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-   -   Nicolas Cage heading towards financial ruin (http://www.early-retirement.org/forums/f27/nicolas-cage-heading-towards-financial-ruin-46908.html)

Trek 10-20-2009 07:32 AM

Nicolas Cage heading towards financial ruin
 
I know these super rich folks live in a parallel universe to me, but it still baffles me when people who are able to create such wealth for themselves get into financial trouble.

Now Cage claims his former business manager has sent him “down a path toward financial ruin,” and he's suing him for at least 20 million dollars.

Nicolas Cage sells castle to pay bills_English_Xinhua

Really, how stupid is Cage? "Hey Nick, I gotz a $5 million dollar dilapidated castle in England I'll sell ya after we close on that swampland."

Notmuchlonger 10-20-2009 10:54 AM

Yeah that lbym thingie is difficult. :laugh:

CuppaJoe 10-20-2009 11:13 AM

Hey, didn’t he see the movie. In “Moonstruck” the bookkeeper just forget to deposit the receipts. She’ll take care of it in the morning. I adore Nicky but have never seen him at the opera, not even Puccini. Not too worried about him, he does have a rich uncle who knows how to use his (horse’s) head.

Bestwifeever 10-20-2009 11:23 AM

New excuse--"My former financial advisor did it."

Maybe Nick can move in with Ted Turner and they can both save money.

mickeyd 10-20-2009 11:56 AM

Quote:

The Hollywood actor fell in love with Bath's Georgian heritage so deeply that he bought three homes in the area at the top of the property bubble.
Helluva impulse purchase, no? Perhaps one of the MODS should send Nick an invite to join this forum so he can at least consider LBYM in the future.

calmloki 10-20-2009 12:49 PM

Regarding LBYM - was looking at a Forbes article on a Mr. Schonfeld - net worth one BILlion dollars. His 90 million dollar American castle was being oooed and ahhed over - complete with 9 hole golf course. Kind of a high priced spread, but it dawned on me that it was only 9% of his net worth - well within the kind of percentages we were talking about for FIRE members in an earlier thread. $90,000,000 house and LBYM. Maybe Nick is in the same sort of realm.

WhoDaresWins 10-20-2009 04:45 PM

Not too worried about him. He is a wonderful actor, not too old, and will have to set his sights on a new lucrative movie. Easily done.

NW-Bound 10-20-2009 06:47 PM

To borrow a line from a character of a knight in the movie Indiana Jones and the Last Crusade: "He spent poorly".

Notmuchlonger 10-20-2009 07:06 PM

Yeah he will be fine though. Stuff will get paid off or forgiven. He will be back to his multimillionaire lifestyle in no time. That is at the worst.

missionfinder 10-20-2009 07:54 PM

Classic example of income doesn't equal wealth. Its your spending habits that count!

Orchidflower 10-21-2009 07:02 AM

The really sad cases are like Mike Tyson. You have an uneducated pugilist who lost it all--and it was more than plenty to support him and his entire family forever--or it was stolen by Don King and now is past his fighting prime and broke. He has no chance to ever make up the money he lost now. Now that's sad.
Cage seems to have made so much money he doesn't know what to do with it or even care. Guess he figures he can always make more at his age...and he probably will. Hopefully, he gets some lessons out of this.
I just want to know why that can't be me? Darn!

steve88 10-21-2009 07:09 AM

Quote:

Originally Posted by WhoDaresWins (Post 867256)
Not too worried about him. He is a wonderful actor, not too old, and will have to set his sights on a new lucrative movie. Easily done.


I feel the same. What a lucky guy.

Trek 11-18-2009 01:29 AM

I guess if you're going to Live Beyond Your Means, then this is the way to really do it.

Nicolas Cage caused his own financial ills, ex-business manager says - CNN.com

"Instead of listening to Levin, cross-defendant Coppola spent most of his free time shopping for high ticket purchases, and wound up with 15 personal residences, most of which were bought against Levin's advice," Levin's complaint said. "Likewise, Levin advised Coppola against buying a Gulfstream jet, against buying and owning a flotilla of yachts, against buying and owning a squadron of Rolls Royces, against buying millions of dollars in jewelry and art."


Cage's four yachts included one each for the Caribbean, the Mediterranean, Newport Beach, California, and Rhode Island, Levin said.

In 2007 alone, Cage's "shopping spree entailed the purchase of three additional residences at a total cost of more than $33 million; the purchase of 22 automobiles (including 9 Rolls Royces); 12 purchases of expensive jewelry; and 47 purchases of artwork and exotic items," Levin's filing said.

*my bold

BunsGettingFirm 11-18-2009 03:55 AM

Maybe the writers and producers of Entourage didn't even need to make up the character of Marvin, the always exasperated financial adviser who tries to prevent his high spending actor client from buying a $12 million house and a $400k Rolls Royce while the actor doesn't have a job lined up.

traineeinvestor 11-18-2009 04:02 AM

History is littered with people who lost fortunes of staggering size either through bad/overleveraged investments (e.g. the Reichmans,the Hunt Brothers etc) or simply managed to spend their way through enough money to support a small third world country (e.g. the Astors).

If you want to keep a fortune (of any size) and make it last for a lifetime or through generations (e.g. the Rockefella's, Duke of Westminster etc), how hard can it be to (i) cut out the leverage and risky investments (ii) diversify and (iii) keep living expenses at a sustainable level?

My grandfather left a reasonable estate to his four adult children - modest by most standards but enough to support those children (and their families) in a reasonable lifestyle for life. At least it should have been. Two out of the four were bankrupted about 16 years later - they lived the high life and made a lot of leveraged investments in small businesses (which they knew little about), night clubs (which they didn't manage) and poor quality real estate (difficulty in finding tenants) which collectively collapsed after the 1987 sharemarket crash. The third is doing ok but took a big hit in a messy divorce and had to dial back the standard of living as a result. Only the fourth is doing fine, in part because she prefers a more simple life and in part because she married a man whose investments were a lot more sensible than the rest of the family (less leverage, better quality real estate and listed equities). (I'm happy to say that my mother was the fourth child.)

It's a good case for professional trustees and a tightly worded trust deed.

Cattusbabe 11-18-2009 04:08 AM

Quote:

Originally Posted by Orchidflower (Post 867431)
The really sad cases are like Mike Tyson. You have an uneducated pugilist who lost it all--and it was more than plenty to support him and his entire family forever--or it was stolen by Don King and now is past his fighting prime and broke. He has no chance to ever make up the money he lost now. Now that's sad.
Cage seems to have made so much money he doesn't know what to do with it or even care. Guess he figures he can always make more at his age...and he probably will. Hopefully, he gets some lessons out of this.
I just want to know why that can't be me? Darn!

Not surprised about Tyson. He was warned on several occasions by several people about King. Results predictable.

As for Cage I guess he has to motivation to make a couple of blockbusters or three. That should right things.

samclem 11-18-2009 10:02 AM

These poor money decisions by talented people often work out very well for society--it keeps these people working.

"Mark Twain" lost more than $7 million (present value) of his money when an invention he was backing proved unprofitable. Then he lost more in the publishing business. He declared bankruptcy. Even though he was under no legal obligation to do it, he worked for years writing books and articles and doing lectures to finally pay off creditors. Nothing's certain, but it's possible we got some great literature that wouldn't have been created without this financial pressure.

And then there's Willie Nelson . . .

ziggy29 11-18-2009 10:22 AM

Quote:

Originally Posted by samclem (Post 876474)
"Mark Twain" lost more than $7 million (present value) of his money when an invention he was backing proved unprofitable. Then he lost more in the publishing business. He declared bankruptcy. Even though he was under no legal obligation to do it, he worked for years writing books and articles and doing lectures to finally pay off creditors.

I never knew this, but I just looked some of it up. Interesting.

Apparently, this was before there were laws against "fraudulent conveyance." Apparently when he filed bankruptcy, he had just transferred ownership of his copyrights to his wife in order to prevent creditors from taking them. Seems like that would fail the legal smell test today.

Still, his insistence on ultimately paying back his creditors even after the bankruptcy was admirable and demonstrated a sense of personal responsibility that seems too rare in this day and age.

Orchidflower 11-18-2009 10:23 AM

Or all the poor marital decisions some of the actresses have made such as Debbie Reynolds who let hubby Harry Karl (he did something with shoes) burn thru all her money. I don't think she was even aware she was bankrupt, but, God bless this woman, she went to work like a demon and paid every single debt back. What character!

FIREd 11-18-2009 10:23 AM

Quote:

Originally Posted by samclem (Post 876474)
And then there's Willie Nelson . . .

What? His money went up in smoke?:rolleyes:

I love the part where the money manager figures that Nick has to make $30M/year just to maintain his lifestyle. Let's see, at 4% SWR, Nick's gonna have to accumulate about $750M in his portfolio in order to maintain his lifestyle in retirement.:laugh: He better start cranking up the movies...


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