by Mr. Jay
1. Lack of a Financial Education
Often, when you go from having nothing to having everything, a financial education is not part of the package. Learning how to save, budget, and invest can take years, and if you’ve never had substantial money before, you may never have learned these essential financial management skills. When handed huge checks or cash, many celebrities go out and buy the biggest house and fastest car they can find, rather than learning how to properly handle their money.
2. Materialism
Our culture is highly materialistic, and often creates a mentality that encourages people to try to belong. This they do by buying larger houses, more expensive vehicles, and the latest in fashion. However, this can lead to very costly behaviors that cannot be sustained.
Celebrities, like the rest of us, can get caught up in having the finer things in life. No one can blame them, but when the paychecks stop rolling in, it gets harder and harder to maintain that same standard of living.
3. Lack of Investment in Themselves
Many celebrities surround themselves with attorneys, accountants, and insurance professionals to help them with proper estate, tax, and insurance planning. However, in doing so, they often do not bother double-checking the work that is being done on their behalf, nor do they properly vet the financial professionals they hire. Not surprisingly, many fall prey to dishonest advisors.
Worse yet, some celebrities are taken advantage of by friends and family who they hire to manage their affairs. Unfortunately, greed can sometimes get in the way of these relationships.
4. Wrong Career Longevity Expectations
It might be easy to expect a successful career to continue indefinitely. But sadly, not all careers go on the same till eternity. Living high on the hog while having all that cash is fun, but only the while it lasts!
It is mostly the younger billionaires that goes broke.