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The Carr Report...Sound money advice from the rich and famous
A recent article in “Money” Magazine entitled “They got older too” asked several pop icons from the late 70’s and early 80’s what they have learned about money in all these years. Many of their answers will surprise you.
Like most people, I’m fascinated by the lifestyles of the rich and famous. These are people who’ve climbed to the top of their profession. They earn more money in one year than most people earn over a 30-year working career. What’s interesting to me is the fact that they earn their money entertaining ordinary people, doing ordinary things in an extraordinary way. Yet ordinary people spend themselves broke trying to emulate celebrities by spending extraordinary sums of money to come across as anything other than ordinary. Here’s some money saving advice. Be yourself! Your individuality is God’s gift to you! It’s what makes YOU extraordinary.
I’m always curious to see what celebrities have to say about money. I like to know what their views are on working, spending, saving and giving. I must point out that there’s a huge distinction between being rich and being wealthy. Being rich is simply working hard and earning a large sum of money. Being wealthy is when your have an asset base where the interest, dividends, royalties, capital gains, and rental income is sufficient to replace your earned income. When you’re rich, you still have to work to make ends meet. When you’re wealthy, you’re making money while you’re sleeping or while you’re lying on the beach. It’s my goal to build wealth as well as show you how to build wealth.
Here’s what Robin Leach host of a popular television show in the 80’s “Lifestyles of the rich and famous” had to say about celebrities. “Celebrities are nowhere as rich as some people think they are. You generally find that the number of very wealthy celebrities is not more than a couple of handfuls.”
Why is that the case, you ask? A good celebrity with marketable skills, talent, or personality is in demand for about 7-years tops. When they’re in their glory, they mistakenly believe that they will be hot for years to come. They spend lavishly based on this belief. As the saying goes, “When you’re hot you’re hot and when you’re not your not.” When their fire stops burning and they’re no longer earning high levels of income, they have to rely on 7-years of extraordinary earning to provide for them for a lifetime. With the excessive lifestyle that they’ve grown accustomed too in their glory years, they eventually run their money well dry.
Below are sound money quotes of celebrities that were hot in the early 80’s. Notice that the first two are still hot in the new millennium. I wonder if there’s a coincidence that their view on money is what kept them humble and hot over the years. For a complete list of money quotes from celebrities of the 80’s, check out March 2007 issue of “Money” Magazine. I selected a few quotes that were consistent with the financial principles that I teach. Here’s a quote by Arnold Schwarzenegger that was simply too funny to leave out: “Money doesn’t make you happy. I now have $50 million but I was just as happy when I had $48 million.” They voted him “Governor”?
Denzel Washington—I’m just not the acquisitive type. I have three cars. That’s as extravagant as it gets for me. My watch cost me $39. It keeps good time. Why would I need a more expensive watch?
William Shatner—For the longest time I could never get ahead more than a few hundred dollars— no matter how well I did or what job I got, and no matter how hard I tried to pare expenses down. With three kids it was always very, very tight. It was always a scramble for what was my next job. So I learned never to go into debt because I don’t want those monthly payments to preoccupy my thoughts. I never spend more than what I can afford and I don’t owe anything. I tell my kids not to buy anything on payments and that includes cars and houses.
Bob Cowsill—No matter what business you’re in, you need to educate yourself about the finances of the business. I didn’t have to fall apart financially. I should have parlayed the success we had as The Cowsills into my own personal success. Instead, I was getting things I couldn’t afford which trashed my credit rating. I still can’t buy a house. I created my own nightmare with the IRS because I didn’t pay taxes for five years. You have to think ahead while you’re young. Don’t use credit cards to ruin your credit. I made bad financial decisions because of my ignorance.
Bradley Whitford—My father used to tell me a riddle: Who is happier, the guy with $11-million or the guy with 11 kids? The answer is the guy with 11 kids. Why? Because he doesn’t want more.
Grace Slick—Financially, I always listened to my father, a Republican investment banker. He told me if I always pay my bills with one-third, save one-third and screw around with the last third I’ll be okay no matter how much I earn. It’s the one thing he said that I listened to and I have never been in any financial trouble.
(Mortgage and Personal Finance Expert Damon Carr is owner of ACE Financial. Sign up for Damon’s FREE “Ask Damon” e-Newsletter at www.allcreditexperts.com. Damon can be reached at 412-856-1183.)
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