Robin Williams is dead so let’s talk about money. Big money, global celebrity money, because entertainers are rolling in it after all. Or are they?
Immediately after the death of Robin Williams, reports started coming out about his financial woes. Apparently he was close to bankruptcy. How do you go from being a top major film star earning millions of dollars per movie to bankruptcy. The answer is: Easily.
Celebrities have a huge challenge in keeping their money. Particularly musicians, film/TV stars and athletes. Right from when they score their first big pay check the odds for financial survival are stacked against them. There are a few simple reasons for this.
- Personality type
The famous faces in the entertainment industry - in general - tend not to have a business education. The artist types studied, if they ever got to college that is, artsy things, you know, like English literature and drama, hippy stuff like that. They were more interested in sitting around in a circle discussing Proust and puffing on some ganja than a banking internship at Goldman Sachs.
Which brings us to personality types, actors and writers are artists, to start with, they weren’t in it for the money. They couldn’t care a less about the ins and outs of a balance sheet. They wanted to read poetry, be in touch with their feelings and cry on their girlfriend’s lap.
As for the athletes, they didn’t go to college much either, they were too busy training and then working in WalMart trying to pay the rent. As for those athletes that did go to college they were too busy training and having sex with cheerleaders. These people weren’t business orientated, they didn’t set up companies, build budgets, write business plans.
Then we come to why they are prey. Many come from a background where there wasn’t much money around and all of a sudden they are sitting on what feels like a massive bundle of dollars, which it is. But then comes family commitments, mum needs a new house and dad needs a new car. Old friends need handouts and so do the sudden group of new friends (of which there are a lot). It is no wonder then that the athlete/entertainer feels a little overwhelmed.
No problem, there's a solution to that: The likes of us bankers and financial advisors, selling well minted entertainers all kinds of financial possibilities. Services that will take away the stresses of handling their own finances so they can snort cocaine from a Playboy bunny’s silicone cleavage without fear of running out of cash.
To put it in simple terms a wealthy celebrity is beset on all sides by people who want something from them. Unfortunately it's not a vocation that attracts the best of the human element.
All of these financial demands starts to add up, there are so many money holes to fill that it becomes impossible to keep track. What started as a trickle of cash outflow becomes a torrent. A few years down the line, hey presto, there’s no money left. All gone. Pockets empty.
Just consider this one statistic as proof: Nearly 80 % of NFL and nearly 70% of NBA players file for bankruptcy within 5 years of retirement. Within five years!!! You only need imagine what that number is for ten years and twenty years after retirement.
It’s harder to find or make statistical data for entertainers, musicians, actors and the like, but perhaps these examples will convince you:
Here's one from the UK. Here's another from the USA (I can't believe I just used Fox News as a source. I shall go shower now)
Robin Williams was a comic genius, his passing is truly sad, unfortunately he won’t be the last entertainer to be burdened with financial troubles. Holding on to your hard earned money in the entertainment business isn't just hard, it's nigh on impossible.