Are most celebrities (particularly actors) good with their finances?

[Anonymous]

I’m not talking about influencers. It seems that the UMC is better at managing money than some very high income folks.

[Anonymous]

Celebrities are TERRIBLE with their money.

[Anonymous]

Their agents usually have staff to help actors/sports people manage their $$, and hopefully get them to actually save a little bit. But they are grown-ups so you can't force them into IRAs.

[Anonymous]

Ha, no! Don’t you remember all those celebs getting scammed by Madoff a few years ago?

[Anonymous]

Anonymous wrote:Ha, no! Don’t you remember all those celebs getting scammed by Madoff a few years ago?

Plenty of non-celebs fell for Madoff too.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Ha, no! Don’t you remember all those celebs getting scammed by Madoff a few years ago?

Plenty of non-celebs fell for Madoff too.

Sure, but the topic of this thread is whether celebs are particularly good with their finances. The answer is no, aka “stars—they’re just like us!”

[Anonymous]

Anonymous wrote:I’m not talking about influencers. It seems that the UMC is better at managing money than some very high income folks.

Generally not, it seems. I think that’s less about them being very high income and more about the fact that a lot of actors (and musicians) become super rich at a very young age. Most people who become a millionaire by their mid-20s probably wouldn’t manage that money well.

[Anonymous]

From what I've heard, no! For a variety of reasons:

1) they are creative people and are uninterested in the details of finance.

2) their pay arrangements are pretty complex and not just your average annual salary. If they write a song, they earn money through royalties. For other things, it's all individually negotiated contracts where pay arrangements may vary widely. You have to be pretty good at understanding contracts to understand how you're getting paid and and what. You may end up responsible for certain expenses that you weren't aware of. You have to give cuts to your agent or manager and other people and that adds up.

3) you can hire people to manage your finances but there are a lot vultures out there looking to swindle rich celebrities. Heard lots of stories of celebrities thinking they had a lot because their financial manager said they did and they spent wildly and it turns out their financial manager was terrible at managing it and lost it all.

[Anonymous]

NO! So many of them are broke.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Ha, no! Don’t you remember all those celebs getting scammed by Madoff a few years ago?

Plenty of non-celebs fell for Madoff too.

+1 Including the owner of the Mets who one would think would be a savvy businessman.

[Anonymous]

A lot of rich people are bad with money.

[Anonymous]

The smart ones hire a reputable firm to handle it for them. My BIL (MBA, CPA, decades in the industry) handles musicians and is conservative with their money.

[Anonymous]

Nicholas Cage. Enough said.

[Anonymous]

Anonymous wrote:From what I've heard, no! For a variety of reasons:

1) they are creative people and are uninterested in the details of finance.

2) their pay arrangements are pretty complex and not just your average annual salary. If they write a song, they earn money through royalties. For other things, it's all individually negotiated contracts where pay arrangements may vary widely. You have to be pretty good at understanding contracts to understand how you're getting paid and and what. You may end up responsible for certain expenses that you weren't aware of. You have to give cuts to your agent or manager and other people and that adds up.

3) you can hire people to manage your finances but there are a lot vultures out there looking to swindle rich celebrities. Heard lots of stories of celebrities thinking they had a lot because their financial manager said they did and they spent wildly and it turns out their financial manager was terrible at managing it and lost it all.

Good summary. See, also, professional athletes (who also generally have a very short earnings window).

There are exceptions. Jimmy Buffett decided early on that his music career wasn’t going to last, so he started to build his “Margaritaville” business. He’s now worth anywhere from $600 to $900 million (depending on which source you believe). Roger Staubach is the richest former NFL player, but he made all of his $600 million in the real estate business (interestingly he got his start in the late ‘80’s recession). They are the exceptions because they focused on managing their own finances and didn’t just depend on their original source of income.

[Anonymous]

Jessica Simpson has done very well.