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Celebrity Financial Fails: Top Five Boom to Bust Tales

By Alex Rankin on June 25, 2022

Reading Time: 4 minutes

Everyone loves to read about the lifestyles of the rich and famous and the celebrity financial fails that comes with them. It’s fascinating to learn how the other half live and find out what’s possible when you achieve such levels of success.

However, sometimes it’s also fun to just amuse yourself at the ridiculous things celebrities spend their money on or how questionable business moves can lead to celebrity financial fails of epic proportions.

Key Takeaways

Do not promise more than you can offer

Research what you are buying

Do not launch a mortgage company before a housing crash!


Nicolas Cage – splashed his cash on eclectic purchases

Nicolas Cage is well-known for the often zany characters that he plays on screen. It turns out that this trait also crosses over into his spending habits.

Between 1996 and 2011, Cage pocketed a massive $150 million from films such as Snake Eyes, Gone in Sixty Seconds and Windtalkers. This made him one of the highest paid actors around (and also one of leading figures in celebrity financial fails).

Cue the spending spree.

In 1997, he purchased an extremely rare Lamborghini Miura SVJ. The car had belonged to the former Shah of Iran (also known for his spending habits). It was seized by the Government following the Iranian revolution in 1979, eventually ending up at auction where Cage bagged it for  $500,000.

In 2006, he spent $3 million on Leaf Cay, a private island in the Bahamas. It’s currently on sale at $8.5 million so; at least, Cage got himself a bargain at the time.

The following year, the actor blew 276k on a rare dinosaur skull (allegedly outbidding Leo Di Caprio) only to have to return it in 2014 after discovering that it had been removed illegally from Mongolia.

Also on the list of extravagant purchases were properties in Malibu, Bel Air and Vegas totalling $36 million. All of these have since gone up for sale.

In 2009, Cage got into a legal wrangle with his business manager, claiming he “led him on a path to financial ruin.” The case was dismissed in 2010.

Mike Tyson – lived it up to the limit (and beyond)

He’s undoubtedly one of the greatest and most ferocious boxers of all time with 50 wins to his name and $685 million in career earnings. You might wonder then, how on earth Tyson ended up filing for bankruptcy. Like all good celebrity millionaires, the prized fighter went on a spending spree to rival any other.

Major purchases included a $500k Bentley International (not to mention Ferraris, Lamborghinis and a Rolls Royce) a 21-bed mansion with its own casino and nightclub and everyday outgoings such as $100,000 a month on clothes and $300,000 on gardening.

Oh, and a $2 million gold bathtub for his (first) wife.

Tyson has made somewhat of a comeback, however, opening a cannabis farm that bags up to $500,000 of weed sales a month and has had a brief fling with stardom in the Hangover I & II.

Here’s to not holding back.

Donald Trump – casino tycoon with some flops under his belt

The Donald has never officially declared bankruptcy. His businesses tell a different story, however, and make for some rather amusing celebrity financial fails.

He once owned a number of casinos in Atlantic City, such as Trump Plaza. It was one of the most successful with names like Mic Jagger and Barbara Streisand strutting their stuff until its downfall, following the opening of Trump Taj Mahal. The second premises cost $1.2 billion to build in 1990 and sold for just $50 million in 2017.

Lesser known ventures include Trump: The Game, which sold less than half of its predicted numbers before being discontinued, Trump Mortgage, which ran aground after being launched right before a housing slump and finally, Trump Steaks, despite being declared “The world’s greatest steaks” were only on sale for two months before being ditched.

MC Hammer – spent a fortune on the bling then had to sell it all

Despite having his heyday in the 80’s and 90’s, MC Hammer’s legacy lives on with immortal tracks such as ‘U Can’t Touch This’ (and celebrity financial fails that he’ll never live down). The rapper and dancer sold five albums over his career and at one point, was earning $33 million a year.

Capitalising on his new found fortune, Hammer thought it only right to spend $30 million on building a custom 12.5 acre house in Fremont, California. The luxury pad included two swimming pools, a nine-car garage and a recording suite and rehearsal studio not to mention lavish features such as Italian marble floors, fountains and gold-plated gates adorned with the words (you guessed it) “Hammer Time”.

Joining him on his journey to the top (and back down again) was an entourage of 200 staff costing $500,000 a month.

Oh yeah, and horses – 19 of them to be precise.

Hammer filed for bankruptcy in 1996 after racking up debts of nearly $14 million, forcing him to sell off his beloved home for a mere $5 million.

Eike Batista – gold mine boss turned convict

This Brazilian behemoth might not belong to the world of glitz and glamour but Batista’s financial fails make him a true star of the boom to bust tale.  His story began with a golden ‘leg-up’ from his father’s mining exploits.

From there, Batista formed EBX Group, a conglomerate of energy and mining companies that spanned across the world. By 2012, his net worth was an astronomical $35 billion, making him the wealthiest man in the country and the 8th richest on the planet.

The twist here is not your standard irresponsible spending, but the much overhyped performance of his chief moneymaker, OGX. The oil and gas exploration business didn’t quite produce the quantities of black gold that were anticipated. This lack of margin of safety, led to his downfall as investors to take their cheque books elsewhere at a time when the company was trying to pay off debts and secure new developments.

OGX was soon in the red to the tune of $5.1 billion. What might have sounded like a savvy business move, proved further fatal when Batista decided to shift his stock right before the company went bankrupt leading to charges of profiting from insider trading.

On top of this, he was found guilty of bribing the former mayor of Rio de Janeiro for government contracts, which landed him with an eye-watering 30 year prison sentence.

These stories just go to show that, even at the height of stardom and fortune, a few wrong moves (or a few too many mansions) are sometimes all it takes for things to head rapidly south.

 

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