They may be rich, famous, and talented. But that doesn’t mean your average celebrity knows any more than you about money — or specifically how to manage their finances. You’ve heard the phrase, “More money; more problems,” and when you see some of the struggles celebrities have with their windfalls upon becoming famous, it’s hard to disagree.
Still, you’d think some of these people would be able to afford some help by hiring an adviser. But remember, not everyone is looking out for their client’s best interests. And the more you have, the more you have to protect — even from family and friends.
We all make mistakes with money, though, and celebrities are no different. Whether it be a bad investment, getting caught up in a con man’s scheme, or simply spending way too much, even the rich and powerful can end up bankrupt. Just look at these examples, and you’ll see for yourself.
1. Bernie Madoff (with these celebrities’ money)
Most of us are well versed in the Bernie Madoff saga. Madoff engaged in a long-running Ponzi scheme in which he pilfered money from many people. And there are some well-known celebrities among them. As for some of the more famous names, Kevin Bacon and his wife Kyra Sedgwick are near the top, along with Steven Spielberg, John Malkovich, and Zsa Zsa Gabor.
But celebrities aren’t often swindled in groups. Some simply make bad business decisions all on their own, such as former boy-band members.
2. Justin Timberlake buys Myspace
If you mentioned Myspace these days, you’re likely to receive a bunch of blank stares from the under-30 crowd. For those who do remember it, Myspace was the precursor to Facebook. It fizzled unceremoniously soon after Facebook took off. That didn’t stop Justin Timberlake from purchasing a stake in it, however, in 2011 for $35 million. He later offloaded his shares in 2015 for $1.
A bad investment is one thing. But how about racking up half a million dollars in overdraft fees?
3. Toni Braxton’s overdrafts
Millions of Americans don’t use banks specifically because they don’t like getting hit with fees. Overdraft fees are one of the most feared, especially when you’re living paycheck to paycheck. It’s hard to wrap your head around how singer Toni Braxton managed to rack up half a million dollars’ worth in overdraft fees in 1997. Braxton was a Grammy winner and had sales in the hundreds of millions, but she still couldn’t stay out of trouble with her bank.
Another poor financial decision? Not paying your taxes like one famous on-screen vampire.
4. Wesley Snipes doesn’t pay his taxes
Back in the ’90s and 2000s, Wesley Snipes was a bona fide action movie star. He had hits, such as the Blade series, which made him a household name and earned him a lot of money. Unfortunately, he didn’t give the government its due and ended up going to federal prison for failing to file tax returns in 1999, 2000, and 2001. All told, he owed the government $7 million and was sentenced to three years in prison. It was an expensive mistake and one that cost him three years’ of potential earnings, too.
Another famous star became a little too fast and loose with his cash. Case in point? He started buying dinosaur parts at a premium.
5. Nicolas Cage buys a dinosaur skull
Nicolas Cage is a lot of things. Rich is one of them, as he keeps cashing monstrous paychecks for movies that leave a lot to be desired. (Left Behind? Knowing?) He evidently spent a bit too much, too. At one point, Cage decided to spend nearly a quarter of a million dollars on a tyrannosaurus skull, which he eventually had to return as it had been stolen.
At least he can still find steady work, unlike a certain Olympic swimmer.
6. Ryan Lochte’s antics cost him big
Remember Ryan Lochte? He’s the Olympic swimmer who, during the 2016 games in Rio, was caught up in a lie about a roadside robbery. He’s quickly faded from memory, just like his endorsement deals quickly faded from the books. Lochte’s lie cost him considerably, and because he participates in what you might call a “non-revenue” sport, it’ll be hard for him to capitalize off of his swimming career in the future.
Lochte, however, isn’t the only athlete to tarnish his name through foolish antics.
7. Michael Vick tarnishes his name
If you were a rich and famous athlete, why would you stoop to dog fighting as an extracurricular activity? That’s something we might never understand about Michael Vick, who shot his NFL career in the foot. Though Vick did eventually making a comeback after working through the legal system, the amount of money he lost — in legal fees and lost earnings during his prime playing years — has to be staggering.
Next, a celebrity who took on currency as his moniker comes to the realization he has none left.
8. 50 Cent lives (too) large
Like Michael Vick, there was a time where 50 Cent (Curtis Jackson) was on top of the world. He had hit records, was in movies, and even had his own video games. But he lacked one important thing, evidently, and that was financial discipline. At one point in 2015, 50 Cent declared bankruptcy after he made several mistakes and was caught up in some petty beefs. He’s gotten back on his feet but not after learning some very expensive lessons.
Next up, the best of intentions aren’t always enough to save your investments.
9. Derrick Coleman’s Detroit investments
Back in 1990, Derrick Coleman was the top overall draft pick in the NBA. Coleman had a moderately successful career, which spanned until the mid-2000s when he retired after spending time with five different franchises. After retirement, Coleman decided to invest his time and money in Detroit — right before the financial crisis hit with full force. It’s unfortunate, but Coleman took a huge hit as housing values sank (particularly in an already economically depressed area). He had good intentions but ended up filing for bankruptcy in 2009 after blowing through $89 million.
Coleman is hardly the only athlete to blow through is earnings in short order though.
10. Mike Tyson also lives (too) large
Many of the celebrities on our list like to live large and beyond their means, and Mike Tyson is among them. Tyson earned an obscene amount of money in his prime but blasted through his $300 million fortune and filed for bankruptcy in the early 2000s. He also ended up going to jail on drug charges for a time. Part of the problem was that Tyson, who grew up poor, was surrounded by people who were taking advantage of him, and he didn’t realize it.
Next, we explore one of the biggest real estate busts imaginable perpetrated by none other than Beyonce.
11. Beyonce buys a closet
The Great Recession and financial crisis hit a lot of people hard, and even Beyonce can’t say she escaped unscathed. In fact, on one Miami beach condo she purchased, Beyonce ended up taking a 75% loss. In 2002, she purchased the 195-square foot property for $465,000. Later, in 2011, she sold it for a mere $110,000. That’s quite a big loss for so small a space.
Hey, at least she didn’t purchase an entire town like another celebrity did. Right?
12. Kim Basinger buys a town
That celebrity was Kim Basinger. In 1989, Basinger and some partners purchased more than 1,700 acres in Braselton, Georgia. A Georgia native, Basinger’s plan was to turn the small town into a tourist attraction. Things didn’t go as planned, and she eventually sold the town in 1993 for $1 million. In the end, she lost $19 million. And Basinger was also one of the many celebrities who fell victim to Bernie Madoff.
Having an entire town flop is one thing. But how about a restaurant chain fueled by movie stars?
13. Planet Hollywood’s celebrity investors
Remember when Planet Hollywood was cool? It still exists, in some form, but it’ll likely never reach the level of coolness it had in the early 1990s. Planet Hollywood, at that time, was destined to become a restaurant chain, each location filled with movie props and other memorabilia. Many celebrities backed the venture, including Sylvester Stallone, Bruce Willis, and Arnold Schwarzenegger. Despite early success, the chain has whittled away with time. Only a few locations remain open.
Perhaps a Planet Hollywood in Edmonton was a bad idea. But was it as bad as investing in a redundant technology?
14. Bono’s bad investment
Before there were smartphones, there was something called a PalmPilot. And somehow, U2 singer Bono ended up taking a huge loss on his investment in them. At one point in the early 2000s, Bono owned up to 30% of Palm Inc., which produced the PalmPilot. Then, of course, smartphones happened, and the PalmPilot became redundant. In the end, the bad investment cost Bono up to $140 million.
We’ll finish off with Shaq, who’s made a lot of money but taken some hits along the way.
15. Shaq takes a bath
In his heyday, Shaq was known for crashing to boards. Unfortunately for him, the housing market crashed his home’s value. In 2009, Shaq sold his Miami mansion at a loss of $3 million for $16 million. It was initially listed at $32 million, but the buyer got away with paying half of what Shaq wanted. Considering Shaq once spent $1 million in 45 minutes, a $3 million bath isn’t all that bad.