I’m surprised no one has brought up the fact that no matter how much you make, you can spend more.
I skimmed through that article a little bit. What do these women actually do?
When folks say they wouldn’t be able to spend a large lottery jackpot I scoff at their poor imagination. Land, buildings, vehicles, planes, aircraft carriers, islands, countries. Maybe Hasselhoff got creative.
[quote=“White SIFL, post:11, topic:755260”]
This is a good of a thread as any to post my favorite comedian roasting The Hoff:
[/QUOTE]I miss Greg. He made those roasts.
Hi, welcome to the Straight Dope board!
$1.79 mil in assets?
Sorry, you don’t get to cry poor. Followed some bad advice? Taken in by the untrustworthy? Spent like a fool? Owe large to ex wives and kids? No one cares! Sell your big mansion, one of your several cars, stop jet setting around and living large! Don’t sit in your mansion, and from the pages of a glossy magazine, cry poor because you’re cash shy at this moment in time, trying to weasel out of your obligations to your family. Not your creditors, your family!
And please let’s avoid blaming his ex for a large alimony payment. Men with big wallets score hot models and young, shallow things by throwing around their money and power. Then act all butthurt at divorce settlement time, shocked to discover, 'She’s all about the money!" Really?
they make a show of bringing entire bottles of liquor to your table (at insanely marked up prices) and pouring drinks at your table instead of bringing them from the bar.
So for the most part they help you show that you have that kind of money.
We didn’t just repeat your point. You simply said a rich person can spend a lot of money. Icarus, Patch, and I made the point that the key factor is the difference between what you make and what you spend - that, and not how much you spend, determines whether you go broke. Other people have spent more than Hasselhoff did without going broke because of this. Pool talked about the separate issue of how rich people face ways of spending money than regular people do not. And Lamia talked about the possibility of money being lost by incompetent or criminal managers, which has nothing to do with the issue of spending too much.
Yes, a succesful “working” actor/writer/director/musician may, like any other person who works hard and is good at what s/he does, make a career of it earning a respectable income and saving up for a decent retirement. OTOH getting that one Big Hit that puts you into the multi-hundred-million dollar household-name league is more akin to being a star pro sports player, a very rarefied sphere where every last factor both innate and external lines up just right for an unpredictable period of time, and vulnerable to not having prepared.
That said, it does seem a bit :dubious: that this comes up in an alimony dispute, makes it sound like strategy (though however I don’t consider spousal alimony to be as privileged as child support and yes it should be adjusted as the person’s situation varies).
Sorry, but yes he does. At least in respect of having to pay a quarter of a million a year. That $21K is per month, not year. If he earns 10% on his assets, that’s only $179K, $70K less than his alimony. And realistically, he’s only going to earn 5% or so.
How he lost his fortune is irrelevant.
Yeah, no…
Sorry - net assets of 1.79 million + a million a year in income is not hurting, even if he is paying a quarter of his gross income in alimony. Downsizing in such a situation is not particularly difficult. He just doesn’t want to.
I shed no tears for his plight.
And old classmate of mine is in sports management and what she tells me that most sports players, even those at the top only really make enough for a middle-class lifestyle over the long run, sure you might make millions, now, but most of the earnings are for a few years and even those who are careful have huge costs. Remember they have dieticians, trainers, accountants, managers to pay off, might require some expensive surgery and end up paying huge amounts in taxes.
I’m sorry, I missed the $1M / year income. As such I’m sure he can afford the $250K (and isn’t that paid gross of tax?) alimony.
Apropos of nothing, I know the guys who made that movie! (Well, I was friends with them in middle school, and we are now facebook friends). They also did the ESPN documentary about the Miami Hurricanes (“The U”), and their most successful project was a documentary about the Miami drug scene in the 1980s (“Cocaine Cowboys”).
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[QUOTE=Pool]
A lot of these cars and houses that celebrities buy just cost insane amounts of money to maintain and insure, its not just the luxury itself but the cost of ownership too.
[/QUOTE]
I really think that this is the crux of it. Sure, you may be flush with cash and able to buy a $10 million mansion outright. But will you have the liquid assets to pay the real estate taxes each year? What about the utilities on a 10,000 square foot home?
A private plane? You could buy one for a few million. But every few months, it is going to need to go in for maintenance, and it won’t be airworthy again until you cough up tens of thousands (if not more). Never mind the cost of airplane fuel.
Your souped up fancy sports car? Maybe you put a few hundred grand on the table and walked out of the dealership without borrowing anything. But, because it is so high precision, it needs a tune-up routinely, and you have to go to the specially trained mechanic, who can only get replacement parts from Europe.
So, you can be rich and buy lots of stuff without going broke. But to keep the stuff, you are going to have to maintain your cash flow.
Apparently my faulty memory. The actual number is 70%. The cite (linking from my phone is a pain in the ass) comes from the National Endowment for Financial Education.
In any case, the number of people who win a lot to then blow it all is high.
Sleep
Oh look, Flyer posted. No need to keep posting. Let’s close this thread down!
IIRC Hasselhoff was an on again/off again chronic alcoholic and recreational drug user for much of his professional life so I can guess a lot of money went into bad decisions. Plus at 63 I don’t imagine he’s pulling in huge piles of cash these days and a quarter million a year in alimony …forever is a big load.
I don’t fully understand this. First, tens of thousands of dollars for these guys is like me or you handing out a $20 bill. Maintenance and taxes on these items aren’t huge unless they are already in trouble. Second, if the taxes and maintenance do become an issue, they have a valuable asset that they can sell for liquid cash and to be relieved of the ongoing maintenance and taxes.
Other posters have said that they wasted their money on land, buildings, airplanes, etc. That is sort of a Brewster’s Millions type problem. You still have a valuable asset at the end of the day that typically appreciates. Let’s say I win the megabucks lottery and get crazy and buy a $10 million dollar mansion on my own private island. Ten years later I am dirt ass broke because of my poor lifestyle choices. I can probably sell the mansion for $17.5M (along with the island) and retreat back to a decent lifestyle, after paying my bar tabs. Which leads to the:
Things that come to mind for me? Gambling, drugs, prostitutes, “bottle service”, ridiculously lavish hotel rooms, and "helping friends. Those sorts of things, done repeatedly and without proper guidance, could be the downfall of most anyone.
I say “most” anyone because for some levels of wealth, it is virtually impossible to piss it away. Let’s take Bill Gates at a net worth of $50 billion. Even if he invests it in a checking account that pays 0.2% interest, that is $100 million per year. If he invests it a conservative portfolio at 3% per year, that is $1.5 Billion per year. He could have Heidi Fliess escorts bringing him booze and cocaine 24/7 and still not run out of money.
To be fair, the ex is calling BS on the Hoff’s assertions and claims he actually still has a whole lot more assets than he says.
It is not always easy to liquidate a major luxury asset, especially if you did not unload in a timely manner before things started heading downhill – plus, many of the celebs overleverage their acquisitions anyway, as opposed to doing pay-as-you-go, so they may not have that much value in the asset. And celebs seem to have a disturbing tendency to accumulate back-tax debt, too.
Biggest part of it I say is failure to prepare for reinsertion into a more normal level of being rich. Even going from making tens of millions to just one or two you need to adjust, but if you do so succesfully you’re still one of the 0.1%. And there is always a certain financial inertia, from personal experience I know that facing a 50% loss of cash flow it takes a while to reacclimate yourself completely to “wait, $1,000 WILL be missed next month” and in that time you can lose a heap.
Re real estate Your “valuable asset” is a most often very high end real residential estate and that has been highly customized. These properties and their owners often take a HUGE bath on resale especially if it’s a down market or their changes are so pimptastic that the new owners will have to virtually start over again. Many are lucky to get out of it what they put into it and some HAVE to sell quickly which means even more price compression. In some cases we’re talking about tens of millions of dollars in losses. Plus in an up and down business like entertainment it’s hard to plan out long term recurrent expenses like taxes. Just the taxes on some high end real estate can be a half million dollars year or more. It all adds up.