Painfully True Stories of Rich People Who Went Bust
When you’re living on a budget, it can be easy to view those with millions (or even billions) as having it easy. However, as these 14 riches to rags stories prove, it’s just as easy to go broke with 10 million in the bank as it is with only 10 dollars.
Moral of the story: Learn to live within your means, no matter how big or how small, and don’t forget to pay your taxes.
The original “poor little rich girl,” Barbara Hutton was the heiress to the massive Woolworth fortune, making her one of the richest people in the world. Proof that money really can’t buy happiness, Hutton struggled throughout her life with an eating disorder, addiction, and abusive relationships.
Her lavish lifestyle — she was famous for throwing “the party of the social season” at her compound in Tangier, Morocco — and terrible taste in romantic partners, contributed to her eventual financial troubles. Hutton married and divorced seven times, and only her marriage to actor Cary Grant did not result in Hutton providing a financial settlement.
At the time of her death, she was living in a suite at The Beverly Hills Hotel and is said to have had just a few thousand dollars to her name.
Sammy Davis, Jr.
His glory days with The Rat Pack brought him fame and fortune, but Davis’s high-flying lifestyle left him with little more than a massive tax bill. Davis is said to have made in the neighborhood of $50 million over the course of his lifetime, but when he died he owed the IRS millions in unpaid taxes.
Eventually his collection of personal memorabilia was auctioned off, with all of the proceeds put towards the massive tax debt that his wife inherited upon his death.
An author and playwright, Oscar Wilde was a famous man-about-town who lived extravagantly and died penniless. Wilde’s penchant for design and fashion were well-known, and he traveled to the United States on a lecture tour about his theory of aesthetics, for which he was paid handsomely.
When Wilde was accused of being a homosexual, he sued his accuser for libel, but ended up simply landing himself in prison for the crime of “gross indecency.” Wilde lost his home and possessions upon his imprisonment, and he spent his final years in Paris living in a seedy hotel, where he died in debt.
One of the top-selling rap albums of all time, “Please Hammer, Don’t Hurt ‘Em” brought musician MC Hammer unimaginable wealth. At the top of his fame, Hammer, aka Stanley Kirk Burrell, was estimated to be worth $33 million, but when his music career failed to produce another hit album, he was forced to file for bankruptcy.
Hammer’s lavish spending habits, including multiple expensive cars and a $30 million mansion, contributed to his financial downfall.
The former Philadelphia 76ers point guard made more than 150 million dollars during his time as a star basketball player. That mind-blowing figure was just his salary and doesn’t include his endorsement deals, including an $800,000 per-year endorsement with Reebok.
After his NBA career ended, Iverson continued to live as though another multi-million dollar contract was just around the corner, at one point spending over $23,000 in a single day. Troubles with alcohol combined with his tendency to give money to family and friends plus a taste for expensive jewelry, have left Iverson with a foreclosed-on house and garnished wages.
The disgraced founder of biotech company Theranos, Elizabeth Holmes was lauded as the youngest self-made female billionaire. At the height of her success, Holmes’s personal net worth hovered around $4.5 billion, while her status as a college dropout turned financial wunderkind brought her notoriety.
Following an investigation by the FDA and an exposé about Theranos’ testing inaccuracies, the company foundered and eventually went under. Holmes has since been indicted for wire fraud and could face a long prison sentence.
Ed McMahon spent 30 years working alongside Johnny Carson on “The Tonight Show.” Famous for his “Heeeeere’s Johnny!” opener, McMahon is said to have made a handsome salary for being Carson’s straight man, and his additional acting, writing, and paid spokesperson roles added to McMahon’s earnings.
A propensity for generosity, big spending, and bad business decisions left McMahon in debt for over one million dollars. At the time of his death, he was being sued for several debts and his Beverly Hills mansion was in foreclosure.
He may have been dubbed the King of Pop, but Michael Jackson was also the king of debt. Despite a $65 million recording deal with Sony, at the time of his death Jackson’s personal debts ranged between $400-500 million.
Jackson’s shrewd purchase of a music catalogue that contained the copyrights to some of the most well-known songs in history (The Beatles, anyone?) helped keep him afloat, but his purchase of Neverland Ranch for $14.5 million, coupled with his legal troubles, led Jackson deeper into debt. Jackson borrowed large sums of money and is said to have spent $20-30 million more than he earned per year.
While he may have died a debtor, Jackson also turns out to be far more successful posthumously; his estate made enough to pay off his personal debts by the end of 2012.
The former heavyweight champion had an illustrious career for which he was paid handsomely: almost $400 million dollars over the course of 20 years. Despite earning $30 million for one night’s work, Mike Tyson was forced to declare bankruptcy for being $23 million in debt. According to the documents filed in his bankruptcy proceedings, Tyson spent $400,000 per month to maintain his lifestyle.
To be fair, Tyson’s “lifestyle” was not ordinary by any stretch of the imagination: He kept a menagerie of exotic tigers as pets and a stable of limousines for transportation. Three years in prison for a rape conviction and a stint in rehab for drug addiction took their toll as well.
These days Tyson no longer commands staggering amounts of money for one night of work, but his cameo in “The Hangover” has led to a steady and (hopefully) drama-free acting and writing career.
One of the highest paid actors of all time, Nicolas Cage is said to have made $40 million dollars in one year alone. In 2009 the IRS put a $6.2 million dollar lien on Cage for unpaid taxes.
Cage blamed his money manager for his financial problems, but his wild spending habits were certainly part of the issue. At one point, Cage owned multiple residences (including two castles), a private island in The Bahamas, a dinosaur skull plus various exotic pets and expensive cars. Cage sued his former business manager (who then counter sued), sold most of his real estate holdings and some memorabilia, and is now working to pay down his astronomical tax bill.
It looks as though Annie Leibovitz, famous for photographing celebrities (most notably for Vanity Fair) was living the lifestyle of a celebrity herself. With a reported day rate of $250,000 and a $5 million per annum lifetime contract with Condé Nast, Leibovitz’s income should have been enough to provide a comfortable living.
Her multiple Manhattan real estate mortgages combined with lavish spending — she flew in Rosanne Cash and kiddy-singer Dan Zanes to perform at her daughter’s first birthday party — led Leibovitz to borrow $24 million using her lifetime of photographs as collateral.
Leibovitz takes some responsibility for bad financial decisions though she, too, claims to have been misled by unscrupulous business managers. She came close to being forced to declare bankruptcy, but Leibovitz worked out deals with her creditors, and has since sold some of her Manhattan property.
Even Founding Father Thomas Jefferson wasn’t free from the burdens of debt. While it wasn’t unusual for plantation owners to carry debts from year-to-year, Jefferson’s was so immense that his family was forced to sell most of his property after his death.
According to records, Jefferson owed $107,000 (about $2 million today). Not surprisingly, Jefferson lived well beyond his means, spending lavishly on his various engineering projects as well as bottles of wine that he had shipped over from Europe.
NBA champion and three-time all-star Antoine Walker received a $108 million dollar contract. Just two years after he played his final game for the Boston Celtics, Walker was broke and forced to file for Chapter 7 bankruptcy.
Walker lived the high life while also providing a lavish lifestyle for friends, family, and hangers-on. He is said to have owned more cars than he could count, and he refused to wear a suit more than once. His real estate investments were hard hit by the recession and a gambling habit also cleared out his coffers.
The good news: Walker is using his own experience as a cautionary tale, and he now travels the U.S. educating future sports stars about how to spend (and save) wisely.
Judy Garland’s acting career spanned decades, but when the singer and movie star passed away she was reportedly millions of dollars in debt.
Garland began acting at age two, and made a name for herself in movie musicals, including iconic film “The Wizard of Oz.” Garland struggled with addiction throughout her life and the cost of her escalating dependence on pills as well as living the glamorous (and expensive) Hollywood lifestyle ultimately took its toll.
By the end of her life, Garland’s daughter, Liza Minnelli, was helping support her, and it’s rumored that Frank Sinatra paid for her funeral. Garland seems to have been in denial about her financial situation until the very end: In her will she made generous bequests that were unable to be fulfilled due to her mounting debts.