Posted: June 24th, 2011 | Author: Joe | Filed under: Debt | Tags: celebrity bankruptcy, news, Patricia Kluge | 2 Comments »
It’s a common misbelief that many of the wealthy in America inherited their money. In fact, most of the wealthy in America are entrepreneurs. Warren Buffett and Bill Gates are two of the most well known and celebrated self-made men of modern times.
Still, you would think that the children of such successful entrepreneurs would increase the other side of the statistic, and over time more of the wealthy would be those who had inherited their wealth. Why doesn’t this happen?
Well, I came across this article today that does a good job of highlighting some of those who’ve inherited their wealth, and what typically happens to them.
It’s about Patricia Kluge who has filed for bankruptcy. She “once hosted parties for ‘royalty, corporate chieftains, celebrities, and literary figures.’ She lived in a 23,500-square-foot mansion, owned a winery and, by all accounts, lived the good life.” Sounds like the picture of success, right? So what happened?
Like every person who inherited their wealth, she never earned it! It seems she was famous for being “the wealthiest divorcee in history.”
Inheriting your wealth is a lot like winning the Lottery. You wake up one morning and BAM! you have more money than you know what to do with. But since you didn’t have to work hard to earn it, you don’t know how to properly manage it and how precious it is.
The article also mentions Barbara Hutton, heiress to the Woolworth fortune. She was involved in a string of serial marriages (including actor Cary Grant!) and lost everything due to poor money management, and bad advice to die at the age of 66, with $3,500 to her name.
Johnson and Johnson heiress Casey Johnson also lost everything by the time she died, cut off from the family fortune and owing more than $100,000 .
Athletes and entertainers also belong to this group, though at first glance you’d think they don’t since they didn’t inherit their fortunes. But does anybody seriously believe for a minute that the M.C. Hammer’s, Michael Jackson’s and Lady Gaga’s of the world earn the money they make? Are they really worth that kind of wealth? Of course not. They simply hit a fad in the right place at the right time and became mega-stars. Next thing they know, BAM! a pile of money falls into their lap.
But they too lack perspective on creating wealth, have little to no clue how to manage money and often go broke soon after hitting their peek.
This, my friends, is the future of Paris Hilton as well.
As for Kluge, one final piece of irony: she is now employed by the winery she once owned. Maybe now she’ll learn a thing or two about earning and managing money. 
Related Posts:
Posted: January 27th, 2010 | Author: Joe | Filed under: Debt | Tags: Anna Nicole Smith, celebrity bankruptcy, Debt, news | No Comments »
I don’t usually post about celebrity news, but occasionally a “celebrity in debt” kind of story catches my attention.
Today, I came across this story about Anna Nicole Smith’s bankruptcy that was about the strangest thing I’d read since… well, since Michael Jackson was in the news.
For starters, we have the classic celebrity in debt quote:
In a 1996 bankruptcy filing, an examiner notes that Smith “did not know why she was in bankruptcy.”
She didn’t know she was bankrupt?
I wish I had the kind of money that would allow me to live the kind of life where you’re suddenly bankrupt and never saw it coming. (I wouldn’t actually go bankrupt though because I keep tabs on my money, but that’s just between you and me. I’d love the chance to show it.)
Anyway, onto the bizarre…
As part of the bankruptcy filing in 1996, it was disclosed that Smith’s assets included:
… such non-essentials as a Russian lynx coated worth $43,343.75, six pot-bellied pigs and a doll collection estimated to be worth $12,000, according to the report.
Six pot-bellied pigs?!
Really?
I mean, the Russian lynx coat, is the kind of thing that’s par for the course in the life of a celebrity, even a doll collection is understandable… but pot-bellied pigs?! 6 of them!?
Also disclosed in that bankruptcy filing is this little nugget:
Smith “lost” $2.7 million in jewelry, though no information is given as to whether the items — including a three-diamond ring and a platinum necklace with 226 diamonds, valued at half a million dollars each — were misplaced or stolen.
How does one lose $2.7 million in jewelry?!
Honestly, these people have more money than brains… it just ain’t fair.
Related Posts:
Posted: September 23rd, 2009 | Author: Joe | Filed under: Debt | Tags: celebrity bankruptcy, dave ramsey, Debt, Income, money, Opinion | No Comments »
I don’t know if you are a Dave Ramsey fan or not, but I’ve been listening to him casually on the radio during my evening commute now for a few months and I had to write about something I noticed time and again on his shows. It seems like just about every person who gets on the air with Dave to ask for advice about a debt problem always answers with something in the 6-figure range when Dave asks what their salary is!
I swear that 85-90% of those callers say they make somewhere between $100,000-200,000 a year.
The first question I had for a while was, “How in the world can you have a problem with debt when you make 6 figures a year?!”
Then the answer gradually became clear to me – these people don’t have a problem with debt, they have a problem with spending! It’s a money management problem, made worse (magnified) by a large salary.
Think about it- we see it all the time with celebrities. They have multi-million (sometimes billion) dollar incomes and somehow lose it all. How does that happen?
The answer lies with the fact that money is a lubricant that greases your financial skids. But if you can’t steer the sled, you’re apt to fly off a cliff and the more money you have (lubricant) the faster (and farther) you’ll fly off that cliff.
The Dave Ramsey callers, like Ed McMahon, M.C. Hammer, Michael Jackson, and hundreds of other celebrities should serve as a reminder that more money alone will not solve your problems. In fact, it may make them worse! You should first get your financial house in order, then grow your income. Chances are, you’ll actually keep more of it that way. 
Related Posts:
What others are saying