What can we learn from bankrupt movie stars?
When the rich and famous lose it all, we are intrigued about what went wrong. Should we instead ask ourselves what we can learn from their financial mismanagement?
Dionne Warwick rose to fame in the 60’s with hits like Walk on By, Say a Little Prayer, and Do You Know the Way to San Jose. She won five Grammy awards, charted more than 60 singles, and had album sales over $100 million dollars. In 2013, she filed for bankruptcy at age 72, down to her last $1,000 in cash and a $10 million tax debt. Reportedly, it was the mushrooming of accumulating tax penalties and interest that did her in financially.Burt Reynolds, the popular star of movies like Smokey and the Bandit and The Longest Yard, made his big mistake with a $750,000 second mortgage on top of a $1.2 million dollar mortgage on a home valued at $4 million. As the story goes, he woke up one morning as surprised as everyone else that he was broke. His financial troubles have been attributed to a 1996 bankruptcy after divorcing ex-wife Loni Anderson and launching an unsuccessful restaurant business. Then he remarried, divorced the next wife, and ended up with lawsuits and ensuing money battles.
There were others: Ed McMahon, George Foreman, Nicolas Cage, Johnny Unitas, Debbie Reynolds, and Michael Jackson. Going back to our early history, there were others who either lost it all or came perilously close: Thomas Jefferson, Buffalo Bill Cody, Mark Twain, and Ulysses S. Grant.
Each of these big names had problems with money management. Some spent too much, made poor financial decisions, or simply squandered the money away.
What can we, who make far less money and have far less fame that these, learn from their mistakes? Stay simple. Live within our means. Pay bills on time, especially taxes and interest on bank loans. Avoid over-investing and marry for love, not money. With simple financial discipline we can enjoy our later years in life without worrying about money.