Bruce McClary, currently director of media relations for ClearPoint Credit Counseling Solutions in Seattle, worked with a debt collection agency in Los Angeles where he saw the sad aftermath of fortunes frittered away.
"An actor who had been popular in the 1970s and had earned millions was living off the residuals from some TV roles and the income generated by several properties," says McClary. "One of the homes, a $2 million mansion, was destroyed by a natural disaster."
Although there was insurance on the property, the special coverage needed for that particular disaster had lapsed. The property was a total loss, sending the actor's already shaky finances into a tailspin.
The debt collection company McClary worked for eventually collected a 50 percent settlement the portion of the actors debt that concerned them -- a second mortgage on one of the actor's properties -- but most of the actor's fortune had evaporated
by the time the actor died from an illness.
"These situations remind me of similar circumstances that happen to lottery winners, sometimes referred to as 'sudden wealth syndrome,'
when people who come from modest means are suddenly thrust into the limelight of fame and fortune," says McClary. "If they weren't prepared with core financial skills, their financial security is at risk."
The biggest lesson that everyone can take away from these tales -- whether they come into sudden wealth or not -- is the importance of living within your means.
"Fame is fleeting, so those reaching the top should think about how to make their newfound fortune last a lifetime.
Otherwise, it can disappear faster than it arrived and can even turn into some serious debt," McClary says.