You're a celebrity, how do you manage money?

[RottyB5A2]

So you're a major celebrity, say Madonna, how do you manage your money? Of course you have a team of accountants but how do you know what you have?

The majority of us know what we have in terms of assets and liabilities, how much we have liquid and where investments are. When you own 5+ mansions, have a staff of housekeepers, gardeners, chefs, etc., how do you keep track of it?

And how do you trust your accountant(s)?

[medicracer]

Poorly.

[ChrisMD]

Quote, originally posted by RottyB5A2 »

And how do you trust your accountant(s)?

That's the most important question you asked. A lot of celebrities are taken advantage of by their money people.

[tjl]

Quote, originally posted by RottyB5A2 »

So you're a major celebrity, say Madonna, how do you manage your money? Of course you have a team of accountants but how do you know what you have? The majority of us know what we have in terms of assets and liabilities, how much we have liquid and where investments are. When you own 5+ mansions, have a staff of housekeepers, gardeners, chefs, etc., how do you keep track of it?

Some celebrities live a relatively simple life. E.g. a nice house in Omaha, Nebraska (for the past 50 years) and a Cadillac.

And they manage their money themselves (though they (or their companies) need to hire accountants, of course).

Modified by tjl at 6:43 PM 1-12-2010

[SteveMKIIDub]

Quote, originally posted by tjl »

Some celebrities live a relatively simple life.

Ok you found one..

[Oliver@triplezoom]

Mr. Buffett isn't a celebrity in the traditional sense though.

[SteveMKIIDub]

Quote, originally posted by Oliver@triplezoom »

Mr. Buffett isn't a celebrity in the traditional sense though.

Agreed. I don't expect most celebrities to have the sheer experience with finance that he does. He was scheming ways to make money when he was a kid no matter what it was. Paperboy, fetching golf balls and everything in between. Clever man.

[VdubChaos]

I don't get how ANYONE pays ANYONE to manage THEIR money.

I can understand company, but personal?

[SteveMKIIDub]

Quote, originally posted by VdubChaos »

I don't get how ANYONE pays ANYONE to manage THEIR money. I can understand company, but personal?

I don't understand how celebrities do half the **** they do so for them to hire someone to manage their finances, well, its not as crazy as it sounds!

[Tornado2dr]

Quote, originally posted by VdubChaos »

I don't get how ANYONE pays ANYONE to manage THEIR money. I can understand company, but personal?

In my eyes, there gets to be a point where you have so much income that managing it yourself would become a full-time job in and of itself so that hiring someone to take care of it for you (under your terms and conditions) makes the best financial sense.

Streams of income coming from investments, sales, various companies and LLCs, property management firms would get to be quite overwhelming for one person to direct to various funds for safe-keeping, trusts for children, living expenses, etc.

The owner of my company dips into all manner of investing, rental property (large) ownership, and god knows what else. If he had to sit in front of a computer all day managing the different sources of income and directing it properly(assuming he could properly use a computer and the internet), how would he be able to be on the phone and road all day, making the next deal?

Even if a celeb (of any nature- sports, movies, tv, etc) was smart enough to do this themselves, why would they want to? They could be out enjoying life or making the next deal for themselves.

[kptaylor]

I'd much rather be a Madonna than an LT. Athletes are extremely short-sighted in understanding the gravy train for them will end with their careers, while entertainers can usually count on a longer career and residuals.

If I was pulling in several hundred million a year, you'd better believe I'd hire a manager and an accountant. Like any other hires, you get references, make sure they're bonded/insured, etc.

[ImRollin]

One client of mine is a famous movie director. He lives a rather simple life compared to others that I have seen. When he is working there are times when he may be in another country for weeks at a time. He just doesn't have the time to manage it all nor the know how.

For the most part he has a house in LA and NY (very little debt against) 2 simple cars, sizable amount of securities and cash.

Another person won some $50 million in the lottery. Most of you think you could manage all that kind of money but you are fooling yourselves

[robr2]

I would presume that any smart celeb/athlete/musician/trust fund baby would be smart enough to hire managers, accountants and financial advisors who act as a check and balance on each other.

[a_riot]

Quote, originally posted by SteveMKIIDub »

Agreed. I don't expect most celebrities to have the sheer experience with finance that he does. He was scheming ways to make money when he was a kid no matter what it was. Paperboy, fetching golf balls and everything in between. Clever man.

Unfortunately there is no way to tell the difference between a clever investor and a lucky investor.

[SteveMKIIDub]

Quote, originally posted by a_riot »

Unfortunately there is no way to tell the difference between a clever investor and a lucky investor.

So Buffets success was luck?

[SAPJetta]

Quote, originally posted by RottyB5A2 »

So you're a major celebrity, say Madonna, how do you manage your money?

I'd follow the celebrity trend...... I wouldn't. I'd pay some big shot shady guy to do it for me, spend more than I should and then sue the big shot shady guy for ripping me off while I paid no attention to my bottom line. Seems like the celeb thing to do.

Fortunately, I'm not a major celebrity.

[a_riot]

Quote, originally posted by SteveMKIIDub »

So Buffets success was luck?

Like I said, its impossible to say. Buffett has so much money to invest he makes markets. He also got severely clobbered in 2008, just like most everyone else.

[jnm2.0t]

...thinking of all the gold i could buy as a celebrity...

[SAPJetta]

Be sure to buy it using a credit card.

[jnm2.0t]

is there any other way to?

[SteveMKIIDub]

Quote, originally posted by a_riot »

Like I said, its impossible to say. Buffett has so much money to invest he makes markets. He also got severely clobbered in 2008, just like most everyone else.

But Buffet never started that way. He first started getting money by the examples I posted and many more. It took him plenty of time and hard work to get where he is. For him to be there I most certainly do not think luck has any part of.

FWIW

[tjl]

Quote, originally posted by VdubChaos »

I don't get how ANYONE pays ANYONE to manage THEIR money.

Anyone who buys any mutual fund is paying someone else to manage some of his/her money.

Of course, someone who is super-rich may be able to buy into lower cost "institutional"-class shares of mutual funds.


Modified by tjl at 12:39 PM 1-13-2010

[BetterByDesign]

You'd be surprised how many celebrities are cheap; and cheap people usually not only know how many homes they have, but how much change they have in their pockets.

Tiger Woods was notoriously known as a cheap guy, but I was surprised he extended that attitude to women; considering all he had at stake.

I am also sure celebrities have more time than the rest of us to find the right people in the right circles to manage everything: from finance to weight loss if they wanted to.

Its not like they're stuck on the freeway or grinding it out at the office.

[x1000rpms]

Quote, originally posted by SteveMKIIDub »

But Buffet never started that way. He first started getting money by the examples I posted and many more. It took him plenty of time and hard work to get where he is. For him to be there I most certainly do not think luck has any part of. FWIW

Buffet made a lot of his money starting out by investing in himself and his company... I would say he's made a majority of his money investing in himself (his companies)

It doesn't hurt that after he made a ton of money investing in himself - the 80s and 90s happen and any value investor would have made BOAT LOADS of money.

He's a smart guy and he's earned it. I don't want to take anything away from him - but everything we do is luck when you consider that we were lucky enough not to get hit by a bus this morning.

[Mr. Tickles]

Quote, originally posted by x1000rpms »

He's a smart guy and he's earned it. I don't want to take anything away from him - but everything we do is luck when you consider that we were lucky enough not to get hit by a bus this morning.

You may consider that luck, but I consider that being smart enough to watch out for buses.

If I had a million dollars I'd probably get two chicks at one time.

But since I'm a celebrity in this thread I could probably find skanks on a regular basis to double up on a dude like me... maybe I'd buy a block of gold to stare at and pet. After that, I think it'd be cool to burn a whole lot of money on a funeral pyre.

So I guess I wouldn't manage it at all, at least not in any useful way.

[SAPJetta]

Quote, originally posted by Mr. Tickles »

You may consider that luck, but I consider that being smart enough to watch out for buses. If I had a million dollars I'd probably get two chicks at one time. But since I'm a celebrity in this thread I could probably find skanks on a regular basis to double up on a dude like me... maybe I'd buy a block of gold to stare at and pet. After that, I think it'd be cool to burn a whole lot of money on a funeral pyre. So I guess I wouldn't manage it at all, at least not in any useful way.

Quality post here

[dunhamjr]

Would have to hire people.
Hire smart, referenced, known people.

Then no matter the pain it might be, I would be sure to remain informed about what I had and where. I would want to keep track of how well everything is doing... so that maybe it would be a little bit easier to spot the inevitable stealing before too much damage is done to assets and reputation.

[tjl]

Quote, originally posted by dunhamjr »

Would have to hire people. Hire smart, referenced, known people. Then no matter the pain it might be, I would be sure to remain informed about what I had and where. I would want to keep track of how well everything is doing... so that maybe it would be a little bit easier to spot the inevitable stealing before too much damage is done to assets and reputation.

But does it have to be terribly complicated? Publically available mutual funds, or companies like Berkshire Hathaway, are effectively ways to hire money managers with required amounts of disclosure about investment policies, history, etc.

[SteveMKIIDub]

Ugh, lets just end this thread once and for all. If your a celebrity...

...you just hire ChrisMD!

Done.

[SAPJetta]

Get a beige card.

[FlashRedGLS1.8T]

I'd take all of my financial advice from Nicholas Cage.

[SAPJetta]

[dunhamjr]

Quote, originally posted by tjl »

But does it have to be terribly complicated? Publically available mutual funds, or companies like Berkshire Hathaway, are effectively ways to hire money managers with required amounts of disclosure about investment policies, history, etc.

No its does not have to be complicated.
But the complication doesn't necessarily come from the Investment side of things either...

You have to think about all the other stuff as well. Making sure assistants/staff get paid, housing/family expenses get paid, CC bills get paid... and all the various streams of income end up getting properly collected and routed into your various checking, savings, investment accounts.

[titleist1976]

Quote, originally posted by SAPJetta »

Get a beige card.

Exactly. You put every bill (mortgages, salaries, Starbucks, everything) on your beige card and only have one payment per month. Done.

I'd have a few institutional funds, private placements, bdc's, pretty much everything to diversify. Oh, even some gold.

[tjl]

Quote, originally posted by dunhamjr »

No its does not have to be complicated. But the complication doesn't necessarily come from the Investment side of things either... You have to think about all the other stuff as well. Making sure assistants/staff get paid, housing/family expenses get paid, CC bills get paid... and all the various streams of income end up getting properly collected and routed into your various checking, savings, investment accounts.

Housing, family, credit cards are all normal bills that regular people deal with, so unless one has numerous additional houses, or things like private yachts and private airplanes or fleets of cars, that should not be much additional complication (indeed, the super rich could pay cash for houses, cars, and the like, so there is no complication with remembering to pay the loan each month). As far as income goes, it depends on how many different sources and how variable it is (though ordinary people who do contract or consulting work likely have similar situations with respect to multiple income sources).

Of course, the personal finance stuff described above is not the same as managing the business of generating the income, which could be more complicated.