Why Stars Like Johnny Depp Burn Through Their Fortunes Following the Money down the Drain
When Michael Jacksonblew through $6 million during one shopping trip in Las Vegas, an outing that turned into the biggest takeaway from a 2003 British TV documentary that painted the pop star as the consummate weirdo, it became the go-to example of why Jackson was said to be $400 million in debt when he died.
Let's see, $6 million x 365 days in a year…plus all that Neverland Ranch upkeep…
But even if he didn't have seven-figure expenses every single day, the real question was, what happened to all the money Jackson made over the course of his four-decade career? 1984's Thriller was the second best-selling album of all time when he died (it's since become No. 1). His 1991 recording contract with Sony alone was for $65 million, not including touring and the endless monetizable aspects that go hand-in-hand with the sort of game-changing music Jackson was producing at the height of his career. He spent "only" $47.5 million in 1985 on ATV Music, which included the Lennon-McCartney portfolio. Sony then bought half the rights to the ATV catalog in a 1995 merger for $95 million.
So even if he was spending like a maniac, which he apparently was ($8 million in annual travel and antiquity acquisitions alone as the 20th century became the 21st), how did Jackson end up close to half a billion dollars in the red?
The answer is utterly average.
Unpaid loans. The financial system that frequently gobbles up people much, much lower on the earning totem pole than Jackson also got to him. Wanting to maintain a certain lifestyle, he secured a $200 million loan in 2001 and continued to spend tens of millions more each year than he was making for the rest of his life. (Tens of millions also went to settle various civil claims brought against him for alleged child molestation. He was acquitted of criminal charges in 2005.)
For anyone who's ever been in the slightest bit of credit card debt knows, it's alarmingly easy to spend beyond one's means. Even if—or maybe especially if—your means are seemingly infinite.
Ironically, after his sudden death in 2009, money started pouring back into his estate (the sale of his half of the Sony/ATV catalog for $750 million helped secure a cushion for his kids' future) and Jackson's is one of the most posthumously flush afterlives around.
But while Jackson's financial troubles proved a shocking and tragic cautionary tale at the time, he's in storied company when it comes to poor money management among the celebrity set. Considering how prevalent money issues are among regular people, just add some zeroes and you've got Hollywood Economics 101: Amex Is Going to Want You to Pay That Bill One Day.
Not that far removed from articles slavering over his exotic global lifestyle—a whole village in France! his own private island! a yacht!—Johnny Depphas become the new poster boy for frivolous over-spending.
Lately dubbed Hollywood's most overpaid actor (overall box office returns compared with his usual eight-figure asking price for big-budget features), the $650 million his accountant claims he earned over 13 years is apparently all gone.
First, let us remember that the lofty numbers so high they make our ears pop that are reported as a celebrity's estimated net worth are what a person is rumored to have made over a period of time. The vaunted Forbes lists of earnings don't then factor in how much money is constantly flowing out of an actor or athlete's bank account—nor do they claim to, but it's just a reminder that at the end of one year, Dwayne Johnson didn't hang onto the entire $64.5 million. Taxes alone eat up a healthy chunk of dough. (Which, of course, is also why so many celebs seem to run afoul of the IRS.)
Now, savvy money management—including properly diversified investments—can make for an estimable bottom line at the end of the day, so it's not as if these sums are so outrageously beyond the limits of possibility.
It's easy to assume that people in the public eye—who are expected to look perfectly coiffed and arrive in style at all times—have more money than they actually do. (If it makes you feel any better, a lot of those cars are leased, and a lot of the sexy accessories are free.)
Tori Spelling, for instance, has been sued several times over the past year for tens of thousands in unpaid credit card bills. People ask, but isn't she heiress to the Spelling television fortune? Sure, she and Dean McDermott, whose TV jobs (such as his hosting gig on Chopped Canada) seemed to coincidentally dry up after his misbehaving ways were probed on True Tori, have five kids, but…the family's famed Beverly Hills estate, "The Manor," estate sold for $85 million in 2011 and mom Candy Spelling moved into a $35 million condo.
An all cash deal, as they say in very few zip codes.
But Tori only inherited $800,000 when her father, Aaron Spelling, passed away in 2006 and she's had a rocky relationship with her mother.
"It's no mystery why I have money problems," the Beverly Hills 90210 star wrote in her 2013 memoir Spelling IT Like It Is. "I grew up rich beyond anyone's wildest dreams. I never knew anything else. Even when I try to embrace a simpler lifestyle, I can't seem to let go of my expensive tastes. Even when my tastes aren't fancy, they're still costly. I moved houses to simplify my life, but lost almost a million dollars along the way."
Tori's mother confirmed that she would spend money like it was going out of style.
"She would close a store and drop $50,000 to $60,000," Candy told The New York Times in 2014. "I never did anything like that. She just went crazy."
On a 2014 episode of True Tori, after an eviction notice errantly taped to the door of their rental house again put their money troubles in the spotlight, Tori lamented to Dean, "I'm overwhelmed with life. Sorry. I just feel responsible."
source:-http://www.eonline.com/news/850868/why-stars-like-johnny-depp-burn-through-their-fortunes-following-the-money-down-the-drain
