.
  4. Entrepreneurship

    3 Ways You Can Support Small Business Growth

    Discover a number of different options available to support small business growth, including crowdfunding campaigns and shopping locally.
  5. Investing News

    SEP vs. Keogh Plans: Which is Right for You?

    SEP and Keogh plans each have their pros and cons. Here's how to choose which one is right for you.
  6. Entrepreneurship

    10 Ways to Be a Successful Entrepreneur

    Are you hoping to launch your own business and work for yourself? If so, here are the top 10 tips for entrepreneurs.
  7. Entrepreneurship

    Need a Loan for Your Startup? Here's How to Prepare a Thorough Loan Package

    Learn how to craft the vital components of a loan package for your startup small business, and how to package it to be as appealing to the lender as possible.
  8. Budgeting

    10 Financial Habits That Will Lead to Bankruptcy

    Learn 10 easy financial mistakes that can lead to ruin even for responsible people, including the hazards of ignoring credit scores and letting bills stack up.
  9. Entrepreneurship

    10 Habits Every Entrepreneur Should Have

    Discover 10 habits common to successful entrepreneurs that you can emulate in your journey toward achieving success in your own career and life.
  10. Entrepreneurship

    10 Ways to Make Money on the Side

    Learn about 10 different things you can do on the side to add to the income you receive from your regular job or while you're looking for full-time work.
  1. Are variable annuities protected from creditors?

    Whether your variable annuity is protected from creditors depends on the state in which you live. About three-quarters of ... Read Full Answer >>
  2. Will my credit score suffer from debt consolidation or refinancing?

    You have several options for reducing your debt burden. You can enroll in a professional debt management plan, or consider ... Read Full Answer >>
  3. Can I file for bankruptcy more than once?

    Filing bankruptcy is never a simple decision, but sometimes it is the best thing you can do in your current financial situation. ... Read Full Answer >>
  4. Can creditors garnish my IRA?

    Depending on the state where you live, your IRA may be garnished by a number of creditors. Unlike 401(k) plans or other qualified ... Read Full Answer >>
  5. Is my IRA protected in a bankruptcy?

    All types of individual retirement accounts, or IRAs, recognized under the federal tax code enjoy substantial protection ... Read Full Answer >>
  6. How do I avoid a tax lien on my property?

    The best way to avoid a tax lien on your property is to make sure you pay all your state, municipal and federal taxes in ... Read Full Answer >>

You May Also Like

Trading Center