When we think of how much money celebrities make, it seems unfathomable that they could ever go broke. However, many of them do. Some make bad investments while others think they can spend limitlessly…until they end up overspending.
(I wanted to write this article to show you that yes, even rich people can eventually go broke if a business deal goes bad or their wealth is mismanaged. I’ll reference the articles where I pulled this information at the bottom of the page.)
However it may happen, many celebrities end up going broke. If you are still having trouble wrapping your head around it, read on to find out more.
Mike Tyson was one of the most successful boxers making in close to $30 million dollar a fight at the peak of his career. However, even though Tyson made large amounts of money, he sure knew how to spend it. Jewelry, mansions, limousines, cars, cell phones, parties, clothing, motorcycles and even Siberian tigers were some of the things that contributed to his debt.
Tyson also had a lot of legal expenses due to run-ins with the law and a multi-million-dollar divorce. He was also battling former manager Don King who he claimed had bilked him out of millions of dollars. However, his largest debt was a $17 million dollar tax debt he owed to the American and U.S. governments.
In 2003, Tyson filed bankruptcy to get out of over $27 million worth of debt. Fortunately, since then, Tyson has had several money-making opportunities to make up for his losses. He got sober in 2013 and he has been living a more responsible lifestyle ever since.
Johnny Depp is an actor that likes to live large. However, when he found himself in deep financial trouble, he turned against financial managers, The Management Group, saying they were the ones to blame.
Depp sued the group for negligence, fraud, breach of fiduciary duty and more. He claimed the company, who acted as the actor’s debt, tax and legal advisors from 1999-2016, collected contingent fees of $28 million dollars that he never agreed to. He also claimed they neglected to pay his taxes on time resulting in a $5.6 million tax bill. In other allegations he accused them of paying $10 million of his money to third parties without his authorization.
As a result, Depp fired the company and sued them hoping to collect at least $25 million.
The company shot back with their response claiming that there was no one to blame for Depp’s financial circumstances but Depp himself. The actor reportedly lives a $2 million dollar a month life style. He has spent $75 million on residences, $18 million on a luxury yacht and $30,000 a month on wine.
Although there is no saying who was right and who was wrong, the case did eventually come to a settlement in 2017 saving everyone involved from a potentially embarrassing legal battle. Meanwhile, though we don’t know exactly what Depp’s financial situation is today, we are pretty sure he still lives pretty luxuriously. The many legal battles he is facing don’t seem to be helping any.
Willie Nelson is a country star who managed to get relief from the taxes he owed in a very original way.
In 1990, the IRS almost seized all of Nelson’s properties and assets because he owed $16.7 million in back taxes, penalties and interest.
Instead of filing for bankruptcy, Nelson worked with his lawyers taking a very unique approach to settling his bills. He made an album called “The IRS Tapes: Who Will Buy My Memories?” All proceeds of the album went to the IRS. He also auctioned off a good deal of his memorabilia to help pay his bills.
Nelson claimed that the reason for his financial debts was largely due to supporting other people. He reportedly told those people to “back off” and he was optimistic throughout the ordeal.
The singer was able to resolve his financial situation and was debt free by 1993.
Michael Vick was a gifted NFL quarterback and had the honor of being the first African American football player to be first in the NFL draft. However, things quickly fell apart for the athlete.
Vick’s spending habits largely contributed to his downfall. He reportedly supported friends and family members lavishly buying his brother a new car for his birthday every year. He also made poor investment decisions including a $1.6 million dollar bet with a business partner who ended up spending the money to inflate his salary.
Another factor on his road to ruin is Vick’s infamous dog fighting scandal. When it was found that the athlete was involved in illegal dog fighting activity, it affected his earning power considerably.
What put a nail in the coffin was a former manager looking to collect payments over a contract dispute. Vick settled with him shelling out $4.5 million before declaring bankruptcy in 2008.
Although he had a few job opportunities after that, he ended up retiring at the end of the 2016 season.
Born Curtis James Jackson III, 50 Cent was of the hottest rappers in the industry. He sold 30 million albums and received many Grammy and Billboard awards. At one point, he was the second highest earning rappers second only to Jay-Z.
Jackson liked to throw his money around. In addition to living a lavish lifestyle, he also invested in several businesses, some more successful than others. He also faced some legal issues, one involving a sex tape featuring a rival rapper’s girlfriend. He lost a lot of money when he was sued for stealing the design of one of the products he helped launch and was forced to pay $18 million in legal fees.
In the meantime, his career was on the decline and he ended up owing $20 million in liabilities for $15 million in assets.
In 2015, he declared bankruptcy in an attempt to restructure his financial situation. Unfortunately, he lost much of his fortune in the process.
Wealth and fame come with their share of benefits, but the mismanagement of money can lead to an enormous downfall. Hopefully the experiences these stars have gone through will serve as a lesson for those who come next.
Many people may be shocked to find out that our very own president had to declare bankruptcy…six times in fact, between the years of 1991 and 2009.
Most are well aware that, before Trump became president, he was a real estate mogul. He inherited his real estate business from his father who started off running single family homes but expanded to own large apartment complexes, casinos, luxury residences, resorts and golf courses.
Unfortunately, there was a major real estate turndown in the early 90’ that spanned into the mid 2000’s. As a result, many of Trump’s businesses filed bankruptcy.
The most devastating was the Trump Taj Majal that acquired high interest debt to the tune of $3 billion in the first year. Other Trump Hotels and Casino Resorts were over 1.8 billion in debt when they filed for bankruptcy.
However, the bankruptcies did not affect Trump’s personal lifestyle much as he did not personally guarantee the loans in question. Today he makes a point of making lower risk arrangements so it is unlikely he will need to file bankruptcy in the future.
I got my research for this article from the following sources: