Stars, They’re Just Like Us: Broke / Going Bankrupt

I am accustomed to thinking that people who have more money than I do have it all figured out; that life, for them, is a gentle upward slope; that, since cash begets more cash faster than rabbits beget bunnies, once someone Makes It they should be set for life. In other words, I am kind of an idiot. As several prominent examples have shown us recently, so very many things can go wrong. Success is not a Hazmat suit. At the peak of her career, in the ’90s, Parker Posey found herself nearly penniless:

While filming a part as a Rollerblader in Nora Ephron’s “Mixed Nuts,” she realized she had $1.75 in her checking account. “I was famous, and I was counting change,” she said. “I was broke.”

A successful singer in a boy band is probably right to wear 12 layers of clothes on a flight — and then collapse from heat exhaustion — in order to skip the baggage fees, because even if you have money today, you never know where you will be tomorrow. (Children, please do not try this at home.)

Most current case in point: 50 Cent is filing for bankruptcy protection.

In court papers filed in the U.S. Bankruptcy Court in Hartford, Conn., Mr. Jackson reported assets and debts each in the range of $10 million to $50 million.

Business Insider details exactly how dramatic a turnaround this is:

50 Cent was previously one of the world’s wealthiest rappers, largely thanks to his minority stake in Vitamin Water. In 2007, the Coca-Cola Company acquired Vitamin Water from Glacéau for $4.1 billion.

According to The Washington Post at the time, “50 Cent was thought to have walked away with a figure somewhere between $60 million and $100 million, putting his net worth at nearly a half billion dollars.”

While the rapper no longer has an equity stake in the company, he continued to act as a spokesman for Vitamin Water.

Additionally, the rapper’s studio albums alone have sold more than 21 million units, and he has starred in a long list of film and TV projects, including Starz’s new hit “Power.”

In May, Forbes estimated 50 Cent’s net worth at $155 million, ranking him No. 4 on the list of the wealthiest hip-hop artists.

I’m curious whether Forbes will issue some sort of statement. Where did it get its figures? Did it fact-check them? Or did the money evaporate between then and now?

Anyway, don’t sweat it, 50 Cent. Donald Trump’s companies have declared bankruptcy four times and he’s still in the game, which is to say, he is valued at $4 billion and is running for President of the United States. Filing for Chapter 11 is basically a rite of passage for an American entrepreneur.

For all our sakes, I hope that 50 Cent’s money woes came at the hands of an untrustworthy accountant and that he will channel his anger into an epically NSFW, Tarantino-esque music video the way Rihanna did.

Though Rihanna dropped her lawsuit against her former accountant Peter Gounis, it looks like she litigated — and won — her case with the video for “B — — Better Have My Money,” which debuted last week.

If nothing else, “BBHMM” serves as a seven-minute dose of wish fulfillment in which Rihanna gets to exact revenge on her nemesis, “The Accountant.” In the video, Rihanna kidnaps his wife and holds her for ransom before subjecting him to the “Dexter” treatment and dispatching of him in a bloody manner.

What exactly did the accountant do, anyway?

Rihanna started the year with $11 million in cash, and ended it with $2 million after buying a Beverly Hills mansion (which may have been used to film the second season of “Paris Hilton’s My New BFF”) and losing money on her Last Girl on Earth tour. The house was plagued with mold and water damage, and she ended up taking a $2 million bath when she finally unloaded it.

According to the 2012 lawsuit she filed in federal court and obtained by The Washington Post, Rihanna accused Gounis, accounting firm Berdon LLP, and Berdon partner Michael Mitnick of negligence and gross financial mismanagement. She claimed Gounis and Berdon charged “exorbitant” commissions (23 percent of her net income) and concealed the true nature of Rihanna’s finances to take advantage of her. She accused Gounis and the firm of hiding the fact that her tour was in the red while charging commission for managing concert finances and advising her to buy the house.

Hm. I have to say, having seen the video, I expected the story to be a little tawdrier or at least more exciting. But at least she spun straw into gold.

In case you’re curious (I was!), here’s how the rich stay rich, according to the BBC:

Aircraft leasing is one budding area of investment, said Ian Marsh, CEO of asset management for London-based Fleming Family and Partners, a wealth management firm that was initially created to preserve the fortune of Ian Fleming, the creator of James Bond.

His clients work with a company called Doric, which uses investor money to buy planes which are leased to large airlines, such as Dubai-based Emirates Airlines.

Investors will eventually cash out of the fund when those planes are sold, but they can make a 9% annual yield in the meantime from the leases alone. The average yield on the Standard and Poor’s S&P 500 — America’s main investing benchmark stock basket — is about 3%. …

Ultra high-net worth investors in the UK and elsewhere are also buying up farmland. As the global population grows, demand for food will also increase and those who own prime agricultural land could see good returns, said Marsh. Arable land is a finite resource — the harder something is to come by the better the return.

According to Marsh, good land can earn a yield of about 4% a year for an investor, plus appreciate in value over time.

They also start businesses, which can work or can really, really not work — see above, re: Trump.

It also helps, as WikiHow reminds us, to live within your means:

Don’t be fooled into believing that you have so much money that you can never spend it all. People who have won millions in the lottery have lost it all because of that belief. Even with a fortune, you need to budget like a middle class family. You need to establish a budget that allows for your wealth to continue building. If it seems that you are breaking into your savings for everyday expenses, then you have to cut back and recalculate a budget that is more within your means.

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