In fact, according to those who know, they aren’t all big spenders and they don’t all have immaculate financial records. They don’t all live in palaces and throw non-stop parties. A fair number of them have money they don’t know how to manage.
Consider these facts and see if there is anything you can learn about managing your resources:
Some of the rich rent, don’t own, their residences. The renters include Diane Keaton, Meg Ryan and Jane Fonda. Queen Latifa rented 4,700-square foot digs in Atlanta for $10,000 a month. Probably not a reasonable example, but proof that people who change residence quite often could find renting a better option.
Just because people have money is no surety that they know how to manage it. Often they have accumulated their wealth through very hard work and expert use of innate talents. In most instances, they protect what they have amassed by hiring financial advisors to oversee the details. For instance, Mark Zuckerberg, who started Facebook while still in college, relies on Divesh Makan for financial advice.
Perfect credit? Naw. Having lots of money creates a terrible temptation to spend it. Not every celebrity has a credit rating that would make Mom proud. Lindsay Lohan, whose escapades with the law have been notorious, reportedly owed $600,000 in credit card debt at one time, a load that would required some $15,000 monthly in payments. Your credit rating will reflect your spending choices, so beware. On the other side of the scales are many rich folk – Zuckerberg, for instance – who practice frugality and dress like the masses. Warren Buffet, third richest man in the world, with income of some $37 million per day, lives in the home he purchased in 1958 for $31,500.
With all kinds of money to toss around, you would think the rich are never in debt. Not so. Sometimes the big paychecks and endorsement income is matched by the same level of debt. Boxer Mike Tyson once owed the IRS $18 million. A whole string of celebrities are in the same boat.
Since money seems to beget money, you’d guess that the rich all come from rich families. Again, wrong. Few of today’s wealthy came from “silver spoon” backgrounds. Though there are well-known names that have a happy-finance history, many of today’s rich are the self-made variety who made good use of the American dream. TV talk show diva Oprah Winfrey, for one, was born into a poor family in Mississippi. Starbucks CEO Howard Schultz grew up in a housing complex for the poor in Brooklyn. Inheritance is not the only road to success.
Bankruptcy is not a foreign term to the rich. Among those who have been through the process – and bounced back – are Henry Ford, Walt Disney, Milton Hershey and H.J. Heinz. Hotel mogul Donald Trump has been through bankruptcy four times, but today he’s worth $4 billion.
Many of the super-rich live on budgets. And though their budgets are inevitably fatter than the common man’s, they are under the same constraints to keep their spending within bounds. Actress Keira Knightley told a Glamour Magazine reporter that she has been limited to a $50,000 annual budget since 2012, although her net worth now is $50 million.
In short, though the differences are on a large scale, the multi-millionaires of the world must obey some basic economic rules just as others do or they find the easy-come, easy-go route in full effect.