Brian and Bo run through money mistakes that celebrities have made and give you some advice on how to correct or avoid making the same mistakes yourself.
Here are a few other major celebrity mistakes:
Heath Ledger: did not have his girlfriend or their daughter listed in his will. So, the key takeaway is to make sure that you revisit your wills every few years or after significant life changes.
Kristen Bell: had a property in California go through foreclosure in 2012 and was auctioned off for $500,000 less than she paid for it. Make sure that you are keeping up with old properties and assets, taxes and upkeep can have a greater impact than you may imagine. Make sure that housing expenses do not exceed 25-28% of your gross income, so you do not get in over your head.
Katy Perry and Madonna: do not seem to understand marital assets. Madonna lost tons of money to Guy Ritchie in their divorce. Katy Perry could have lost half of her fortune when she divorced Russell Brand after a year of marriage during which she made $44 million. Luckily, for Katy, Brand is wealthy enough (apparently) and did not pursue his claim to her fortune. Make sure that if you have assets, or plan to acquire significant asset post marriage, you have a disaster plan. It also helps if you know the laws that govern marital assets in your state.
Lionel Richey: failed to pay the IRS, and was assessed a $1.1 million tax bill in 2012 for income earned in 2010. Other celebrities that have had run-ins with the IRS: Nicholas Cage, Hank Williams Jr., and Wesley Snipes. Get behind on any other bill and lose access to that utility. Get behind with the government and you need to be prepared to lose assets.
Larry King, Kevin Bacon, and Kyra Sedgwick: got in too deep with complicated investment schemes and ended up losing a decent chunk of money. Larry King had a viatical deal go bad. Kevin and Kyra invested with the infamous Bernie Madoff. Reference our “Bringing Simple Back” shows. Key to remember – keep it simple. If it is too good to be true, then it is probably too good to be true.
On a more positive note:
Warren Buffet: it took Warren 50 years to accumulate an astonishing $700 million. Since then, over the course of his last 33 years, Warren has amassed a whopping $60 Billion more. Which is insane, but what if Warren started with more earlier on? That is basically where Lebron James seems to be. It should be no surprise that the two have a great relationship, and Warren occasionally looks over the King’s financial statements. Lebron has also taken a few steps to project him toward billionaire status. He has a minority position in Liverpool FC, a small stake in Beats Audio, and also has his own marketing company, all while working to become the richest person in the world. Here is a quick article about the two.
Barbara Corcoran: has overcome multiple setbacks and rejections while building her empire. She even faced rejection while trying to become a host on The Shark Tank on ABC, after already selling her own business for $66 million. Never taking no for an answer has worked well for Barbara. Read about her story by clicking here.