Five Celebs Who Made Terrible Money Decisions
Written by Robert Bester, Consumer Finance Expert Robert has been a writer for six years, specialising in consumer finance and the UK lending market. Concentrating on consumer credit products, Robert writes informative articles that help customers manage their personal finances efficiently.
23rd November 2020
3 minute read
The phrase ‘more money than sense’ certainly applies to these celebrities who went from filthy rich to flat broke after making some utterly bananas decisions with their cash.
But never fear financial wisdom seeker, I, the Guru, am here to stop you following in their footsteps and ending up as a financial flop.
Despite having an estimated net worth of a mind-boggling $36 million in 2014, Kim Basinger filed for bankruptcy in the 90s after she pulled out of a film role (for there being too many nude scenes) costing her $3.8 million after the film company sued her. She had also bought a small town, Braselton in Georgia, for $20 million dollars, which later sold for just $1m. Hmm….
My advice: “Make sure you have a backup plan so that even the most unforeseen financial challenge is not a complete catastrophe. You might not own a town, even a small one, that you can sell for emergency Spon-doolies but making sure you have some savings squirreled away can give you a little bit of a buffer should the worst happen and you find yourself having to shell out a wad of cash.”
The “star” of reality TV show The Hills reportedly spent a whopping $10 million of her fortune in preparation for the Mayan apocalypse in 2012. Heidi, along with her husband Spencer Pratt apparently went on a pre-apocalyptic spending spree, handing out thousands of $$ to friends and tipping people $200 to open doors which seem like a totally legit way to prepare for doomsday. When the asteroid shockingly didn’t hit earth on 21st December 2012, the couple were forced to move back in with Pratt's parents after their money ran out.
My advice: “Being prepared for the worst is a great idea but be realistic my fearful friend! Start to consider saving as one of your monthly essentials and include it in your budget planning. Having to move back in with your parents can be tricky, but sometimes it a good idea until you get back on the path to financial enlightenment.”
In the 2000s Nicholas Cage was forced to sell several properties and the IRS slapped him with a honking great $6.2 million tax lien in 2009. Blaming a bad financial advisor (not the fact that he purchased some islands in the Bahamas, multiple dinosaur skulls and not one but two albino cobras) and the credit crash, Cage couldn’t to pay his tax bill and sold the majority of his properties, including various castles in Europe.
My advice: “Remember to pay your bills on time and you won’t be hit with hefty late fees or damage your credit score. Make sure you always have enough money set aside for essentials as rent, utility bills, and cobra food and shop around for the best deals. It’s easy to put off facing your problems until they get out of control but, like an elephant in a bun factory, ignoring the problem is only going to make it worse!
Despite having eye-watering earnings of an estimated £300,000,000, when Mike Tyson declared himself bankrupt he owed £8.62 million to the IRS, £5.79 million to his ex-wife, £5.79 million in legal fees, £148,000 on pagers and cell phones, £264,000 on a birthday party, £5000 on care for his Tigers and £42,000 for limos.
The Guru says: “Most importantly, and I really can’t stress this enough my friend, don’t buy Tigers. However much they’re reduced you don’t need them and they’ll probably eat the dog. It doesn’t matter how much money you earn, you still have to live within your means. Much like the livid tiger living in the spare room, trying to keep up with fancy friends or family will come back to bite you. Remember, don’t be sucked in by what you see on social media, everybody’s life isn’t really that glamorous IRL. Don’t splurge on frivolous things every month and that will make the treats (and humble brags) even sweeter!”
Johnny is known for his quirky personality but apparently, his hedonistic lifestyle has caught up with him and the actor is currently in financial hot water after a pricey divorce to actress Amber Heard. Depp once spent $3 million to fire author friend Hunter S. Thompson’s ashes out of a cannon. That alongside other over-the-top splurges have resulted in the star of the Pirates of the Caribbean being a little strapped for cash. The actor is suing his managers, saying they’re responsible for his money woes but they claim the actor is low on treasure for the simple reason that he kept spending more than he was bringing in.
The Guru says: “His managers are wise my friend! Spending more than you are earning is a sure fire way to send bad karma your way. Go through your monthly bank statement and cut out anything you really don’t really need. Do you really need those new shoes, a coffee on the way to work or to shoot your friend out of a cannon? Probably not. These small changes are a great way to save money.
It’s easy to put off facing your problems until they get out of control. Fix the ‘easy wins’ first – try to consolidate debt into an affordable monthly repayment or compare the best balance transfer deals to make sure you are getting the best offers. Check out moneyguru.com to find more financial enlightenment.
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