12 celebrities and their biggest money mistakes

Biggest money mistakes : There are few times in normal conversation in which the word “schadenfreude” can be thrown around. It means taking pleasure in the misfortune of another. For example, when the guy who cuts you off in traffic ends up with his beamer wrapped around a street lamp, and you think to yourself “ha, serves him right” that’s an example of schadenfreude. Chuckling at a high school bully who ends up unemployed, living in his mother’s basement into his forties is another example.

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In reality however, there are tons of celebrities who have made vastly worse decisions with money. Jessica Simpson is still loaded and we estimate her net worth at around $150 million. Not too shabby for someone who considers a former marriage to have been her worst professional choice. With that said, whether it be a poor marital decision, a stupid career choice, an addiction or even poor spending habits, here is our list of twelve formerly-successful celebrities and their worst financial blunders. While you might feel sorry for some of these beloved stars, there are a few that are worthy of more than a few chuckles.

12. Toni Braxton: Terrible Overall Financial Knowledge We start our list off with one of the most successful R&B singers of the past couple of decades. Toni Braxton has found success in four decades (1980’s to present) but just can’t seem to handle a buck. She is notorious for living well above her means and has declared bankruptcy multiple times.

Back in 1996 was the first time she filed for bankruptcy. Over a decade later she was involved in an insurance problem with Lloyd’s of London, who refused to honor a policy that dealt with cancelled concerts. She filed for bankruptcy in 2010, as she was being sued by more companies than one person can handle. She did so once again in 2013, claiming to have nearly $50 million in debt. There was no single reason for her financial woes, it is just a matter of mishandling money, poor insurance savvy and not living within one’s means. In 2014 she bought a $3 million house, we’ll see how this chapter plays out.

11. Wesley Snipes: Taxes We all hate paying taxes. We know they exist for a reason, but that doesn’t make it any easier or more pleasant. The action star of the Blade series among others, was found guilty of tax evasion back in 2010 and served just over two years in prison. Wesley Snipes was also forced to pay roughly $17 million in penalties and back taxes. His two associates were sentenced to more time in prison, as they were found guilty of more serious crimes; conspiracy and filing false claims.

10. Heath Ledger: Will Not Up to Date This shouldn’t be a lesson for anyone, but if you have any money to your name, and have any family or friends, a will needs to be diligently, with some frequency. Heath Ledger died at age 28, back in 2008. There were multiple wills, one of which may not have been signed. One divided his estate between his parents and sisters, while the other left everything to his young daughter, Matilda Rose. After months of squabbling between his family and his ex-wife Michelle Williams and her family, over who would get the majority of the money, it all went to his family, who in turn gifted it to his daughter. In short, it turned out for the best, but it got messy for a while and could have been much worse.

9. Charles Barkley: Gambling Oscar Wilde said it: “moderation in all things, including moderation”. Basketball star Charles Barkley, never got the memo saying “gambling in moderation”. Some forms of gambling are relatively harmless. A few dollars here or there on a baseball game or a fantasy football pool will never hurt someone, but betting the house, spouse or kids on whether or not team X will beat the spread is wherein lies the problem.

Barkley has lost, by his own estimate, around $30 million gambling. The crazy thing is, he still enjoys it as a hobby and doesn’t sound like he regrets the losses. What a problem to have, right?

8. Willie Nelson: Taxes Legendary country singer Willie Nelson is no fan of the man, man. He never made a secret about it and continues to be an anti-authoritarian figure to this day. Back in the early 90’s, the IRS took nearly everything he had after he was discovered to have not paid taxes or severely underpaid for many years. He ultimately paid all of his debts off in the next couple of years, and sued his former money managers for keeping his money in illegal types of accounts, which was partially what he got in trouble with in the first place.

He released an album called IRS Blues: Who Will Buy My Memories? and sent all of the profits to the IRS. The moral of this story can be summed up in a few sentences. Just pay the damn government when the time comes, or don’t get caught. Furthermore, if you don’t like paying taxes, vote for a small government candidate and hope they win, because illegal tax shelters and just not paying taxes doesn’t work forever.

7. MC Hammer: Spending MC Hammer may have sang a song about not being able to be touched, but his debtors pretty much had their way with him. He went completely broke because he didn’t keep track of how much was coming in and how much was coming out. He dropped $30 million very quickly. His purchases and expenses were obscenely frivolous.

Among his largest were a massive mansion with golden gates, many vehicles including a helicopter, thoroughbred horses, and a notoriously large and unnecessary staff of over 200 people that cost him $500,000 per month.

6. Mike Tyson: Spending/Taxes Long before Floyd Mayweather, whose spending habits can be summed up in a quick visit to his Instagram page, Mike Tyson was the king of the boxing world. Much like “Money” Mayweather, “Iron” Mike could throw money around like none other.

While he had tax problems throughout his career, his biggest demon was spending. He bought tigers, who needed over $1,000 worth of food per day (apparently), a $7 million house, over 100 cars, and a bathtub worth roughly $2 million for his first wife Robin Givens. These are just examples, but you get the idea. On top of losing hundreds of millions, he still owed the US government a few mill in back taxes.

5. Larry King: Scammed/Divorces Larry King is a sharp man. In his years as a television host he has risen to the top of the media world, but his financial status has never been particularly rosy. Back in 2010 he filed for divorce for the eighth time (from his seventh wife), but did not follow through with the proceedings. Number seven, Shawn Southwick, has been in his life since 1997, his longest lasting marriage. Several of his other exes receive alimony payments in amounts that some co-workers have joked keep him tied to working at CNN because he needs the job.

Back in 2007, he claimed to have been a victim of life insurance “flipping” in which a third party company essentially buys a life insurance policy from a policy holder and receives the death benefit when they die. It’s legal, but very uncommon. King called it a scam and claimed to have potentially lost millions.

4. Mel Gibson: No Pre-Nup Larry King may be paying alimony to a ton of women, but few men have been taken to the cleaners likeMel Gibson has. There are plenty of other examples of celebrities who have had their pocketbooks been ripped apart by divorce, from Paul McCartney to Michael Jordan, (and businessmen Alec Wildenstein and Bernie Ecclestone, whose divorce losses are reported to have been above $1 billion), but Mel Gibson lost $425 million. This should be a lesson, kids, no matter how good they are in bed, get that piece of paper signed, or you may end up giving them a lot more paper in the future.

3. Gary Coleman: No Involvement In His Own Finances Gary Coleman’s fame started out during his childhood. He was just ten years old when he started acting on Diff’rent Strokes . As such he was not in charge of his money. His adoptive parents and an adviser took care of all of it. Even into his early adulthood, he knew little of what was going on with the money he had earned, until he ultimately realized that those he trusted to watch and grow his money had raided his trust fund over the years. The lesson here is, teach kids about money at an early age, and for God’s sake always be in charge of your own savings, or at least trust the people who are. In Coleman’s case, his parents were partially to blame, so he was pretty much in trouble from the start.

2. Tiger Woods: Cheating I could have listed Tiger Woods under the “should have had a pre-nup: banner, but his divorce fromElin Nordegren was more than just “we’re going separate ways” it involved hookers, adult film stars and even a neighbor. Rather than being two people whose relationship had run its course, Elin was the betrayed mother/wife and Tiger was the sleazy dirtball. Not only did she take about $100 million, he lost tons of endorsements on top of playing time. So in short, don’t cheat, or don’t get caught.

1. Michael Jackson: SPENDING The fact that a few of the entries on this list included “spending” as a terrible mistake proves one thing, not watching how you spend is the worst financial mistake one can make. Even if your marriage goes well, your career stays fruitful and you don’t get sued, throwing around more money than shows up every month will destroy anyone. Michael Jackson is no exception. When he was swimming in bills, he bought Neverland Ranch, which cost him nearly $20 million. The problem was however, he also had to maintain that. When your home has a zoo and a theme park, the costs can run up $10 million a year by some estimates. Furthermore, Jackson had expensive tastes and loved to spend, routinely dropping millions during shopping sprees.

Sources: forbes.com, people.com, azcentral.com, cbsnews.com, dailymail.co.uk

Chris Langton , Therichest

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