Miss Money Sense: Be like Mike and other celebrities with investing, not their spending habits
You shouldn’t be dreaming of waking up in a new Bugatti like Cash Money Records CEO Baby, who has acquired a $2.5 million Bugatti. The gluttonous spending habits of celebrities are not to be admired. What is admirable are celebrities such as Shaq, Oprah, Michael Jordan and Diddy, who have extensive investment portfolios and who own multiple businesses in addition to their mansions, super cars and private jets.
They understood that the career that made them superstars wouldn’t always keep them center stage and that the money they earned would dry up as soon as the spotlight dims. So they have multiplied their millions in career earnings with stakes in several businesses unlike many celebrities who just spend their money on living irresponsibly and lavishly.
This form of living is irresponsible because many celebrities, including recording artists and professional athletes, seem to spend their money as if they will always have an active career, instead of investing in their future with businesses and sound investments. Look at the recent financial fall of former hip hop mogul Jermaine Dupri, who once ran Atlanta and just lost his nearly 10,000-square foot, mult-million dollar mansion.
Every other month, we read about celebrities and athletes who are in court for tax evasion or bankruptcy. Do they watch the news? When are the new “it” celebrities going to recognize that they started off the same way as fallen celebrities and decide to make more responsible financial decisions?
Shaquille O’Neal paid attention to the news. Earlier this year when he graduated with his doctorate, he explained how he spent $1 million within the first 30 minutes of being drafted into the NBA after leaving college early. His banker called him up and questioned whether the big guy wanted to end up like the athletes he read about who lost all of their money. Shaq woke up, went back to school in the offseason and is now owner of a few hundred businesses, including car washes, burger joints and pretzel shops.
At his graduation, Shaq said it doesn’t matter how much money you make and that it’s more important to educate yourself in order to hold onto your money. It’s very similar to the mantra I share in my second book, Mom’s Money Lessons. It doesn’t matter how much you make, it matters how much you keep.
Instead of trying to duplicate the excessive spending of celebrities, be like Mike, Shaq and Oprah by investing in your future. Allocate a percentage of your earnings, preferably 20%, on a consistent basis toward investments, such as job 401K, a Roth IRA, mutual funds and bonds, to multiple your money. Consider investing in and starting businesses to produce multiple income streams because as Dr. Boyce Watkins often says, it empowers you and you’re less vulnerable to office politics or a job loss.
So follow the lead of celebrities who have stepped back somewhat from the spotlight to focus on building business empires and hefty investment portfolios. Don’t keep being mesmerized by their lifestyles. Don’t get me wrong. You can have nice things, but make sure you don’t put all of your eggs into the possession basket. Spread your money around into things that multiply your hard-earned money.
Teneshia LaFaye is a former award-winning newspaper journalist and a nationally certified financial education instructor. She owns an insurance agency, and she has written two books, What My Mom Taught Me About Money and Mom’s Money Lessons, that are available on her web site. Get her FREE daily money tips to work on improving your financial mindset by “liking” herMissMoneySense page on Facebook.