Money Mistakes of the Rich and Famous
Walk past a newsstand these days and you'll see dozens of glossy magazines with the faces of the rich and famous staring back at you. Glamour, fame, fortune! But behind the fancy clothes and re-touched photos, celebrities are just people who, like us regular Joes, make serious mistakes. No, not bad plastic surgery or making the Worst Dressed list, we're talking about making serious money mistakes.
Here are nine that have made headlines recently...
Money Mistake #1: Not Signing a Pre-nuptial Agreement
If the rampant rumors are true, Madonna and Guy Ritchie may be the latest celebrities calling it quits--and the latest to potentially end up in a nasty fight over money since the Material Girl apparently didn't have a prenuptial agreement. This puts Madonna's estimated $600 million fortune at risk. Remember, earlier this year another British court ordered Sir Paul to pay ex-Heather Mills a whopping $48.7 million, so this could cost Madonna dearly.
You don't need to be filthy rich to need a pre-nup. If you bring assets to your partnership that you want to be sure you keep 100% of if things don't work out, it's essential you work out a pre-nuptial agreement before you are married.
Money Mistake #2: Not keeping your will up to date.
Actor Heath Ledger's tragic death was compounded by the fact that neither his girlfriend, Michelle Williams, nor their daughter, Matilda, was included in his will. That wasn't a slight...Ledger just hadn't updated his will since 2003, well before either was in his life.
We all get busy, and visiting a lawyer to update your will isn't at the top of anyone's "fun" list, but it's one of the most important things you can do to protect your loved ones should something unexpected happen to you. Be sure you update your will to address any major life event, such as marriage, divorce or the birth of a child or grand-child.
Money Mistake #3: Losing a home to foreclosure
You've probably seen former Tonight Show host Ed McMahon in the headlines lately. In a sad turn of events, McMahon, once famous for knocking on people's door to make their dreams come true, is now facing the nightmare of losing his home to foreclosure.
Records show McMahon is $664,000 behind in payments on his Beverly Hills mansion. How could this happen? Simple: McMahon got caught by the housing bust just like so many other Americans. He bought a big house and took out a home equity loan when banks were saying "yes" to almost any request. Meanwhile, the value of his house went down with a very weak real estate the market, and he got behind in his payments.
Other celebs to lose their homes this year include queen of soul Aretha Franklin and disgraced baseballer Jose Canseco, who simply abandoned his $2.8 million pad -- just walked away and let the bank take it. (See a gallery of recent celebrity foreclosures here)
Money Mistake #4: Going Bankrupt
We know, we know, cry us a river, right? It's hard to muster much sympathy for celebrities who made a fortune and squandered it all, but the list of celebs forced to declare bankruptcy is surprisingly long. The newest member to join this unfortunate club is rapper MC Hammer, who burned through $30 million with his penchant for fancy cars, homes and a huge entourage. Other bankrupt celebs include boxer Mike Tyson, figure skating darling Dorothy Hamill and Debbie Reynolds.
Keep reading to learn about the two superstars who are in danger of adding their name to the list...
