Celebrities have captured the attention and imagination of regular folks for over a century. We tend to measure our own success and build our dreams based on how we see famous people living. But, the truth is that fame doesn’t always mean vast wealth.
There are plenty of celebrities that may appear to be living the high life, but in fact are struggling with finances. How does this happen? When you are in the public eye, many celebrities can get caught up in the rush of new money and keeping up the illusion of having money to spend.
For us non-famous folks, struggling with money can mean taking out a payday loan or tightening the budget belt, but for celebrities it can mean losing everything in a minute. There are some lessons to be learned here. You may come into some money one day, with or without the 15 minutes of fame. Let’s take a look at some of the most common mistakes that stars make that can have them poorer than where they started.
Rags To Riches Syndrome
Many celebs come from very modest means. When they hit the big time, the money rolling in can be overwhelming. The temptation to live and spend big can be hard to resist. Add to that the sudden change in their social circle, and in no time at all, new stars can find themselves rubbing shoulders with the rich and famous. The need to live up to those kinds of financial standards can be intense.
When wealth and fame come quickly, many stars may overestimate the power of their 15 minutes of fame. It may feel like they will be famous forever, when in fact they could end up being a flash in the pan like so many other minor celebrities. The public can be fickle, and the hottest thing today can be old news tomorrow. Assuming that the money will just continue to roll in is a common mistake for new stars.
Poor Money Management
Living the celebrity life can be busy and chaotic. For people that aren’t familiar with the ways of the famous, it can be easier to let someone else deal with the finances. This is a mistake that has cost many celebrities dearly. When checks are being signed and money is being managed without any sort of monitoring, it is no surprise that many stars are shocked to learn that the money has run out.
For many upcoming stars that have come from modest means, they have no real life experience in wise money management. That lack of experience and naive trust in advisors are what end up putting many in financial ruin.
Bad Investments
Opening your own restaurant, putting your name on a liquor brand or partnering with a designer to create your own clothing line are all celebrity standards in investing. Just because the fame is there today, doesn’t mean that the name will be able to support a brand long term. When money is no longer an issue, stars can tend to make unwise and spontaneous investments that are too risky.
It’s not uncommon when someone comes into money that family and friends start asking to borrow money. In many cases, personal loans are what can drain a celeb’s bank accounts faster than any other bad investment.
Divorce
Celebs that are married before they make it big can be at risk of losing everything in a divorce. As lives change quickly once celebrity hits, often marriages can dissolve just as fast. Although divorce can be expensive for anyone, stars that were married prior to their fame are less likely to have a prenuptial agreement in place. This means that their spouse is entitled to at least half of everything accumulated during the marriage.
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