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Famous People Who Stacked up a Lot of Debt

Famous People Who Stacked up a Lot of Debt

  • By Saral Credit
  • June 14, 2022

How many celebrities do you know across the globe?

Well, most of them are better known for the huge money and stardom that makes them popular personalities worldwide. However, among the popular celebrities, numerous gathered a lot of debt, causing a big monetary loss. Some of them end up in bankruptcy or end their spending to regularize their expenses and clear their debts.

Below is the list of famous people who accumulated a lot of debt.

Michael Jackson: The name doesn't need any introduction worldwide. He is one of the famous personalities who reportedly died with $400 million in debt. Father of pop released numerous albums in the USA that became a superhit and took him to new heights. This compels him to spend high and borrow from others to meet his desires. This resulted in multiple legal battles that developed a financial crisis for Jackson.

Amitabh Bachchan: The Angry Young Man of India (Big B) has ruled Bollywood for decades, and his era is still alive. Being wealthy, he once reported about his financial crises. Back in 1999, he reported that he was not having any film, no company and no money. The data revealed that he was under a huge debt of Rs. 90 Corore. Fortunately, he was offered a movie and KBC that changed his life and bring him back in the financial journey.

50 Cent: 50 Cents is another popular face that was a famous single in the USA. He declared Chapter 11 bankruptcy in 2015. In the next year (February), he could clear the bankruptcy status. According to the reports, he holds a debt between $10 million and $50 million.

Kanye West: ln 2016, Kanye West posted a tweet notifying about his $50 million debt. Fortunately, his wife (Kin Kardashian) reportedly paid the debt after encashing an "$80 million video game check. It's interesting to note that West has repeatedly reported his debt.

Gary Busey: Gary has a strong acting record of more than 70 films on the list. He has worked for 45 years in Hollywood. Yet, there was a time when his expenses surpassed his net worth. In 2012, he was reportedly under a huge debt of $500,000 to $1 million. He has a huge debt to hospitals, banks, and other authorities. Interestingly, these debts lowered his net worth to only $500,000.

Burt Reynolds: Reynolds was reportedly under debt 20 years back. His bad investments (back then) and divorce from actress Loni Anderson were the prime reasons behind a debt of over $10 million. Data revealed that he spent nearly $40 million only in his divorce.

According to the reports, he sold his gold watch and golden globe award in an auction to earn some cash and pay off his debts.

MC Hammer: MC Hammer made his debut with a single release, "U Can't Touch This," in 1991, which became a superhit turning him into a star. However, a sudden hike from an ordinary man to a star turned him into a high-expense personality. He reportedly purchased a 40,000-square-foot house for a huge amount and later invested $30 million worth of the upgrades.

Further, reports show that he hired more than 200 staff which totaled nearly $500,000 per month. This all resulted in $13.7 million of debts. He is reported to have never bounced back from his debts.

Charlie Sheen: In 2016, Charlie had an expected net worth of $150 million. But his lavish lifestyle ends up in a huge debt of $12 million. The reports said he only owed $300,000 on an American Express card alone. There was a time when he earned $1.8 million per episode. He was also the highest-paying TV actor then.

Nicolas Cage: A popular name in Hollywood, Nicolas Cage has won Oscars but has undergone high debt tenure. In 2019, he filed for bankruptcy as he owned the IRS of $14 million. Buying private land, two castles, etc., are common reasons that result in a high amount of debt.

Donald Trump: The previous president of the USA, Donald Trump, is already a common personality that most of you already know. In the 1990s era, Donald Trump invested $1 billion in the construction of Atlantic City. Interestingly, he himself never filed for bankruptcy. However, his six casinos underwent bankruptcy.

In 1990, he filed bankruptcy in Chapter 11. However, in the coming year, he filed for bankruptcy for three of his businesses. Later he was reported to have a huge debt of $800 million.

Mike Tyson:  In the initial days of his stardom, he earned $30 million per fight. He also became the world's best boxing champion. However, he spent all his earned money. He made unnecessary yet massive investments in mansions, cars, jewelry, limousines, motorcycles, clothing, and more.

Shah Rukh Khan: Another big name from Bollywood, SRK, had also seen a financial crisis when he invested about Rs. 150 Crore in the production of Ra.One movie. Unfortunately, this movie flopped, taking him into a bad financial situation. However, his movies like Don 2 and Jab Tak Hai Jaan built his wealth back and took him out of the monetary crisis. 

David Cassidy: David is a famous face in the music industry. He sold more than 30 million images. However, he piled up a debt of about $17,000. He was also arrested thrice, which resulted in his divorce. Unfortunately, we lost him due to organ failure. However, he clearly denied having any financial crisis in his life.

Gary Coleman: Gary was one of the highest paying child actors who filed Chapter 7 bankruptcy in 1999. He was reported to have a debt of over $72,000.

So, these are the popular people across the globe who owned millions of dollars at one time but were under massive debts. Some of them made a comeback with smart decisions, while others never came out of their debts.

Now, let's look at the prime reasons that result in high debt.

Choosing Wants over Needs: Before you start spending your monthly income, it's essential to understand the fundamental difference between Wants and Needs. Anything necessary for living is considered a NEED. Moreover, anything you want to own, but doesn't impact your daily living, is considered a WANTS.

Most people prioritize their WANTS and skip NEEDS, results in high developing financial crises.

E.g. of Wants:

  • Buying an iPhone
  • Planning a foreign vacation trip
  • Buying a 600cc motorcycle

E.g. of Needs:

  • Buying monthly ration
  • Recharging your internet plan
  • Saving for monthly transportation

You must learn to categorize any expense based on Wants and Needs that will help you make the right decision.

Falsely Convincing for Extra Expenses: There are some needs that you can't live without. However, it's crucial to know how much money you can afford to meet your needs. E.g., you need a smartphone, which is available under Rs. 10000. However, you desire to buy an iPhone that costs Rs. 50,000. Hence, it's entirely your decision to satisfy your need and spend Rs. 10K or convince yourself to spend extra.

If you don’t have self-control, it's easy to manipulate your mind and make wrong decisions. Most people convince themself to make extra expenses even though they are familiar with the outcome of hefty spending. Ultimately, you will end up spending higher than your income sources.

Taking Social Pressure Seriously: Social pressure is a common part of everyone's life. Most people live in an era where they devote most of their daily operations to social pressure.

Yes, they commit tasks/activities based on what their neighbours and relatives expect from them. They put their efforts into achieving the goals set by others. This ends up making high expenses that you were not expected to make.

Famous personalities take social pressure seriously and spend far higher than their net worth to maintain their reputation. This results in a financial crisis in some of their life, causing a big downfall in their net worth.

Promoting Standard of Living without Income Growth: Following the right people is common in today’s era! Middle-class people prefer following the lifestyle of rich people, which compels them to spend higher than their budget.

It's worthless to improve your standard of living until you have increased your income source. Still, some people consider elevating their standard of living, regardless of how much they earn. This result in increasing debt with time, causing a financial crisis.

Not Preparing & Following a Budget: Budget creation is highly recommended to ensure you plan every penny you earn. Without preparing a strong and adequate budget, it's tough to maintain your expenses and keep a better command of your future.

Some people even create a budget but fail to follow it vigorously. Ultimately, they end up spending higher than their monthly income. Hence, if you are in the category where you spend without making a budget, it's tough to keep control on your income, boost it and contribute its component for the future.

Neglecting your budget will result in false mismanagement of your Needs, Wants, and Saving. Instead, in most cases, you will skip the Saving part and struggle to maintain your Needs and Wants.

Every story has a lesson you can learn to avoid mistakes and build a better future. If you have read this content till now, you would have learned a lot about what to avoid in managing your income and building a strong financial future.