Even Celebrities Have to Learn Their Financial Lessons

What do Ace Hood, Nicholas Cage, and Ed McMahon have in common?  All are successful celebrities who at one time faced financial ruin.

What went wrong?  Without a doubt, they didn’t follow money management basics.  Anyone rich or poor can make bad financial decisions that can start a downward financial spiral.  At one time, Cage owned 15 homes, for instance.  Hood reported extravagant spending and shopping sprees.  Not prudent decisions by anyone’s standards.

Ace Hood summarized lessons he learned from his financial troubles, including:

  • Save a percentage of your paycheck for an emergency fund
  • Replace your gas–guzzling SUV
  • Consider buying a used car rather than leasing one
  • Don’t be afraid to ask for advice

Did you ever think, “If I had that kind of money, I’d be set?”  I bet these celebs thought that, too.  These examples just show us that it isn’t the amount of money you have – it is how you manage it.  Good Money Habits can make a huge difference!

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25 Comments Add yours

  1. Tabitha says:

    Hailey I agree with you. Many of these celebrities become financially able to do things that they were not able to do before and never really think about the what if’s. Like what will happen if the money gets low, or if the car breaks down? What if something happens and the money will not come in like before? Many of them are already in debt and never consider a budget for a rainy day.

  2. Hailey says:

    I can definitely agree with this article about the fact that it doesn’t matter how much money you have. You can financially prosper starting from basically having no money but you could also lose money starting off with a lot. It depends on the decisions you make with your money. For example, a person may have bought a very expensive car and thought they were done with the financial hassle. If the car breaks down though, without considering how much maintenance and repairs can cost, the buying of the car could prove to not have been a wise financial decision.

  3. Joseph Pousson says:

    “Save a percentage of your paycheck for an emergency fund”
    This is good advice, however, it is advice that anyone could give. Essentially, this is saying that you should plan for unforeseen circumstances, which is a necessary step in most every aspect of your life.

    “Replace your gas–guzzling SUV”
    Fortunately, nowadays, most people who own a gas guzzling SUV can also afford to pay for its gas, seeing as they start at a cool $40,000. I also do not see how any millionaire celebrity can actually blame their financial ruin on their SUV’s gas cost.

    “Consider buying a used car rather than leasing one”
    Also decent advice, even though I doubt Mr. Ace seriously owns a used car. Most people reading this are students who do not have the financial means to lease a car anyway, and the ones who do most likely do not feel overly pressured to save money by getting a used car.

    “Don’t be afraid to ask for advice”
    Excellent advice, but suggestions of who to ask for advice, and common issues people need advice on would be more useful. I, personally, have always avoided asking for advice, even to the detriment of my financial well-being. Knowing who to talk to would go a long way in coaxing someone to seek advice who normally would not.

  4. Ariel Hargrove says:

    This article is short, and clearly simple and it basically clarifies what everyone already knows about celebrities: they’re only human. Regardless of who these people are (I am only familiar with Nicolas Cage) it proves that rich people can have huge financial woes as well if they do not properly manage their money and spend it on nothing but wants instead of just needs. This is probably why some lottery winners face financial woes and troubles after they win. Their thrifty spending and careful saving all of a sudden gets thrown out the window.

  5. Keller says:

    It’s easy to assume that celebrities will be financially secure due to their extremely high incomes, but what they fail to notice is that their lifestyle increases to keep pace. This is no different than the average American, except we’re talking multimillion dollar mortgages and six figure car loans.

  6. Is that it? Is the article really only a few paragraphs? Or am I not clicking the right link?

    While this short blub seems all well and good on the surface it can be misleading. Honestly I doubt Ace Hood (whoever that “celebrity” is) drives a used car, He probably leases like all the celebs do. I doubt he solved his financial problems by replacing his “gas guzzling” SUV. He probably hired a slew of lawyers and financial assistants to dig him out of his hole. He doesn’t even mention budgeting or watching his “shopping” expenses.

    As for the liberal hate of SUV’s, I drive an SUV because it is safer and will SAVE MY LIFE in the event of an accident, (Mercedes ML 350, look up the crash reports if you don’t believe me). Surely I bought it used, and payed about 40% of the original price.

    And Nick Cage? Owning 15 homes is what is called “acquiring assets” and if done properly CAN MAKE YOU VERY WEALTHY. He obviously got into more than he could handle. Friends of mine own multiple rental properties which contribute tens of thousands of dollars a month to their income, don’t be fooled. Some of the richest people today have been nearly bankrupt due to risky investments, but most celebrities aren’t business minded, and you can see their results.

    It all boils down to Common Sense and Personal Responsibility, two ideas never taught in our schools.

    Here’s some real advice: When you enter the 28% income tax bracket ($84,000-175,000) hire a financial assistant and/or broker. You can’t afford not to.

    -petroleum engineer

  7. Corey says:

    The biggest lesson that I receive from this article is that if advice is available you should use it. Just because you are well off does not mean that you should be carefree when it comes to financial advise. Nobody is above receiving financial advise even the rich.

  8. Trey says:

    These are some really good points. It’s good for the population to see that even rich celebrities can make financial mistakes. This should prove that it can happen to anyone. The two points that stand out to me the most are: Save a small portion of your paycheck for an emergency, and Consider buying a used car rather than leasing one. I’ve always thought the first point was important, and almost common sense. I never thought of buying a used car as opposed to leasing. I planned on buying a used car as opposed to a new one, but if faced with the option of leasing or buying, it makes sense to go ahead and make the purchase.

  9. Derek says:

    I agree with what this article has to say. Just because you are well off does not mean you can throw good money habits out the window. Having good money habits is not just for college students or people that don’t have very much money, it is for everyone because it is easy to misuse your money for anyone regardless of wealth. I think the tips that Hood talked about are very good tips the most important being seek help if you need it.

  10. Ashley says:

    I totally agree with this article and believe that regardless to your financial status, everyone should possess an emergency fund. When taking on money management skills- it does not matter how much one currently has, yet how you manage it is the key! Always feel free to ask questions and research helpful tips to remain on top.

  11. Gabriel says:

    Ultimately, there are two problems with money: 1) not having enough, and 2) having too much. This is a perfect example of having too much and not knowing how to manage it. Most however view it from the “not having enough” perspective, and think they’ll be able to handle if they ever do come into money, but it’s just as hard of a problem on the other side as it is on the side that most of us our on. Bottomline, no matter how rich or poor, managing your wealth is equally important.

  12. glangl2 says:

    I agree with this article in that we should never take our financial situation for granted. Managing your money is not just for people in tough financial times. Financial management should be an aspect of every person’s life, and these examples prove that point.

  13. Sam Allgood says:

    I agree with this article and feel that I’ve experienced this on a much smaller scale. I used to bartend and I would bring in large amounts of cash on a weekly basis, however, I wasn’t being frugal with my funds and had I practiced the money-saving habits I practice now, I would be in a much better financial situation.

  14. Mandy Dupuy says:

    I think we should all take a little something from this article. There is often times I think, “If I had that kind of money, I’d be set.” However as I have gotten older I see how much money it takes just for the basics and as I get older I have more and more bills to pay. I might not ever make as much money as these celebrities but everyone can have nice things and the things that make them happy as long as they manage their money. Ace hood makes a good point in this article about not being afraid to ask for help. The sooner you ask for help the sooner you are able to get your finances straight and really start enjoying what you work for.

  15. Brandon says:

    This article proves the good financial habits are not just for the lower and middle class but for everyone. You should always grow and protect your money, and never be afraid to ask for help even if you are a celebrity.

  16. Pat says:

    I believe that everyone should know how to manage their finances because it is an important thing to know how to do. It doesnt matter if you are a millionare or just an average person, everyone can get into a bad financial situation if they dont know how to manage their money. If you do find yourself in a bind contact a financial advisor or talk to someone who has good money management skills.

  17. Jamie says:

    I agree that knowing how to effectively manage your money is a skill that everybody should learn. A lot of people think that if they were rich their money problems would just disappear, but this shows us that that’s not the case. I believe that common sense plays a big role in situations like this though. It’s obvious that buying a used car or trading in a gas guzzler would save money. Also, 15 houses is just a ridiculous number. However, I do agree that you should never feel to proud to ask for help. A little advice could help you out a lot in the long run.

  18. Ashley says:

    I believe that everyone, including celebrities, should know how to manage money. Celebrities often think they have enough money to blow. Unfortunately, that is not the case. Nicholas Cage, for instance, did not need to own 15 houses. People tend to spend money quicker when they recieve a lot at once. It is important to be informed about financial situations and plan for yourself. Once you recieve money, it is important to put some away for the future and save the amount that you need to save.

  19. Jaimee says:

    Ultimately, managing money should always be a top priority whether you have a little or a lot. Unfortunately, Nicholas Cage and Ace Hood realized this the hard way, but as long as they learned before it was too late, then they should be fine. The rule should be in order to receive enormous amounts of money; you must have a financial advisor so the unnecessary spending, such as 15 houses, could be eliminated.

  20. Helen Headlee says:

    Occasionally you’ll hear about someone in pro sports mismanaging their millions of dollars in the same way. One former NFL player worked for the moving company that moved my parents out of their house because he blew all his money on spending sprees.

    While many people are unfortunately not educated about money, some of it is simply common sense. Who needs 15 houses? People have to realize that no matter how wealthy the are, their money is still a finite resource that should be managed for its greatest potential.

  21. Kathryn says:

    I definitely agree that no matter how much money you make, you are never financially secure. Celebrities have money problems just like everyone else, but on a larger scale. Hood’s ways to prevent financial problems seem pretty obvious to me. It is always smarter to buy a used car that saves you money on gas. I also think buying 15 homes like Nicolas Cage is just asking for trouble. I like that Hood said that you should always ask for advice when you need it. Not everyone knows about finances, so instead of getting into trouble, ask someone who does know!

  22. Jordann says:

    I am a compete believer in that, no matter who you are or how much money you have- you must know how to effectively manage your money for it to be worth while in your life. Nonetheless, I don’t necessarily agree with statement “…it isn’t the amount of money you have…” because this most definitely makes a difference-it’s simply the scale in which the money is being handled that will be approached differently.

  23. Zach Dodge says:

    I agree that with great opportunity comes great failure. We could all learn from this lesson and the special points he establishes. Most importantly I believe that you should have an emergency fund and seek advice where ever you can.

  24. Jamesha Littles says:

    I believe that we can learn a lesson from what Ace Hood and Nicholas Cage went through. When people begin to earn a lot of money, you think you can spend it freely. You don’t realize that you spend it quicker since you made it. The points he listed are true, they are not the only points you need to know, but they are a good summary. Especially about asking for advice. You need to have a plan on how to save your money. Once you ask for advice, everything will fall into place.

  25. Kristen Michele says:

    We can learn a lot of good and bad things from celebrities, this being one of the bad. Ace Hood’s reasons for financial trouble are really just the start and they also do not apply to everyone. He blames his troubles mostly on cars and not everyone owns a car. There are other ways that people can save like staying home more and cooking themselves instead of eating out. But I do agree with his point of getting advice. Financial planners could help you save more money with tips that you would not know on your own. The moment you find yourself heading for trouble the first step you should take is to seek help.

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