Last week, Gary Busey passed a mandatory online financial management course in an effort to show a U.S. bankruptcy court he'll begin to manage his money in a sensible way. Busey recently filed Chapter 7 bankruptcy but he's not the only one. Mike Tyson, Toni Braxton, Vince Neil, Larry Wilcox, and Stephen Baldwin have all filed for bankruptcy recently, according to Fox News Here's why stars go broke.
Some celebrities live extremely lavish lives, without realizing that fame and the fortune associated with it, can be fleeting. Many stars in Hollywood have a personal chef, stylist, assistant, and more. Yet many continue to pay for these services even after their income drops.
Stars often get addicted to drugs, alcohol, and hard partying. This can greatly effect their finances. “You are far more likely to make poor decisions when under the influence of drugs or alcohol. When you’re dealing with celebrities, the problem is that their support groups, (friends, family, entourages, et al), often consist of enablers,” Richard Taite, the Founder and CEO of rehab center Cliffside Malibu, told Fox News.
Celebrities can also fall victim to poorly worded deals, corrupt business managers and advisers. Many stars also lose their money because they hire friends. Dane Cook's half-brother Darryl McCauley, was ordered to pay Cook $12 million in 2010, after he plead guilty to embezzling money from Cook as his business manager.
Some celebrities don't have the necessary skills to find the best financial planner for their needs, Pete Krainik, Founder and CEO of The CMO Club, a networking resource for top marketing executives told Fox News.
“Because they don’t think of themselves as brands, they don’t put the efforts or plans in place to maximize their value for endorsement deals,” Krainik told Fox News.
“Most celebrities have extremely creative minds. But in my experience, the most creative folks tend not to want to spend time dealing with business issues,”tax and business expert Joseph M. Doloboff, Partner at Blank Rome LLP in Los Angeles told FOX411’s Pop Tarts column.
Even though celebrities hire financial planners, the accounts are still in their names, which gives the celebrities ultimate control over their riches, Certified Financial Counselor for Financial Advice for the Artist, Erin Elizabeth Burns, told Fox news.