More Money, More Problems? Why so Many Stars have Fame but Can’t Handle Their Money…
Rapper and Grammy-winner Curtis James Jackson III, aka 50 Cent, filing for bankruptcy left many people worried, even though he/ sold more than 30 million albums throughout his career. If he resorted to bankruptcy, how do others make ends meet? 50 Cent’s story is not unique. Musical artists, film actors, athletes, models, television stars, and other famous faces routinely file for bankruptcy. Even successful celebs run into financial problems if they spend beyond their means, despite their huge incomes.
Spending More Than They Earn
A high-profile Hollywood money manager confirmed most celebrities failed to live within their means. Major monetary problems for Hollywood elites, arise from divorces, impossible career goals, and even private jets. Rapper M.C. Hammer frivolous squandered away his $33 million fortune and filed for bankruptcy in 1996, by overspending. In 2012, former NFL star Warren Sapp reportedly owed more money to his creditors than his entire net worth, and had to declare bankruptcy. Supermodel Janice Dickinson filed bankruptcy in 2013 with one million dollars in debt.
Many celebrities refuse to file bankruptcy but rake up huge bills. For people in the public spotlight, the pressures to appear living the high life, are incredible. America’s fixation on celebrity culture puts household names on a pedestal, but making it doesn’t mean your money troubles vanish. In 2011, 50 Cent showed off his three Ferraris during a TV show to show off his massive wealth, but the cars were borrowed for the show from a private car collector.
Film Actors really need good financial planning
When it comes to Hollywood film stars there is no middle class. Film studios scrounge to meet salary demands of celebs, while others get nickels and dimes. The Screen Actors Guild reports a minimum daily pay rate of $842 for actors on a film but extras make only a minimum of $148 per day. Although making more than $40,000 for a single film, it is inadequate to live the life of Hollywood royalty with astounding unemployment rates for actors and actresses. It was said that in 2013, the unemployment rate stood at 31.8%. The Screen Actors Guild or SAG as we know them, reports that on an average, actors earn 52,000, yearly. The blunt truth is that fame doesn’t seem to always spell riches, and the money is very short-lived.
Professional Athletes don’t do it any better
A 2009 study of athletes found that within two years of retirement, more than 75 % of former NFL players filed for bankruptcy while NBA stars fared better, as only 60% experienced money trouble within five years of retirement. Forbes estimates that the average American 401k balance at age 65 is only $25,000. As per the World Bank figures, an American’s estimated life expectancy is now over 78 years, 65-year-olds have less than $2,000 to spend annually for their remaining years. The problem isn’t about athletes earning during their careers, it’s about their careers being very short.
When a Temporarily High Salary Doesn’t Last
Professional athletes start at 20 and retire at 23, and must make $500,000 last for 58 years while NBA players start at 20 and retire at 25 with much better prospects, approximating $425,000 per year to last for life. Kobe Bryant exceeded $30 million during the 2013-2014 season, but most players earn the league minimum $490,180 which is fabulous compared to the median American income at $41,704 for 2015. However, if employed only for five years, it’s essential to have a post-retirement job lined up.
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