Hollywood is enjoyable to watch because it is obscene, the megalomaniac egos conflicting, the big crazy houses, the tordid affairs and scandals. Yet among all these distractions, few things are as obscene as a famous actor’s/actress’s paycheck. When you’re making 10’s of millions of dollars from a single movie, album, or show, most everyone would think rightly “I’m gonna make this last.” Here’s some famous examples of people who somehow managed to botch that.
5. 50 Cent
In 2015 50 Cent made Forbes “Hip-Hop’s 5 Wealthiest Artists” list, with an estimated net worth of $155 million. He came in 4th place behind Jay-Z, with an estimated $550 million.
The surprise here is that the lion’s share of 50 Cent’s wealth didn’t come from his music. Most of his fortune is due to Vitamin Water, when the brand’s parent company was sold to Coca-Cola in 2007 for $4.1 billion, he earned a cool $100 million. The rapper also has stakes in a diverse number of other businesses, including SK Energy, Effen vodka, Frigo underwear and SMS headphones.
In this most recent year, 50 Cent’s fortunes have come under heavy fire. In addition to filing for personal bankruptcy after a scandalous lawsuit, the rapper’s boxing promotions company, SMS Productions, filed for bankruptcy a few months ago, due to personal differences and broken promises with Floyd Mayweather.
Trouble in Paradise
On July 21, the rapper appeared in a Manhattan state Supreme Court to discuss further the lawsuit stemming from a “personal tape” that he leaked to the public. At this hearing, he testified about his business and personal wealth.
50 Cent told those gathered that he’s not as rich as he might seem. “Those cars were rented,” he said. “It’s like music videos. They say action, and you see all these fancy cars, but everything goes back to the dealership.” He also said he borrowed his rings and chains from the jeweler. “The hip hop culture is aspirational,” he said. This confession seriously damaged 50 Cent’s glitzy persona.
50 Cent even went so far as to say his net worth ISN’T a whopping $155 million, as reported by Forbes. Instead, 50 Cent said his net worth is just $4.735 million and that he made only 10 cents for each 38 million albums sold. 50 Cent’s lawyer, James Renard, reportedly told the jury that the rapper also has unpaid debts, and his bank account is nearing $0.
“That’s the current financial condition, and we believe that’s very important with respect to the assessment of any damages,” said Renard.
Whether this is a smokescreen for 50 Cent to erase some existing debts or whether the bulk of this is true, one thing is clear. 50 Cent has drastically and horribly mismanaged his personal finances.
4. Kanye West
Kanye West recently joined the celebrity debt club with a splash when he announced on Twitter that he was $53 million in personal debt. He still posts a net worth of $145 million, but the implications of West’s debt might change that number soon.
West blames his massive debt on his failed attempts to break into the fashion industry. This is a plausible factor. His 2009 fashion label Pastelle failed to take off, as did his high-end line called “Kanye West.” Apparently the market did not appreciate his modesty.
So what was Kanye’s plan for digging himself out of the hole he dug himself in (no doubt in large part due to his extravagent lifestyle and outlandish spending)? He tweeted Mark Zuckerberg, asking him for $1 BILLION to “invest in Kanye West ideas.” This is dead serious.
Thankfully for Kanye, his wife is pretty well-off, too. Kim Kardashian in response Tweeted she was “busy cashing my 80 million video game check & transferring 53 million into our joint account.”
So, for the time being, one of this list’s most famous squanderers will survive to see another day.
3. Mike Tyson
Once the youngest heavyweight boxing champion in history, Mike Tyson broke his winning streak by filing for bankruptcy 17 years later. The man had two decades of boxing titles, making over $400 million under his belt, and yet STILL couldn’t control his personal finances. Tyson actually had managed to rack up a $23 million DEBT by the time he filed for Chapter 11 bankruptcy in 2003, including $13.4 million to the IRS, according to The New York Times.
Tyson wiped out his massive boxing earnings like so many famous celebrities do. He spent it all on luxury purchases like cars, jewelry, mansions, and motorcycles. That Siberian tiger gag from “The Hangover”? Yea, that was inspired by his real life purchase of a Siberian tiger. Divorce, lawsuits and criminal charges also took their toll on his wealth.
After the dust cleared and his bankruptcy, tax bills and other debts were settled, Tyson was left with a net worth of $3 million. This may seem like a successful pull-out after a nosedive, but how sad that someone managed to let 99%+ of their (literally) hard-fought fortune just blow away, all due to financial mismanagement.
The former champ appeared on “The View” where he told the hosts he was living paycheck to paycheck but had found happiness with his third wife. “I’m totally destitute and broke,” Tyson said. “But I have an awesome life.”
I wish this was a happy ending to a sad tale; unfortunately his spending habits give us every sign his woes might continue. He recently dropped $2.5 million on a new mansion in Las Vegas — even though his old home was still for sale right down the street, according to news website Vegas Inc.
2. Willie Nelson
Willie Nelson created the “outlaw country” music genre practically by hand in the 1960’s. By the ’80’s, he was a real outlaw — from the IRS’s perspective. For most of the 80’s, Nelson funneled his income into a tax shelter that was later deemed illegal by their agency. His total tax bill totaled $16.7 million in the end, and the government began systematically seizing all of his assets in 1990. They even took his famous ranch away from him. Nelson eventually helped settle the debt by releasing a compilation album The IRS Tapes: Who’ll Buy My Memories? The revenue was enough to slate the IRS’s thirst and get himself back on his feet. Willie was able to keep his head up throughout, saying, “I had a lot of things I owned, I needed to get rid of,” he said. “I had a lot of people around and needed to back off and stop supporting half the world so I could stop and look at my situation. It’s given me time to take inventory.” If only someone had been around to show him that tax shelter was not a good idea (or maybe instead, to find him a legal one.)
1. Charlie Sheen
Former star of the successful CBS sitcom “Two and a Half Men,” Charlie Sheen has gone from a staple of prime-time tv to one of the best cases of celebrity implosion in all of Hollywood’s sordid history. Despite his $150 million net worth, the actor is reportedly $12 million in debt, citing mortgages, legal fees and taxes as the main sources. Sheen also has a very expensive child support regime keeping him down. Sheen allegedly has to pay support for his 6-year-old son to ex-wife Brooke Mueller to the tune of $55,000 a MONTH.
When he first left “Two and a Half Men”, Sheen claimed that his income dropped from $613,000 a month to an estimated $87,834. It is anyone’s guess what that figure might look like now. He has reportedly sold a number of mansions recently (begging the question why he had so many personal properties in the first place.) Times have been so desperate that he even sold his profit participation rights to “Two and a Half Men”!! Reportedly the rights sold for $26.7 million.
Besides mortgages and taxes, Sheen said he also has to pay medical expenses not covered by insurance, costing an estimated $25,000 per month.
What Can Be Learned?
There is NO alternative to good financial advice and guidance. Not even vast personal wealth can replace proper management. If anything, accruing massive stores of personal wealth without the proper guidance seems to INVITE the Four Horsemen of the Financial Apocalypse into people’s lives sooner. Despite their flaws, every person on this list worked very hard for decades to earn their money. As amusing as it appears at first blush, how very sad that they cannot pass on very much to their children, that they cannot enjoy the lifestyle they had earned for the rest of their lives, all because they never sought proper guidance and sound advice. Splurging from time to time can be fun and healthy, splurging as a lifestyle leads to a lifetime spent penniless wondering “What could have been?”
If you haven’t lost 95% of your net worth over a matter of years, you’re doing better than most people on this list. Take the next step and contact a Dynamic Wealth financial advisor today, flesh out your plan together, and rest easy.