If you want to build lasting wealth, regardless of what talents you've been blessed with or what you do for a living, buy assets and sell liabilities. Do that often enough, and you'll get rich in spite of yourself. Or if that doesn't sound appealing, you could just race to spend money as indiscriminately as possible. These celebrities did that and took all the advantages they'd accrued and turned them into disadvantages.
In a society where some people are famous just for being famous, Donald Trump has spent almost 30 years being famous for being rich. In that time, Trump-branded companies or properties have declared bankruptcy not once, but four times. Granted, each of those were corporate bankruptcies and not personal ones. In each of those bankruptcies, the creditors had the same problem: Do we operate within our rights and take over his business, or do we allow him to restructure his debt in the hopes of receiving even more money at a later date?
It wasn't that long ago that being the world heavyweight boxing champion carried cachet and fame. Few belt-holders were more famous than Mike Tyson. At one point, Tyson was the featured attraction in the four biggest pay-per-view boxing matches in history. The cumulative gross from his fights is estimated at $300 million. That's gross, not net, meaning Tyson had to pay everything from management fees to payroll out of it. Still, a fighter's share of $300 million should be enough to live comfortably on through this and several subsequent lifetimes. However, Tyson had a $6.5 million divorce settlement and had his boxing license suspended for biting an opponent's ear off. He also had to make substantial child support payments and bought more than he could afford. Today, Tyson claims that he's "totally broke."
The number of celebrities, or even people in general, who learn from their financial mistakes is small indeed. Recidivism and chronic bankruptcy almost seem like the rule, not the exception. Wayne Newton has performed 30,000 shows on the Las Vegas Strip over the last 50 years, making up to a quarter-million a week in the process. Fancying himself an investor, he made several acquisitions that he either couldn't or wouldn't maintain the payments on. When monthly expenses include such esoteric items as penguin habitats and custom-made silk suit dry cleaning, that's probably as good an indication as any that you might be over your head. In 1992 Newton formally declared bankruptcy. He eventually found his way out of it and even reached a positive net worth a few years later.
The former Stanley Burrell enjoyed a brilliant, if brief, career atop the pop charts in the late 1980s and early 1990s. He sold around 50 million records. At one point MC Hammer's payroll contained over 200 people. That black marble in his Mission Peak mansion wasn't about to polish itself. MC Hammer filed for Chapter 11 bankruptcy in 1996. His activities since have included everything from preaching to starring in reality TV.
The Red-Headed Stranger began as a singer and songwriter in the early 1960s and wrote songs for legendary Nashville stars while his own performing career stagnated. Finally, in the 1970s, Willie Nelson emerged from a self-imposed retirement and became the icon we know today. Once he had money of his own, Nelson believed in sharing the wealth. The stories of him over tipping everyone from golf caddies to bellhops are legendary. By 1990, Nelson's poor investments and incompetent accountants had left him hounded by the Internal Revenue Service. He was cited for $16 million in unpaid taxes. Nelson ended up working out an unusual agreement with the IRS and released an album recorded for the express purpose of retiring his debts.
Vaudeville star Sophie Tucker said she's been rich and she'd been poor, and rich is better. "Unlimited" wealth is just an expression, as opposed to a literal thing. Unfortunately, a lot of celebrities can't seem to discern or appreciate the difference.
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