Young entertainers and sports stars are very much like lottery winners who hit it big in a lucky dip. They strike it rich when they least expect; overwhelmed by the sudden gush of easy wealth, they sometimes become broke before the euphoria of their wealth subsides. This lines up with a Yoruba adage that says “the first money a child gets he spends it on bean cake.”
Alice in wonderland suddenly wakes up to a nightmare of poverty; a fairy tale rags-to-riches story runs its full course, our sudden millionaire falls from grace to grass. That’s the usual narrative for folks who come into easy wealth and then throw caution to the wind. We read this kind of sad story every day about music stars, thespians and celebrated athletes worldwide.
It is said that nobody goes to Hollywood, makes it big and retains their normalcy. They end up larger-than-life. And that’s where the problem lies. Like the lottery winner, the young nouveau riche celebrity is almost certain to be a financial illiterate. Much money is likely to slip through his fingers since he does not know how to manage wealth. His fortunes came probably through a single event, like a stellar performance on the movie screen, field of play, the musical stage or hit recording; just like a lottery, jackpot.
Even though it may be argued that the star worked hard for his money and, therefore, deserves it; sure, but not much like a company executive or a factory worker who accumulates his modest fortune through long hours, perhaps, years of hard work. These ones suffer more for their money, and so are likely to be more prudent in its management. Not so for our star musician, actor or sportsman, who hits a vast fortune with a single mega deal like multi-million-dollar sign-on fees, or endorsements.
This kind of money, certainly, is worked for, but it is not a normal wage or earnings. When the recipient gets such big pay, it changes everything about them in an instant. Such changes can be seen in new mansions, luxury cars, expensive designer clothes and accessories, dream holidays to exotic locations, and general conspicuous consumption. Then you have the entourage who drain resources for doing nothing other than being part of the party. The new superstar’s social status has changed overnight and so is his spending habit, which invariably becomes his undoing.
The truth is that expenses rise to meet income. High incomes attract high expenses. As income increases, so do bills and needs. That’s one thing people do not know. Our entertainers and sport stars do not understand that mega deals do not come every day. A star can only break once, you top a performance or win a big deal sometimes, not every time. And every celebrity is like a product with a shelf life. No star shines forever. Every generation or season produces its stars.
Since stardom is ephemeral, you have to make the most of your sudden wealth by investing wisely in tangible assets that add value with time. Only property, precious stones like diamond, jewelry and the likes give you that. On the short term, good investment advisors can help you manage a good portfolio in the capital market, and in the money market as well.
When you hit wealth, you need to engage honest and talented portfolio managers to help you manage your funds. They may help you set up viable business and put your money in safe securities. Celebrities must know that one way to increase wealth is to reinvest it. It is better to save it on fixed than liquid assets because the temptation is always there to withdraw at the slightest pressure.
I have observed that young music stars rush to buy or erect mansions in exotic estates like Banana Island. While such highbrow locations are viable, it is not advisable to build customised houses that have no commercial value. They may be difficult to let if you decide to let it; or hard to sell, if you need to sell. Build houses that are letable and easy to sell. If you want to live your dream by building an expensive villa, you must be ready to pay huge bills to maintain it. You also have ground rent, tenement rates and other recurrent expenditures to contend with.
My take is that, if a young celebrity must build, erect something serviceable, with a good resale prospect. Don’t invest in expensive cars. Just one expensive car is enough because automobiles quickly run out of fashion. You’d always have new models every year. Don’t squander your fortunes on vehicles, aircraft and other dream “rides,” they have no profitable resale value. By all means enjoy your wealth, but know that it is a visitor, if not well treated, it disappears.
A celebrity should constantly invest in himself and strive to be on top of his game. That’s one of the best investments you can make for yourself. Always improve your craft; be the best you can be in your generation. Look at Lionel Messi and Cristiano Ronaldo, two of the world’s best footballers who have shared 10 of the awards for the world’s best footballer prize between themselves in the last 10 years. That’s a hard act to follow.
Weekend Spice: If you cannot save money, the seed of greatness is not in you.”
– W. Clement Stone
Ok, folks, that’s some food for thought. Let’s do it again next Friday. Stay motivated.
•Ladi Ayodeji is an Author, Rights Activist, Pastor and Life coach. He can be reached on 09059243004 (SMS & Whatsapp only)