By now you've probably seen the headlines and heard the barrage of jokes on Twitter: Famed hip-hop artist Curtis Jackson III, better known as 50 Cent, has filed for bankruptcy protection. 

Jackson, whose net worth Forbes estimated at $155 million in May, is now claiming both assets and debts of between $10 and $50 million, The Wall Street Journal reports. The news comes on the heels of a court ruling requiring Jackson to pay $5 million to Lastonia Leviston for posting a sex tape of her online. (Following the bankruptcy filing, the lawsuit and collection efforts have been halted.)

50 Cent's bankruptcy certainly begs the question: How is it possible to lose so much so quickly? Jackson was once one of the richest hip-hop artists in the world. In addition to a stream of cash from sales of more than 21 million albums, he had a sizable equity stake in Glaceau's Vitaminwater when it was was acquired by Coca-Cola for $4.1 billion in 2007.

Some are skeptical about the legitimacy of the filing. "50 Cent's bankruptcy seems mainly like a gambit to avoid paying the woman who won the lawsuit against him," says George Loewenstein, a professor of economics and psychology at Carnegie Mellon University. Loewenstein does note, however, that there is considerable fiscal danger associated with a rapid rise to wealth and fame: "Athletes and lottery winners famously do go bankrupt, but they are people who get very high incomes for very short periods of time," he says.

For those highfliers -- or anyone who experiences a sudden windfall -- it's important not to get too comfortable in your (seemingly) solid financial position, because you never know how long it could last. "A lot of time with our clients, there's an accumulation of assets [without] proper planning," says Jeremy Paul, a managing partner at New York City-based RLP Wealth Advisors, which frequently works with athletes and entertainers. Here are some of his top tips for avoiding a bankruptcy filing (as well as some public shaming across social media): 

1. Be choosy about your investments.

There's a tendency on the part of RLP's wealthier clients to invest carelessly in industries like real estate, or in early-stage business ventures, Paul says. What may seem like a good idea at the time -- a $1,000,000 investment in a luxury vacation home, for instance -- could end up beyond your means when you factor in the cost of something like property upkeep over time.

In addition to considering future costs, it's important to know your operating terms. "The operating agreement tells you what your obligation is, but if it's not understood, you can't be expected to understand your commitment," Paul adds.

2. Surround yourself with the right advisers.

It's crucial that you work with astute financial advisers -- in other words, ones that aren't afraid to tell you "No" to certain investments. The best analysts, Paul advises, are the ones who can look at the bigger picture. 

3. Start saving early (and smartly). 

If you've accrued your wealth in a short timespan, you may feel as though you're set for life. Financial analysts warn otherwise. 

"The basic thought that we bring to our clients is that while things may be very good today, things will change. We can almost guarantee that," Paul says. "You need to plan for tomorrow as much as you're planning for today." He adds that RLP's wealthier clients frequently "skip steps" when it comes to their savings, like investing in retirement funds, and instead accumulate surplus assets over time. The foundation of your savings should actually be in liquid investments. 

Published on: Jul 14, 2015