It's not just lottery winners who have been known to file bankruptcy a few years after cashing in--a lot of celebrities are guilty, too. It's usually due to poor financial planning, indulging too much, not having a good support system, and not having much experience with money in the first place. Regardless of how much (or little) you have, financial planning is part of your company's overall well-being. Like Alexa Von Tobel said, "A good financial pan is a road map that shows us exactly how the choices we make today will affect our future." Celeb status doesn't make you immune.
While celebrities always have, and always will, file for bankruptcy from poor financial planning, some of them make bigger blunders than others. And some of them, through ingenuity and talent, crawl their way back to respectability and success yet again. Check out these well-known celebs who got stuck in the red and found a way out. Here's how they did it.
1. MC Hammer
Perhaps one of the most famous celebrities to ever file bankruptcy, during the height of his career in the early 1990′s, Oakland's MC Hammer was worth about $33 million. He was a young man at the time, and spent lavishly on everything from dancers for his tours to more luxury-type items like racehorses.
Popularity is a brutally fickle thing in the music business, and no Hammer albums sold as well as his iconic 1990 album "Please Hammer Don't Hurt 'Em." All those expenses caught up with him and he was $13 million in debt when he finally filed for bankruptcy in 1996. Through perseverance he has reinvented himself, earning an almost cult-like status in VC and Tech circles all over the country, having now worked out promotional and investment deals with several firms. As Hammer has said, "Money has never been an issue with me. I will make and continue to make plenty of money." It doesn't look like this will change any time soon.
2. Kim Basinger
Very few actresses can boast of a more impressive resume than Kim Basinger had in the 1980s. She starred in 1983′s Bond film "Never Say Never Again" with Sean Connery, "The Natural" with Robert Redford, "9 1/2 Weeks" with Mickey Rourke, and played Vicki Vale in Tim Burton's "Batman." Basinger ran into trouble in 1993 though when she pulled out of her planned role in "Boxing Helena." The film studio sued her for $8 million. Just a few months later she filed bankruptcy and eventually settled with the company for $4 million.
Basinger never spoke much about the bankruptcy, but things like these often happen because of overall spending patterns (In 1989, she notoriously considered buying the town of Braselton, Georgia for $20 million, which never worked out). As an entrepreneur, there's not much you can do after a bankruptcy but carry on, and that's exactly what she did. She landed impressive roles in "L.A. Confidential" and "8 Mile," among others, and at this point has appeared in 38 films in her nearly four decade-long career.
3. Wayne Newton
There was a time (1983 in fact) when Wayne Newton was the most handsomely paid entertainer in the world. However, within a decade of winning that Guinness Book of World Records title, he was $20 million in debt. He blames bad investments for it all. However, Newton came roaring back with steady, hard work, and has entertained millions now. As one of the great Las Vegas legacy performers, he signed multiple long-term deals with with several resorts over the years (The Stardust and Tropicana among others) that ensure he is healthy financially to this day.
4. Toni Braxton
Some celebrities have to learn tough lessons twice. Toni Braxton filed bankruptcy in both the mid-90s and in 2010. She claimed to have owed about $50 million the first time around. However, less than a year after her 2010 filing, she bought a house for $3 million. Bad habits die hard, but hopefully she's learned some financial savviness the second time, as she is still making albums, doing musicals and appearing on reality TV.
Nobody is exempt from sometimes making poor spending decisions or bad investments, even famous entrepreneurs. However, it's how you handle the fallout that counts. Emulate these celebrities. No matter how hard they stumbled, they rose back up again. With bankruptcy, though you may feel as if your credibility and reputation have been harmed, everyone loves a comeback. Consistent hard work and perseverance over time will remind your detractors what got you to the top in the first place.