You may know him from such films as Inglourious Basterds, X-Men: First Class and the Oscar-worthy 12 Years a Slave. As far as Hollywood goes, Michael Fassbender is as hot as they come. Just don’t ask him for financial advice.
A recent Slate article chastised the actor for his “weak grasp of monetary economics and some badly unsound financial advice”. Yikes! Apparently, during the course of an interview with GQ Magazine, Fassy (as we like to call him), admitted he hasn’t quite figured out what to do with the millions he’s earned so far. He is still living in the same East London bachelor apartment he’s had since before all his movie fame. The actor mused about investing in gold and “bricks and mortar” and discussed his worries about inflation.
We think Slate may have been a little harsh. Just like few people are naturally gifted actors, few of us are born financial experts. Fassy is not unlike many celebrities (and many, many people like you, our dear readers) who have focused their time and energy on getting ahead in their own careers and never really learned about how to manage their finances. When suddenly a windfall comes along, or you realize how much savings you’ve accumulated, figuring out a financial strategy can be daunting.
This is why, celebrity or not, spending time to find a qualified financial advisor you can trust is so important. Being rich, famous or well-connected in no way guarantees you will get access to the best advisors or make the smartest financial decisions. As a warning to Fassy- here are just a few examples of celebrities who lost a lot of money due to some very bad financial decisions.
Celebrities who heeded bad advice- and lost big
Jay Z – In a classic case of bad market timing, music mogul Jay Z borrowed $52 million in 2007 to invest in a hotel project in New York. Unfortunately, the property market in the US crashed, the project was scrapped and Jay Z defaulted on the loan. The investment company holding the loan eventually took over the property, but in the months before that happened, Jay Z lost an extra $20,000 per day in interest and costs – to the tune of more than $3.7 million.
Larry King – The famous talk show host sued an insurance brokerage that he claimed “swindled” him out of some $15 million. According to Larry’s legal claim, between 2004 and 2007, he was persuaded to invest in a series of complicated transactions that involved buying and re-selling multi-million dollar insurance policies. Unfortunately, just a couple years later, Larry lost more than $1 million in investments with Ponzi-scheme mastermind, Bernie Madoff.
Kevin Bacon & Kyra Sedgwick – Oh that Bernie Madoff. Among the $65 billion he scammed from some 4,800 investors, were untold millions he pretended to invest on behalf of actors Kevin Bacon and Kyra Sedgwick. While the actual amount the married couple had invested and lost has never been made public, from the sound of their interviews, it was a pretty hefty chunk of their net worth.
Zsa Zsa Gabor – Though she was not named in court records, it was rumored that the glamorous 90-something actress Zsa Zsa had invested between $7 million and $10 million in Bernie Madoff’s investment scheme via a third party money manager. Zsa Zsa and her 9th husband sold her home, artwork, cars and jewelry to try and get solvent. According to reports, her wealthy adopted stepson helped the couple out with a cool $6 million.
Doris Duke – A clear case of ‘the butler did it’. The legendary socialite and tobacco heiress chose her butler to be the trustee of her $1.3 billion estate, much of which she had bequeathed to charities throughout the US. Once she died in 1993, it was revealed that the butler had abused his privileges and was helping himself to the assets. Ms. Duke’s estate ended up in a long-running court battle that ate up millions of dollars she had intended to leave to charity.
Willie Nelson – In Willie’s case, it was the accountant that did it. In 1990, the government showed up at Willie’s door and seized all his property and possessions, claiming he owed $32 million in back taxes. Eventually this was negotiated down to $6 million and Willie sued Price Waterhouse for investing his money in illegal tax shelters. With this settlement money, the singer was able to finally pay off his debts and get his life back in just a few years.
Celebrities, just like us
We hope that Michael Fassbender will find a really wise financial advisor whom he can trust and work with for many years. Trusting someone to handle your money means trusting that the decisions they make on your behalf are in your best interest. The only real safeguard of course, is to educate yourself enough so that you’re not in a position of trusting “blindly”; so you can have productive conversations with your advisor about the investments they suggest and you know at all times where your money is going and what you expect for an outcome. The best advisor will help you to learn and be informed.
And with that we bid good luck and good wishes to Fassy - with your financial strategy and your Oscar dreams.