Here’s a hypothetical situation. Let’s say you’re a single mother with two children to support. Let’s also say, for the sake of argument, that thanks to royalties and such you earn $737,000. That is $737,000 a month. Even if you’re a big spender, surely close to $9,000,000 a year, and the income generated from investments of that money, will allow for a solid future for yourself and your kids.
Not if you’re Britney Spears, according to court papers reviewed by CNN. The former pop princess doesn’t save or invest any of her income. Is she financially reckless? Or does she simply believe that this income will always be present?
Britney’s spending habits certainly paint a picture.
Spears’ monthly expenses include $49,267 in mortgage for two houses, $16,000 for clothes and $102,000 on entertainment, gifts and vacation, according to her financial declaration… Spears declares she spends about $4,758 per month dining out. Meanwhile, she spends zero on education, savings and investments and gives $500 a month in charitable contributions, the documents said. She has to pay her ex-husband $15,000 per month in child support and $20,000 in spousal support.
It seems to me, and it’s no surprise, Spears has income to spare. Think of the possibilities of a $9 million income, a good portion of which possibly guaranteed for the rest of one’s life, for someone who handles their finances with sanity. I dream of starting a foundation. I could do that and have a nice house and provide every conceivable opportunity for my theoretical future children for the amount of money this particular has-been wastes every month.
Thanks to Advanced Personal Finance for pointing out the article.
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9:17 am (reply)
Wow, I am having a hard time even wrapping my head around the idea of making $737,000 per year let alone per month.
I wonder if having that much excess income could alter even those with financial sanity to some degree. I like to think that I am financially responsible and feel that I am doing fairly well to support the efforts that are important to me on my current salary.
It would be interesting to see how other people earning millions per year spend their money. It is easy to be critical of Britney but what are some of these athletes doing with their $10-50 million per year?
9:38 am (reply)
I think its ridiculous that anyone making $700k a month would have a mortgage.
On that matter, $15k on child support and $20k on spousal support…per month, is just insane. Child support should be for supporting their basic needs – food, clothes, etc. Spousal support is ridiculous – the guy obviously has the ability to make money, but wastes it (gross income of 7k on a 500k income – you’ve got to be kidding!).
The lesson here? Entertainers are WAY overpaid.
9:58 am (reply)
Careful not to be too hasty with this judgment. Pop superstars (like sports superstars) are certainly overpaid by these standards, but the vast majority of talented entertainers are just normal folks making a living, some struggling to do so. Sensations like Britney Spears are rare (but they get the most amount of press, obviously).
12:13 pm (reply)
As far as the population of famous actors/musicians/athletes are concerned, I’m sure it is similar to the “normal” population in that some are savers and some are spenders. We’ll see how Britney is doing in 20-30 years.
On that note I’ve heard that LeBron James is a big fan of Warren Buffet and has a goal of becoming the first athlete billionaire via investing and saving.
http://www.moneycomplex.com/?p=74
12:50 pm (reply)
It almost makes me glad to be paid less since I’m actually engaged with my money. Who knows, maybe I’ll end up better off than she will (and I already have a much better quality of life—IMO).
12:54 pm (reply)
Nice post, although I must admit I wasn’t EVER expecting your site to have an article tagged “britney spears”.
While Ms. Spears is definitely to blame, I also blame financial advisers for not being able to land this whale! You could make a great pitch, make safe investments with her money, and take a $500k/year salary and she wouldn’t bat an eye. I don’t think anyone consciously thinks “I don’t need to save!” and if a qualified person could convince her it would take 0% of her time without greatly influencing her spending, I think you’d be golden.
12:57 pm (reply)
Colin beat me to the comment that I wanted to make. Lebron James claims his heroes are people like Warren Buffet. He’s really careful with his money. Proof that all celebrities aren’t as much of a reckless joke as Brittney Spears.
1:45 pm (reply)
I saw this article and I thought to myself, this is a great example of lifestyle inflation to the extreme. It goes to show that making money does not solve anything. Financial literacy, which leads to keeping and growing your money is what’s important. I wouldn’t say celebrities are overpaid as there is a reason they get paid so much and not everyone can do it. Look at some stars who go out and re-invest, start businesses and become moguls. The Olsen twins are an example of that. Granted it could just be the advisers around them who are building their wealth.
I think I heard that Lebron met with Warren Buffet and they had a meeting about growing his wealth. I guess at every level of income, there is a relative level of frugality and financial responsibility. I would even dare say that some stars who spend $1M a year are actually being frugal, compared to others who make the same amount of money.
Unfortunately Britney might end up in a situation like Michael Jackson, where the money is getting dry..
2:50 pm (reply)
Now, now Flexo. She isn’t a HAS-BEEN yet…otherwise she wouldn’t be pulling down $700K a month. Give her some time. But this is mind-boggling.
By the way, I am not sure if it is my browser settings, but I could not see the anti-spam word window, so I had to listen to the file. (update: now I see the word…weird.)
3:31 pm (reply)
What a moron. Ok, maybe thats harsh. My life certainly hasn’t been the model of financial responsibility. But wow, that is extreme. Hopefully this going public will be a wake up call. If she continues to handle her money the way that she handled her children it won’t be long before there’s nothing left at all. Its sad that our society idolizes someone with so little intelligence and integrity.
5:50 pm (reply)
Flexo,
Let’s not be too hasty here. I’ve been reading all over the blogosphere about this today and everyone seems to be jumping to very hasty conclusions. Now, I’m no fan of Ms. Spears, but basing our assumptions on here REAL savings based on court papers filed during a custody/divorce case seems a bit one-sided of everyone. Keep in mind that it behooves Ms. Spears to grossly underestimate here real net worth during those proceedings and to downplay any savings and investments she might have in order to reduce the amount she’d need to pay for childcare and “spousal support”. Plus, anyone earning the kind of money she does would by necessity have to retain the services of some smart accountants who would be able to prove that she “spends” a lot of money in order to write off as much as possible for taxes at the end of the year. Lastly, her monthly income is based on her current working income PLUS investment income. She is already worth over $100 million due to previous and ongoing investments, so if you believe she hasn’t already provided for her, and her children’s, futures you are most likely mistaken.
Granted, spending money like she does is asinine and without merit. The most glaring piece of information being that she only donates $500 a month to charity. But then again, if you had the kind of money she does and knew that you would most likely never need to work again for as long as you lived, why wouldn’t you enjoy spending some? Anyone want to guess what Bill Gates spends a month?
7:32 pm (reply)
Not that I’m a Britney Spears fan, per se, but I feel the need to defend her here.
First off, she does have a team of financial advisors that she mentioned in a recent interview.
Secondly, I’m sure they’re working overtime to hide her income and assets from her ex-husband.
Third, a huge portion of that income goes to taxes, her agents, her security, her attorneys, her stylist (who needs to be fired), her managers, her assistants, her maids, et. al.
Fourth, for better or worse, she has many streams of passive income that will likely be there long after she dies no matter WHAT she does. Sure, she could be a billionaire or incredible philanthropist if she tried, but she’s not exactly being financially reckless—emotionally and mentally and physically reckless perhaps, but her finances are pretty strong.
Fifth, she’s actually still working, and her new album is selling well. Plus she has a lot of untapped income opportunities.
Sixth, she’s really freaking young! She’ll probably wake up one day and quit spending quite so much money, start investing, start giving it to charity—if nothing else out of boredom.
9:03 pm (reply)
Meg & GeekMan: I hope for Britney’s sake, you guys are right. I suppose the intent in her papers is to show as little wealth as possible to reduce her required payments to her ex-husband. It’s hard to know what really goes on—as spectators we only see what the media show us. It doesn’t look like her kids are being put in a position where they will be well cared and set for the rest of their lives without any need unprovided, but who really knows.
9:51 pm (reply)
I think the people coming down so hard on her need to ask themselves: how financially responsible were YOU when you were 25 years old?
2:06 pm (reply)
I’m going to with Meg here. Brit’s not investing wisely, but both she and her boys will be receiving royalites for the next hundred years. Even if all her other income dried up, this would support her handsomely.
It’s the same reason Michael Jackson will never go broke, despite reports of his overspending. Besides the rights to his own music, Jacko owns the entire Beatles catalog. (He outbid McCartney for it in 1984.) He will never, ever live poorly, since he’ll always collect residuals.
Still, Brit could be contributing a bit more. To charity and society as a whole, I mean.
6:19 am (reply)
2:49 pm (reply)
um….does anyone own a calculator? bc though she may not list savings on the form…her expenses that are listed only add up to $312 a month…so though she isn’t “investing” she does have a suplus of like $450K a month…
3:22 pm (reply)
sliput: the point we’re trying to make is that Brit is not using her income “wisely,” at least according to the court papers. Is she spending less than she’s earning? Maybe… Does she need to use her money “wisely?” No, she has a lot of room to wiggle. Could she give her kids better opportunities and really take care of them if she chooses to? Yes. Could she give back more to the world that has given her so much, whether deserved or not? Yes.
3:01 pm (reply)
While this spending is totally insane, there is one aspect that I want to mention.
Do I think the amount of money that “pop” superstars make is outrageous? Yes…
BUT, it is not “excessive.” Why? Because we live in a free-market economy. Athletes and stars like Spears and movie stars make that much money because they CAN.
I’m not saying I agree with it, but that’s a part of our economy. Our focus should be on her—and our—spending if we are broke all the time.
I may never make $700K/month, but I have the POTENTIAL to make whatever I can in our society.
11:40 pm (reply)
Be careful what you wish for- cause you just might get it all, and then some you didn’t want.