I’m always amazed that making ridiculous amounts of money is no insurance against filing bankruptcy. In fact, it sometimes seems that the extremely rich are almost just as likely as the extremely poor to seek the protection of the bankruptcy courts, and after hearing countless news stories on celebrity bankruptcies, two things occurred to me:
• Bankruptcy is more about the lack of balance between income and expenses than it is about either of those in isolation.
• Being famous does not make anyone a good money manager!
The last few years have certainly brought unexpected challenges in money management to my fellow public employees and to me. So as we search for new ways to stretch a dollar, I thought we might benefit from some light-hearted encouragement via the follies of the rich and famous.
This list doesn’t delve into the inspirational stories of remarkable men and women who crashed early in their careers to later rise to great heights (Abraham Lincoln, Henry Ford, Walt Disney, etc.). Instead, it takes a look into the more entertaining examples of financial miscalculation. (Click on the photos to activate the slide show.)
-
- Randy Quaid: While famous for his roles in National Lampoon’s “Vacation” movies and “Independence Day,” Randy Quaid ran into money problems and filed bankruptcy in 2000 — ironically over a film called “The Debtors.” He subsequently got news coverage for all the wrong reasons, including some outrageous statements about a Hollywood conspiracy targeting him and his wife. Photo by Irkrichter, via Flickr
-
- Wesley Snipes: With starring roles in the “Blade” movies and “U. S. Marshalls,” Wesley Snipes’ main source of trouble stemmed from his failure to pay taxes beginning in 2000. In addition to filing bankruptcy, he was recently sentenced to federal prison. Hopefully he’s enjoying his interactions with the public employees who work at his correctional facility. Photo by Nicogenin, via Flickr
-
- Stan Lee: Apparently building a comic book empire and extending his franchise through television shows and movies wasn’t enough to keep Stan Lee from seeking bankruptcy protection in 2001. I guess his big hits (“Spider-Man,” “X-Men,” “Iron Man,” “Thor,” etc.) didn’t start making money soon enough – clearly he’s no super hero of finance. Photo by Gage Skidmore, via Flickr
-
- Donald Trump: The antithesis of the public-sector employee, the Donald is the champion of American capitalism. He’s achieved big things and taken big risks. The latter landed his businesses in bankruptcy court four times between 1991 and 2009. Maybe he should think about the benefits that federal bankruptcy laws have afforded to him the next time he decides to rail against “government intervention.” Photo by Gage Skidmore, via Flickr
-
- Elton John: Sir Elton established his career as a pop singer known as much for his lavish stage shows as the songs he writes and sings. Despite a successful transition to Broadway and films, Elton filed bankruptcy in 2002. Apparently, even the generous royalties that were rolling in couldn’t cover his over-the-top spending — $2 million per month of new debt, including $400,000 spent on flower arrangements. Sounds like Elton found out the hard way that his “Yellow Brick Road” was not literally paved with gold. Photo by David Shankbone, via Flickr
-
- Mike Tyson: In the two decades that Mike Tyson was fighting professionally, he made around $400 million — but today he lives from paycheck to paycheck. As parodied in the 2009 movie, “The Hangover,” he’s known for a wildly extravagant lifestyle, buying Bengal tigers, cars, and mansions like they were packs of chewing gum. His spending habits resulted in a declaration of bankruptcy in 2004. Photo by Birzer, via Flickr
-
- Willie Nelson: Willie Nelson is a living legend of country music who is as famous for his generous heart as he is for his song writing brilliance. His spending on friends he employed helped push him into debt that eventually caught up with him in the 90’s. Along the way, he racked up $16 million in unpaid taxes and the government seized many of his assets including his ranch in Texas. Never without a wry sense of humor, Willie recorded a special IRS CD to raise funds for repayment of his debts after filing bankruptcy in 1990. Photo by Rtilden, via Flickr
-
- Toni Braxton: Toni’s sultry vocals made her a huge R&B star in the early 1990’s, but by 1998, she’d filed for bankruptcy. As her recording career cooled in the 2000’s, she appeared on Broadway and TV’s “Dancing with the Stars.” These stints likely served as inspiration to pursue her own reality TV show which premiered in 2011 after she filed for bankruptcy a second time in 2010. We’re forced to conclude that sound money management is not on the list of “Braxton Family Values.” Photo by Burning Karma, via Wikimedia Commons
-
- Francis Ford Copolla: You may know Francis from his brilliant films (“The Godfather” trilogy, “Apocalypse Now”) or you may enjoy drinking wine from the Coppola vineyards, but you may not realize that he’s filed bankruptcy on three different occasions. Most of his financial woes have stemmed from his undaunted pursuit of artistic excellence at any cost and entangled business relationships set up to finance his films. Sounds like someone made him an offer he should have refused! Photo by C2-MTL, via Flickr
-
- MC Hammer: Who can forget the parachute pants and frenetic dance moves that MC Hammer brought to the stage? Those of us who were glued to MTV in the late 80’s can still sing and dance along to U Can’t Touch This, I’m sure. But Hammer got way too generous with his friends, employing a staff of 300 people and building a huge mansion. By 1996 with $13.7 million of debt and $9.6 million in assets, he had to acknowledge that it was “hammertime” for his finances and head to bankruptcy court. Photo by Brian Solis, Wikimedia Commons
So as you continue to strive for balance in your financial income and outgo, take all you can from the disastrous experiences of these very public figures. Bottom line: Excess comes with a hefty price tag.
Thanks for the post, and it’s a shame to see all of these awesome people especially Wesley Snipes file for bankruptcy. And hopefully they’ll all be able to learn from their mistakes. And it seems that some of them already have.
That’s very interesting. I wonder what the top ten celebrity bankruptcies in Canada are. Thanks for the article.