Life Lessons from Failed Celebrities
Most people think celebrities like top movie stars, sportspersons, and pop stars don’t have to worry about money or frugality like the common people as they would have earned tons of money when they were at the peak of their careers. But is it true? Are you sure if all those famous and yesteryear celebrities are still leading a lavish lifestyle even today?
Why do you no longer hear any news about them? Or why do you hear the shocking news of some famous celebrities now bankrupt or in depression, drugs, or even committing suicide? For example, look at the rise and fall of some famous celebrities whose names you may have now forgotten,
Michael Jackson was a famous pop star who earned tons of money. But did you know but was $400 million in debt when he suddenly died in 2009? He also had to foreclose on his famous Neverland home. He could not even pay the salary of his employees. Reckless spending made him take loans, many of which he never paid back. MJ’s money problems got worse once he got involved in numerous expensive lawsuits.
Nicolas Cage was one of Hollywood’s biggest stars who was earning millions at the peak of his career. But he was also one of its biggest spenders. He recklessly purchased many homes, automobiles, and rare artifacts. The tax department fined him more than $6 million for failing to pay his 2007 tax bill. Cage’s risky financial situation made him sell many of his personal belongings, including a treasured comic book.
Mike Tyson was a heavyweight champion who earned hundreds of millions of dollars when he was at the peak of his career but ended with a $23 million debt. He declared bankruptcy, had to go to jail, and went through rehab before he again reached financial stability. By 2003, he owed tons of money to the IRS, British tax authorities, lawyers, personal trainers, financial managers, music producers, and several others.
Hangal was a famous actor in India. He had acted in 200+ films and was a well-known face of Indian cinema. However, even his fame couldn’t keep the hard times at bay. Late in his life he went bankrupt and couldn’t even pay his basic medical bills. Similarly, there are many celebrities in sports, films, etc., worldwide who have met the same fate.
Were you shocked by reading these examples? Now, why did such top celebrities fall badly even though they earned tons of money? What did they do (or not do) to enter such misery? Let us investigate. For example, we often read articles or see documentaries about how some street singers or actors became rich and famous due to their perseverance, luck, or the difficulties they faced before they became famous. But such information is just one side of their story. We never get to hear the second side of their story. Now, what is this second side? Let us explore.
The Success Mountain
Any success guru can give tons of advice on how to climb the difficult mountain called success. And depending on how you use their advice you may reach various levels of success. But very few success gurus can advise on how to protect yourself from the mighty treacherous winds that blow at various levels on that mountain. If you don’t have a strong grip at every step those winds will easily push you down. Or, to look at it from a different angle. The mountain called success has two staircases. The first staircase is called rags-to-riches and climbing this is difficult and tiresome. But after climbing this you will see another steep and enticing staircase called riches-to-rags. This staircase is a super salesman that keeps tempting and challenging climbers to enter it. It’s like a pied piper who attracts your fat purse and credit cards.
The key to remaining successful is not to succumb to its temptations and challenges and consciously stay away from this wretched staircase, which is a slope of no return. But very few people know how to stay away from this and the main reason why many celebrities fell down badly is they, knowingly or unknowingly, entered the second staircase often to show off to others. And once you enter this it’s almost impossible to go back. Now the reason why those celebrities failed as they entered the second staircase is described below.
Age-20 Years: Annual income — Five million dollars, luxurious lifestyle, fancy cars, mansions, advertisements, sponsorships, name, and fame.
Age-22 years: Annual income — Four million dollars, Dip in popularity starts.
Age-24 years: Annual income — One million dollars, rapid reduction in fan base, fame, and new opportunities.
Age-26+ years: Out of the limelight, forgotten by media and public, sporadic income, high debts, unable to maintain the lifestyle, bankruptcy, depression, drugs, domestic violence, etc.
This is how many celebrities in every country enter poverty.
Takeaways from their Examples
Now let us look at some takeaways from their stories. When top celebrities who earned millions can collapse it’s easy for normal people also to fall similarly. The game is the same. They lose millions and ordinary people lose thousands. The proportion is the same. This is why one should learn the art of frugality. If you don’t learn frugality you will enter poverty very soon.
Many people, especially salaried employees, make the mistake of drastically increasing their standard of living once they start earning more. Or they think that financial disasters, suicides, etc., only happen to some other careless people but not to them. This is because they assume that their credentials, knowledge, friends, and good deeds will keep them employed forever. But this is dangerous thinking. In today’s wild economy, you will never know when the axe will fall on your head. Today’s unpredictable economy, workplace headaches, travel, productivity nuisances, health, family issues, etc., can make even the most qualified employee unemployed. What if one door closes and another doesn’t open?
The problem is when income starts increasing people gradually increase their standard of living to keep up with the Joneses. But to maintain that higher standard of living we must constantly earn more and more money, which may not be possible for years and decades. So, ask yourself some tough questions like how you can afford a higher lifestyle for years and decades.
Ask where is the money going to come from. Ask whether you will have the same health and energy to earn more and more for the next 5, 10, or 15 years. If the answers shock you then start frugality now and cultivate a simple lifestyle that you can afford to live with for the rest of your life. You will never know when and how the wind will change direction in a couple of years. Remember, even mighty rivers and lakes dry up in some summers and don’t revive for years.
Save money for the future. Even if you suddenly get a lot of money due to a promotion or a stock market boom, don’t increase your standard of living based on a temporary financial windfall. Think long-term, very long-term, and then start the status climb.
Experienced financial consultants say you should always have enough money saved to cover at least six to nine months’ worth of expenses in case you lose a job or cannot work for any reason. Suppose you are earning $5000 per month and your monthly expenditure for the absolute essentials is $3000. Then, you should make it a habit to save the remaining $2000 every month. This way if you save for a year you will have $24,000 with you. Suppose you lose your job then this $24,000 will help you cover your monthly expenses for eight months, while you can look out for another job without going crazy.
Another mistake many salaried executives do is to think that retirement is far away and they need not worry about it till they cross fifty years of age. So, they lead a lavish life of purchases, vacations, eating out, etc., when they are young and earning well. But this is a dangerous mistake because time travels fast and retirement can hit you hard.
For example, have you ever imagined what it is to be old, retired, or have your monthly income drop to one-fifth or less than what you are earning today? Will you still be able to maintain the lifestyle you were accustomed to for many years? Do you or your family have the courage to instantly downgrade your life? But with frugality, you can get ready and be prepared for retirement from many years before.
Similarly, think of ways to save costs and create a lifestyle that you can afford to live with for the rest of your life.
Quotes by Famous People
He who buys what he does not need steals from himself — Swedish Proverb
Never spend your money before you have it — Thomas Jefferson
Do not save what is left after spending, but spend what is left after saving — Warren Buffett
A budget is telling your money where to go instead of wondering where it went — John C. Maxwell
You must gain control over your money or the lack of it will forever control you — Dave Ramsey
If we command our wealth, we shall be rich and free. If our wealth commands us, we are poor indeed — Edmund Burke
Beware of little expenses. A small leak will sink a great ship — Benjamin Franklin
He who knows how to be poor knows everything — Jules Michelet
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