How To: Lose the Farm
Seems Mike is in default by some $25 million. And to think, Visa gets all in a twist if you short them 25 dollars. Should he still be behind on March 19th, one of the most famous properties in America will be sold.... at the court house steps! Thats right. Bring your cash and be ready to bid on the 2,800 acre ranch in Santa Barbara County, California, because this train wreck of a celebrity home will be sold to the highest bidder.
What does this have to do with your personal finance practices? More than you think. Do wealthy people really have it that easy financially? In a word: No.
The lesson here: No amount of money will out pace your own financial stupidity.
During his 2005 trial, it was stated, by a forensic accountant, that Jackson had a net worth of negative $285 million based on assets of $130 million and liabilities of $415 million. On the bright side, those assets do not include his two most valuable - his own back catalog and the Sony-ATV catalog containing the rights to over 200 Beatles songs. Those are valued at anywhere from $1-5 billion. On the down side, those music catalogs were used as collateral for a line of credit with Bank of America. That debt stood at $278 million as of 2003. What, no one would give him a HELOC? Kidding, kidding. In all seriousness, the expert witness testified that even if Jackson sold his remaining interest in the Sony catalog, he would look to net around $40 million after taxes and paying back Sony for cash advances and investment costs. Eeek!
He has made some smart moves. He purchased that Sony catalog at auction for about $47 million in 1986. He then sold half to Sony for $90 million in 1995 - thus implying it had quadrupled in value over 9 years. By 2007 it was estimated to be worth $1.6 billion?! What an investment! But yet he is unable to live on less than he makes. In 1999, he had a reported income of $11.5m, but with expenditures of $20m. You just can't sustain that kind of stupidity. Not even with his incredible earning power.
Thus, losing the entire farm, just because he can't control the man in the mirror.
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1 comments:
Celebrities are famous for their best and unique talents that people are admiring. Despite their good status in life, sometimes they are experiencing financial dilemmas. Therefore, even personal and real properties are being forced for sale to use the money in some needs. The singer, King of Pop, Michael Jackson, has been in an increasing amount of legal and financial trouble for years. Two of the items up on the auction block are the gates to Neverland Ranch, and the white glove that he wore in the music video of his song "Billy Jean." He's been called, "Wacko Jacko" and he have been in financial trouble ever since 2005, after his second trial for child molestation and the near foreclosure of the Neverland Ranch, which he hasn't operated or used since. From that time on the pop artist, with the best selling album of all time, has been the most high profile recluse in the world, and just recently settled a lawsuit from a member of the Bahraini royal family, who had contracted a book and album deal with Jackson in exchange for living expenses during his time spent in Bahrain. A spokesperson for the auction states that it isn't a forced sale, yet some have claimed that Jackson has been living beyond his means for years. Click to read more on Payday Loans.
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