Going bankrupt on $10M per year

I'll bet we all have stories of people we know who lived well, spent a fortune and then lost it when things went sour for a while. I can think of several without ever trying: Big houses, fancy cars, travel, great parties, and when the income slowed down, it all went away. Talk about living ABOVE one's means!!!
 
Anybody who has an outstanding bill to a jewler of $800K is probably not LBYM...

The sad thing is that even with a $4 million contract (if he is getting one) is that it will not help him out in the long run.... that money will be gone within a year or two...
 
These stories (even at that scale) really don't surprise me after reading The Millionaire Next Door, great book. One of the most positive influences from a book ever for me...
 
"Wait, you're saying it's not 'Live Beyond Your Means'?"
 
...and although not 100% confirmed Whitney Houston reportedly died broke. It never ceases to amaze me how these athletes/musicians/celebrities can p*&& away so much money. It seems hard to be able to spend that much money, never mind lose all of it.
 
mystang52 said:
...and although not 100% confirmed Whitney Houston reportedly died broke. It never ceases to amaze me how these athletes/musicians/celebrities can p*&& away so much money. It seems hard to be able to spend that much money, never mind lose all of it.
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As the story mentioned, and outstanding $800K bill to a jewler... who knows how much was spent over the years...

Also, those private jets cost a bit of money... and hiring the entorage to follow you around making it look like you are important... expenses add up :ROFLMAO:
 
Just goes to tell you that amount of money is not the issue here. One can have millions but, if can't LBYM, you're screwed. It's the life style that's more important than money.
 
Midpack said:
These stories (even at that scale) really don't surprise me after reading The Millionaire Next Door, great book. One of the most positive influences from a book ever for me...
Click to expand...

Great book I also loved Stop acting rich by Thomas Stanley.
 
Athletes and artists--they're risk takers almost by definition, their talents don't always extend to finance, and they attract people who want a piece of them.
 
They (broke, once rich celebs/athletes) make the classic mistake over and over. That being assuming their current earnings will continue throughout their life, when in actuality, their careers have a very short shelf life. Of course some have been ruined by not paying any attention at all to their finances and getting caught in poor investment schemes.
 
Article from 2006. Interesting and detailed, on this topic, about Big George who almost went down this path of going broke.

'David W. Latko, a money manager and radio host who recently published “Everybody Wants Your Money” (HarperCollins), a personal finance primer, reduces the mechanics of squandered wealth to handy categories. He says there are five basic ways people become rich: they inherit, marry, steal, win or earn their fortunes. Only those who earn fortunes, says Mr. Latko, tend to preserve their wealth. Inhabitants of the other four categories are more prone to be wastrels.'

Fortune’s Fools: Why the Rich Go Broke - New York Times
 
I notice in that story that AI had a 7 million dollar deal with Reebok. Reebok will probably not notice or even care but to me that marks them as a very dumb company and I will certainly consider that in my next sneaker buying decision.
 
Nothing wrong with being wastrels, they're probably helping our economy right now. If we have to support them later when they're broke, well that's probably a small price to pay for the taxes they paid and economic stimulus they provided. I assume their lives will proceed as planned.
 
I don't know how its possible, but I'd like to give it a try!
 
HatePayingTaxes said:
Just goes to tell you that amount of money is not the issue here. One can have millions but, if can't LBYM, you're screwed. It's the life style that's more important than money.
Click to expand...

Quite right. A sixpence is as good as a million if you run short, as Charles Dickens said

“Annual income twenty pound, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pound, annual expenditure twenty pounds ought and six, result misery.”
 
If the article is read a little closer, it's a bit of bad journalism and a lack of knowledge of the legal system. What occurred, is that a jeweler sued Iverson for $800K, and Iverson told the court he doesn't have the ability to pay. He well might have income and assets that are exempt from judgment, and beyond reach of creditors. I'm not saying that is the situation, but it doesn't necessarily mean he's completely broke.
 
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