Famous artists and athletes have made their dreams come true and achieved a level of financial wealth most people dream of. But why is it that a lot of them end up broke or in debt? There are three major reasons involving the psychology of money and the individual.
Major Reasons
They come from an environment that is not financially literate
Their habits
Short term thinking
you are the average of the five people you associate with the most.
With that being said most of the famous artists and athletes come from very poor households. With this poor economic background any amount of money won't be able to change the psychology behind the way you view it. Money is just an enhancer of ones personal self. If you have a poor mind and spend money every time you make it it only increases the scale when you become a world renown artist and make millions of dollars.
This psychology that is engrained in the persons mind is correlated with the habits that are formed around spending. Spending and investing are simply habits. It depends on which habit that person choses. Investing is a discipline much like working out or eating healthy and spending is much like instant gratification buying a new TV or jewelry . One is more beneficial although the results aren't present at first. The second makes you feel good right now and maybe a couple weeks to a month after but it is not in your best interest for the long run.
Lastly the reason why many famous artists we love end up broke is their thinking around time. A big fault with this is that they think they will be rich, famous, and relevant forever. There are cases where a band or artists music is played for their whole life, just look at The Beatles, Rolling Stones, Bruce Springsteen, and hopefully Drake! Even in these cases people manage to lose it all because of their short term thinking with their finances and would rather buy things that do not produce a return on their investment.
In conclusion
People who end up becoming financially free spend their money on assets (things that produce more money). Examples of these are stocks, bonds, rental properties, franchises (Dunkin Donuts, Dairy Queen, etc), and other business ventures. The list is a mile long of ways you can put your money to work for you and we will cover this in another post.
If the celebrities and artists that end up losing it all had the right environment, the right habits, and the proper mindset they would be in a financially free place right now. Use this information to learn from their mistakes and to apply it to your situation one step at a time!
Check out T-Pain's story of how he lost tens of millions of dollars through poor habits and investments from a bad environment of people.