Celebrity Foreclosures – How Can it Happen?
Two big celebrities faced foreclosure this week, as both Ed McMahon and Evander Holyfield joined the more than one million Americans being sucked under by the dive in real estate values.
Since we idolize and fanaticize about the live’s of the rich & famous, is there a financial reality lesson here?
Ed McMahon: Well, if you spend more money than you make, you know what happens. And it can happen. You know, a couple of divorces thrown in, a few things like that. And, you know, things happen. You want everything to be perfect, but that combination of the economy, I have a little injury, I have a situation. And it all came together.
Pam McMahon: I think over the years, you know, it’s just a kind of a combination of maybe Ed working so hard and not kind of looking at proper management, which happens a lot. … Because you’re a celebrity, people think you have a lot more than you have. And you always want to take great care of all of your friends and your family and everybody, and you do. And you don’t, and I think, you know, we didn’t keep our eye on the ball. We made mistakes.
King: And are they foreclosing?
Pam McMahon: Yes, they are. …
From Larry King.
The 16,000-square-foot home — located on Evander Holyfield Highway — has 109 rooms, including 17 bathrooms, three kitchens and a bowling alley.
Holyfield defaulted on a $10 million loan to Washington Mutual Bank, which will auction off his home on the courthouse steps.
Holyfield has grossed over $200 million US in his career.
How Can Someone Who Made $200 Million Default on a Loan?
Well there is a saying that money is the root of all evil, which personally I don’t believe to be true. But the fact is that money does not come with an instruction manual. Someone without any financial intelligence, even if you give them $200 million dollars, can still have the bad habits that the get the rest of us in trouble.
Add to that, as mentioned in the quote from Mrs. McMahon, celebrity has other pressure, like “keeping up with the Joneses” on steroids as everybody expects you to act like a fountain of money and to never say no to anyone, including friends and family, who come with hands out or shaky business deals.
I find my own dreams of becoming wealthy always get a little bit shaken up when I read stories like this, as it’s not so easy for me to believe that money will provide a live of complete ease and lack of struggle.
This post is featured in this week’s Carnival of Personal Finance hosted at Prime Time Money.