While celebrities’ money woes may be far different from the regular person’s, the mistakes that lead to going broke are universal and, saldy, too easy to make. Here are 5 lessons to take from celebrities that have gone broke:
Live within your means. Celebrities come into large amounts of money pretty quickly, leading to a lavish lifestyle. Nicholas Cage earned $40 million in 2009 alone, and spent it on homes, cars, and rare artifacts. MC Hammer collected $30 million after his hit, “Can’t Touch This,” and spent it on a mansion, a 200-person staff, a stable, and 19 horses. He soon had to declare bankruptcy. With social media exposing us to their expensive inner lives, and selling us products that we don’t necessarily need, we could just as easily fall into the trap of spending beyond our means and paying the price.
Face debt head on. Award winning actor Miles Teller was deep in student loan debt. Lady Gaga went bankrupt in 2009 because she used all her money to make her stage. Anyone can easily fall into debt even with good intentions — whether that’s paying for school, taking on a loan to start a business, pursuing a passion, or paying for unforeseen bills. However, skirting around the issue or trying to ignore it won’t help. Make a plan and set money aside to pay for your debts.
Budget, budget, budget. Living from hand to mouth is oftentimes a result of mishandled finances and poor planing. For example, if you don’t consciously study your income stream vis a vis your expenses, your hard-earned cash will just head straight out after it comes in. Budgeting is essentially a spending plan that ensures you will always have money for the things you foresee yourself needing, as well as unforeseen needs. It can also help you work your way out of debt. Celebrities like Michael Jackson, 50 Cent, and Dennis Rodman had gone broke because of accrued debt. Tracking your income and spending allows you to make informed purchases and loans, and can greatly improve quality of life.
Invest in track record, not trends. Novelist Mark Twain lost $30,000 after investing in protein powder. Gary Coleman had to file bankruptcy in 1999 because of, aside from immense legal fees, bad investments. Rapper T-Pain also lost all the $40 million he earned at the height of his career to bad investments. While there is always a certain level of risk in any investment, real estate is one industry that has remained thriving, and property will always have good investment potential.
According to CitiGlobal Realty & Development, Inc., three reasons to invest in real estate include: relatively low risks, endless returns due to a stable local market, and fixed assets, in which the land you invest in only gets more valuable over time. Foolproof real estate investments include residential properties, condominiums, vacation homes, warehouses, empty lots, dormitories, and low-rise commercial buildings.
Going broke doesn’t have to mean staying broke. Cindi Lauper had to file for bankruptcy before she made it big. The key is to know what to do with your money after you’ve earned it, and make informed decisions on spending and investing by talking to professionals, studying the market, and doing your homework.
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For more information about investing in real estate and CitiGlobal properties in Tagaytay, Palawan, and other leisure destinations, visit https://citiglobal.com.ph.