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Tags: Hollywood | Retirement

Lessons in Finance From the Famous

James Hirsen By Monday, 29 June 2015 12:50 PM EDT Current | Bio | Archive

Success in the music, sports, and entertainment industries is frequently marked by an increase in personal financial resources. The material enhancements often occur to such a heightened degree and in such a rapid manner that the celebrated beneficiaries are left unprepared to effectively deal with their circumstances without the assistance of professional guidance.

Many well-known celebrities have found themselves in financial ruin, despite having had huge amounts of money placed within their hands.

Actor Nicolas Cage, boxer Mike Tyson, rapper MC Hammer, actress Kim Basinger, and singer Willie Nelson are a few examples of some of the famed individuals who unfortunately ended up with their balance sheets in negative territory.

Sometimes this ill-fated phenomenon occurs as a result of a person having spent an enormous amount of money in an extremely short period of time, leaving the individual in a situation in which more money is owed than is held in his or her possession.

Standing in stark contrast to the above money management situation is a proactive method used by Rob “Gronk” Gronkowski, whose claim to fame is having played tight end for the New England Patriots of the National Football League (NFL).

In his autobiography, “It’s Good to be Gronk,” the acclaimed football player reveals that, after having received $16.3 million plus in signing bonuses and additional contractual payments over five seasons in the NFL, rather than indulging in a lavish lifestyle he instead saved all of the cash.

“I live off my marketing money and haven’t blown it on any big-money expensive cars, expensive jewelry, or tattoos and still wear my favorite pair of jeans from high school,” Gronkowski wrote.

The football standout had the good fortune of having signed a six-year, $54 million contact, with an $8 million signing bonus. He also garnered endorsement income from Dunkin’ Donuts, BodyArmor SuperDrink, and other commercial products.

Gronkowski’s financial formula is not exactly commonplace among professional athletes. According to the Washington Post, 1 out of every 6 NFL players ends up in bankruptcy court within 12 years of having left professional football.

Another celebrity who has used a similar approach to the handling of his personal finances is former host of “The Tonight Show” Jay Leno. In a column penned for Parade Magazine, the comedic television personality disclosed that he set aside the salary received from the many years spent hosting “The Tonight Show.”

Throughout the show’s tenure, he continued to work as a stand-up comedian and lived off the monies earned from comedy club performances. “When I was a kid, I had two jobs,” Leno explained. “I worked at a Ford dealership and at a McDonald’s. I’d spend the money from one job and save the money from the other. That’s still the way I am now. I live on the money I make as a comedian, and I put all the TV money in the bank. I’ve never spent a dime of TV money — ever.”

Leno’s income from his late-night hosting position amounted to approximately $15 million annually during the latter years of his contract.

Tyra Banks is another example of sound celebrity financial management. The supermodel and former reality television personality was the creator and host of the long-running reality TV program “America’s Next Top Model.” She also hosted her own television talk show, aptly named “The Tyra Banks Show.”

Part of the reason that Banks has been able to accumulate a sizable net worth is the fiscal discipline she imposes upon herself with regard to her lifestyle. Banks consistently maintains a simple wardrobe, writes out notes sans use of a “smart” device, and saves rather than splurges.

“I am frugal. I’ve always been this way,” she told The New York Times. “When I was young, my mom would give me my allowance, and I’d peel off a little each week and have some to spare.”

Gronkowski, Leno, and Banks exemplify a principle that has enabled countless individuals and families to maintain fiscal health and achieve a level of financial freedom that brings internal peace.

If a financial Golden Rule could be put into words, it might read as follows: “Spend less than you earn and you will earn peace of mind.”

James Hirsen, J.D., M.A., in media psychology, is a New York Times best-selling author, media analyst, and law professor. Visit Newsmax TV Hollywood. Read more reports from James Hirsen — Click Here Now.

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Many well-known celebrities have found themselves in financial ruin, despite having had huge amounts of money placed within their hands.
Hollywood, Retirement
Monday, 29 June 2015 12:50 PM
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