Rss Feed
Tweeter button
Facebook button
Reddit button
Delicious button
Digg button
Stumbleupon button

What We Can Learn from Pamela Anderson and Other Celebrities in Financial Trouble – Part 1 of 2

{ Posted on Apr 18 2010 by Marcus Alston }

The main stream media recently reported that Pamela Anderson is facing financial hardship and potential bankruptcy. For many of us, we find it hard to believe that celebrities are struggling financially since they appear to be so wealthy and to make so much money. In some cases neither of these beliefs are actually true. Celebrities are often put up in lavish housing by their image consultants to make them appear glamorous and wealthy. There is tremendous pressure to appear like you make a lot of money and are wealthy. For those who actually make a lot of money and get caught up trying to keep up the image of a rich life style by trying to actually live it, this is a short cut to the poor house. Just ask Nicolas Cage.

Various sources report that Pamela Anderson owes contractors over $1 million in unpaid labor and materials for renovations she is having done on her house. She also reportedly owes about $500,000 to the State of California in back taxes, interest and fees. This is after making millions from Baywatch and various movies, and other televisions shows.  She is attempting to re-energize her career with an appearance on Dancing with the Stars. She’s also involved in a 83 unit $50 million waterfront condominium project in California that has stalled. Uh oh.

Kate and Jon Gosselin of Jon & Kate Plus 8 fame divorced in April 2009 and were also reportedly broke after making over $3 million a year from TLC. The show ended November 23, 2009. Kate appears to be continuing to work hard to support herself and the couple’s 8 children. She is currently on Dancing with the Stars, hawking a new book entitled I Just Want You To Know: Letters to My Kids on Love, Faith and Family, and has 2 shows coming out on TLC (Twist of Kate and Kate Plus 8). Another proposed show with Paula Deen was not picked up. As for Jon, it’s not clear what his source of income is, but he better be making some money because he is supposed to provide $22,000 per month in child support for the Gosselin kids!

Nicolas Cage, after some bad investments and extravagant living is having trouble making ends meet. He owes the Internal Revenue Service $6.2 million in back taxes. He is trying to sell his $3.5 million mansion in New Orleans and his $35 million house in Hollywood. With a few movies in the works, he is working hard to get out of debt and pay the IRS.

There are other celebrities over the past 20 years that have made headlines for being in financial trouble or broke: Rihanna, Courtney Love, Lindsay Lohan, Kim Basinger, Gary Coleman, Willie Nelson, Randy Quaid, Burt Reynolds, MC Hammer, Wayne Newton, Toni Braxton and La Toya Jackson, just for starters. But take heart, even Donald Trump and George Foreman were broke at one time. Trump filed for bankruptcy in 1991. Foreman staged a boxing comeback at the age of 45 in 1987 (he had to, he reportedly needed the money to pay credit cards, a mortgage and bank loans) and is now a successful pitchman of the George Foreman Grill (I have one and so do many of my friends and relatives).

Celebrities make the same financial mistakes that we all make, often spend more than they make, don’t budget, and don’t save enough.  They are not immune to financial problems. In fact, because they are often more affluent (or at least live a more lavish lifestyle), they may fall much further into debt than most people. They experience career down turns, loss of work, lawsuits, bad investment advice, illness, injuries, divorce, etc. just like “normal” people. For celebrities, like athletes (see Allen Iverson), their careers are often brief and uncertain. For the average non-celebrity, our careers are often longer and easier to predict. However, increasingly, with the changing economy, focus on trimming the fat, the outsourcing of manufacturing and jobs, a long stable career is becoming less and less certain for all of us.

One of the main reasons I created this blog is to help others prepare as best as possible for the increasing financial uncertainty we are all facing these days.

What else can we learn from the financial troubles of celebrities that we can apply to our own situations? More on that in my next post.

Be Sociable, Share!
Copyright © 2010 by All rights reserved.

7 Responses to “What We Can Learn from Pamela Anderson and Other Celebrities in Financial Trouble – Part 1 of 2”

  1. Always remember and never forget…”Don’t spend more than you make.”

  2. Yes. That is a golden rule for personal finance. It applies to everyone and no one is immune to this golden rule.

  3. For many celebrities it is the difference from being conned and hiring a conservator. If you want to buy into the “good life”, there are plenty of people who will enjoy living off your success and excess. It may be eternal or ephemeral success. At best, a roll of the dice. It’s a matter of investing with what you have now, to insure that you can live how you want to live later. Make the wrong choice and tomorrow comes quickly. Better a banker than a bunco.

  4. I agree with Denis. Celebrities need to think long term about their financial futures (like a financial advisor or banker would think about it for a client) and at least prepare for the inevitable slow time in their careers. If they make a lump sum from a project, movie, or hit record, they should sock this away into an emergency fund. I would also recommend that they save a high percentage of their income into a safe investment since their careers are unpredictable and often short.

  1. 3 Trackback(s)

  2. What We Can Learn from Pamela Anderson and Other Celebrities in Financial Trouble – Part 2 of 2 |
  3. Marketing On The Internet
  4. LeBron James’ Big Financial Impact |

Post a Comment