Going Bankrupt In 6 Easy Lessons

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The world of pop culture is predictably cyclical. Newly minted celebrities rise to fame overnight, while last week’s tabloid darling faces the lonely plunge into anonymity. But the cycle often has a coda: Some time after a celeb takes the express train to obscurity, they appear back in the news for a brief time as they file for bankruptcy, having in just a few years blown through fortunes that should have lasted generations. Here are a few of the most famous cases over the past few decades:

1) MC Hammer: Hammer might have benefited by hiring an advisor to put a good chunk of his $33 million fortune aside and tell him, “You can’t touch this.” Instead, the parachute-pantsed popstar blew his entire fortune on, among other things, sports cars, planes, helicopters, a staff of 200, a 40-person entourage (take that, Vinnie Chase), and (it is rumored) a pool shaped like his signature pants.

2) Kim Basinger: Apparently, the Oscar-winning actress was not content to buy an opulent sprawling estate. In 1999, she paid $20 million to buy an entire town in Georgia. She filed for bankruptcy four years later and the town was sold for less than $2 million.

3) Mike Tyson: The heavyweight boxing champion saw more than $300 million in career earnings slip through his fingers (and half of one ear slip through his teeth). In addition to the usual mansions, cars, motorcycles and jewelry, Iron Mike dropped large on not-so-usual Siberian tigers and a $2 million bathtub.

4) Willie Nelson: The shaggy hempster could have used a good tax advisor, filing for bankruptcy in 1990 after getting hit with a $16 million bill for back taxes.

5) Wesley Snipes: And speaking of unpaid taxes, the poster child for bad tax advice is the Jungle Fever star, who was convinced that under the U.S. Tax Code, he was exempt from payment of Federal Income Tax. (He wasn’t.) The Florida native also claimed he was a non-resident alien. (He isn’t). Maybe he should have sued his elementary school geography teacher. (He didn’t.)

6) Michael Jackson: Even the King of Pop, hailed by the Guiness Book of World Records as the most successful entertainer ever, struggled with solvency, having built an amusement park, a zoo, a railroad and a movie theater on his Neverland Ranch. Among his other, shall we call them frivolous purchases: Ten robot dogs, life-size statues of himself as various superheroes, a gold throne and, of course, the Beatles catalogue. Unable to pay the nearly $1 million per month maintenance cost on his home, Jackson was forced to file for bankruptcy just before his death in 2007.

While the large dollar figures and glaring examples of overindulgence make celebrity bankruptcies fascinating, it can be just as tempting, and easy, for us non-celebs to get sucked into debt and lifestyles we can’t sustain. Yet another reason to stick with a disciplined lifelong financial plan.


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