MrFireStation doesn’t read a lot of celebrity gossip or People magazine, but I can’t help notice stories in which wealthy celebrities sue their accountant for mismanagement and running them into debt. Alyssa Milano, according to the Daily Mail, has been left in “financial ruin” by her accountant. The article, which cites arguments included in a California lawsuit, claims that she was “totally in the dark” that home renovations were running millions over budget and that she and her husband were now ‘millions of dollars in debt and their credit in ruins.’
These celebrities (or athletes) gone broke articles seem to happen with a certain degree of frequency. While we are not sitting on celebrity-level net worth, it is hard to imagine that anyone would be so trusting to a single accountant and allow themselves to be totally in the dark about their finances. Especially when her husband is a talent agent at CAA – a company that specializes in helping stars negotiate financial deals.
Nonetheless, it reminds me of the importance of keeping track of everything on a regular basis. My wife and I spend a good deal of time tracking everything down during our annual Round Up Day and have our financial investments well organized on a day to day basis. While we have a financial, advisor, I see no reason to ‘outsource’ our understanding and tracking of our finances. While he is smarter on investment strategies, I always figure that we are our own primary financial advisor, and Jason is our secondary financial advisor.
Why is it that so many sports, music, and entertainment celebrities fall into this trap?
Image Credit: Pixabay