Why the Rich and Famous Ruin their Prosperity
I have always wondered to myself how celebrities, athletes, and entertainers who make millions of dollars in their careers can end up so… broke. Or how their lives can become so tragic. Or how they can just throw their careers away on foolishness. It makes me feel awful to know that these people have had it all and somehow “it all” simply slipped away. The reason I feel so sick inside is not just because they squandered their fortune and success in ways only celebrities can; no, there’s more to it than that. What really gets to me is how this could happen to me as well given the same circumstances. Prosperity
If I had millions of dollars coming in every year, why wouldn’t I want that multi-million dollar mansion or that nice Maserati or even those lavish vacations and parties? What would make me so different from them? They obviously have seen (and still do see) some of the previous and current stars struggle with bankruptcy, divorce, and drugs, and yet still fall prey to the same snares that trapped their fellow celebrities. Given the chance at fame and fortune, would I be sucked into the same lifestyles the stars maintain?
Thinking about this, I decided to do some research on why some celebrities end up with what I call Rich People Syndrome: the disability resulting in the loss of money, wealth and success. But before I go into that, allow me to share with you my initial opinions about Rich People Syndrome (RPS for short):
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Lack of sound financial education/habits.
Some of these famous people were given lots of money and fame at an early age, or simply were not taught the principals of lasting wealth (saving, moderation, restraint, etc.). This would cause them to spend as freely as their hearts desired with the mentality that the money will always be available, which simply isn’t the case for most.
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Overexposure to the public.
With the continuous stalking of the paparazzi and the constant shining of the spotlight, enormous pressure is placed on the stars. They must always be on the straight and narrow; any mistake they make will make tomorrow’s headlines.
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Death Grip of the Celebrity Lifestyle.
Once you cross the threshold of success, it is very difficult not to live the way others in your tax-bracket live. Wild parties, drugs, alcohol, and excessive spending all become factors in this lifestyle. Pressure to “keep up with the Joneses” becomes a necessary way of life to some.
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Pride.
I feel pride is the most dangerous. If left unchecked, pride can make one feel that they’re untouchable and take all sorts of risks. Unfortunately, this false sense of security can easily be taken away by errors in judgment, mismanagement of funds, unfortunate circumstances.
A bit of research confirmed some of my suspicions and provided some additional insight. “You see how guys live,” said Jason Kapono about an article stating 60% of professional basketball players go broke 5 years after the NBA. “A lot of players get in trouble because they want everyone around them to lead the same lifestyle. It’s a snowball effect.”
However, one thing Brian Cuban states in his blog post that the wealthy often can not afford to spend the time it takes to manage their finances, and often rely upon others for help in this area. These more trusted aides can then turn around and make some very bad decisions with their clients’ wealth (Bernie Madoff, anyone?). Furthermore, I realize that these problems the rich and famous have are not just native to them; all social classes can fall into these traps. For example, concerning celebrity drug issues, Chy King adds that “Addiction is a problem that affects all different types of people. It does not matter if you are a celebrity, a common citizen or the president of the United States.” And how many people before the recession can attest to living way above their means, similar to Mike Tyson, Burt Reynolds, and a myriad of other wealthy folks?
I believe the best way to avoid RPS is to understand why and how it occurs. This way, we can recognize these potential snares before they hinder our capacity for success. For me learning from others’ mistakes is the ultimate deterrent from making your own. Just remember, RPS is highly contagious and you may not experience symptoms until you are fully infected…
What do you think? Are there any points not mentioned here that can be possible pitfalls for the up-and-coming wealthy?
