
I Stop Celebrities from Blowing Their Money - wallflower
https://www.thecut.com/2018/06/how-do-celebrities-spend-their-money.html
======
smadge
“One thing that’s surprisingly inexpensive for a lot of our clients is health
insurance. The insurance policy for members of SAG-AFTRA is amazing. For the
money, it is the best health insurance out there. It’s only about $400 per
quarter for an individual, so you’re looking at about $1,200 or $1,500 a year
for the best PPO coverage in the country. It travels with you everywhere, and
you have access to emergency care facilities and 24/7 mental-health care. It’s
great. I wish I could get it.”

For me, this is the most surprising quote from the article. It really shows
how us Plebians are ground into dust by the healthcare industry.

~~~
weeksie
I can assure you that the majority of SAG actors are working service jobs,
living hand to mouth. This isn't an example of the rich lording over the
plebs, this is an example of a union doing right by its members.

~~~
knuththetruth
Yeah. All tech workers could have similar benefits if they unionized en masse
using a structure similar to that of actors.

~~~
dizzystar
Getting into and maintaining SAG membership is very time consuming and
expensive.

You could work in the industry for years and never get in. Others get lucky
and get in within a few months. A lot of people are SAG Eligible but can't
afford the initial fees to get in.

It's not like a standard union where you show up to work every day for months
and you are in. Non-union basically do the exact same thing as union folk, but
get paid less per hour. In contrast, there is a budget limit to how many SAG
workers can be on set, so while your hourly is higher, the quantity of work
you have is much lower.

Most SAG members are background extras, who don't earn very much money, and
can't work more if they wanted to.

Definitely not the union you'd want to emulate. Film and TV actors are all
temporary workers.

~~~
knuththetruth
Well, the good thing about unions, is they're democratically organized. So,
tech workers should look at what works in SAG (performance based pay
w/reasonable floors, great benefits), emulate that, and set aside the
problems/barriers you describe.

------
hyperpape
I can't find the story, but several years ago, an NBA player bought a bunch of
fast food franchises, and there was collective head-scratching about why he'd
do that. Matthew Yglesias pointed out that it was brilliant: the value of the
franchises was that they were illiquid, so that he had a backstop against
overspending or family members asking for money.

About that last point: for those of us who come from middle class backgrounds,
it's easy to think "just be reasonable about what you give people". It's a
much harder proposition if your entire family has been struggling your entire
life--especially if they made sacrifices for your dream (I think John Wall's
mom once let the lights get cut off to pay for something basketball related
for him).

~~~
dalbasal
On that last point... an analogy When the microfinance exuberance started
dying back about 5 years ago, I heard the following interpretation of micro-
credit:

 _Poor rural people need credit because they can 't save. They can't save
because they owe their neighbours a moral debt._

Jennifer really needs $50 to pay her kid's dentist bill. She looked after your
grandmother, when she was sick and you were away. You owe her (and love her,
you're friends).

If you have $50 saved, you will get requests that cannot be refused. Everyone
is broke and everyone owes eachother favours. Debt is the only way of getting
a lump sum. The critic concluded that saving with a (big) negative interest
rate is a bitter pill, but better than nothing.

Fast food franchises sound like a great idea, if they aren't too failure
prone. You lock up illiquid assets. You can give family members jobs, if
necessary/appropriate. The bad idea side effects of this is that businesses
can potentially lose money as well as value.

The spanner in any such system will always be debt. You can lock up all your
assets but if you have assets to your name, you can get credit and spend those
assets regardless.

~~~
hyperpape
This is a great point, and it also fits with how a lot of "tribal" societies
work/worked. You never accumulate wealth, but, for instance, if you have a
large yam harvest, you throw a feast for the entire community.

------
holman
If any of this is at all interesting to you, I'd recommend checking out the
very excellent ESPN documentary "Broke":
[http://www.espn.com/30for30/film?page=broke](http://www.espn.com/30for30/film?page=broke)

ESPN's 30 for 30 docs are really great, even if you're not particularly huge
into sports. Broke is one of my favorites (after a "The Two Escobars"). It
goes into a lot of detail about how ill-prepared many professional athletes
are for the lifestyle, how they overestimate their net worth and their
projected career duration, and digs into all of the different pitfalls new
signees might face as they enter sport. It's easy to blow it off and say
"whatever, they're all soft, tattooed millionaires anyway", but there's a lot
of heartbreaking instances where people did the right thing and still ended up
bankrupt.

Anyway, worth a viewing.

~~~
acchow
Can you give some examples of "did the right thing and still ended up
bankrupt."?

~~~
TwiztidK
So, doing the "right thing" might not be the way to phrase it, but there are
many athletes who lived within their means themselves and were taken advantage
of by people they trusted. A recent example of the is Jack Johnson [1], whose
parent's spent all of his money and left him $10M in debt.

[1]: [https://deadspin.com/how-jack-johnsons-parents-screwed-
him-a...](https://deadspin.com/how-jack-johnsons-parents-screwed-him-and-left-
him-mill-1663583325)

~~~
iamatworknow
Tim Duncan's another example: [https://www.reuters.com/article/us-nba-duncan-
adviser/financ...](https://www.reuters.com/article/us-nba-duncan-
adviser/financial-adviser-sentenced-to-four-years-for-bilking-nbas-tim-duncan-
idUSKBN19J2PZ)

~~~
meestaahjoshee
he got screwed over but he's far from bankrupt.

~~~
iamatworknow
Fair, I somehow missed that word my first time reading the comment, but he's
an example of someone who "did the right thing" and still got "punished".

------
godot
Thought this bit was interesting: "... actors, recording artists, producers,
writers, and athletes with personal net worths ranging from $1 million to $50
million..."

I kind of feel bad for the low end of her clients whose net worth is only $1
million. Don't get me wrong, it's a lot of money. But it also doesn't go that
far nowadays, especially if you live in SF Bay area (though most of her
clients are probably in the LA area; slightly better but not by much). You
can't even afford a decent house with cash for that amount of money. I feel
bad for the client who has $1m but thinks he/she has a lot of money, and needs
to pay a financial adviser (5% even!) to manage it for him/her. In this day
and age and in California, if you have $1m, you'd better be working hard still
and save up for retirement.

~~~
charmides
I would guess that those clients are young and with high income, so their net
worth may not be that meaningful yet. Otherwise, they would be well-advised to
fire their financial manager, take their million dollars and live somewhere
less expensive.

~~~
rurban
That does not work, because you are out of work then. Nobody will meet you or
call you out of the blue.

~~~
charmides
That depends on your age and what you do for a living.

~~~
caseysoftware
Since they're "actors, recording artists, producers, writers, and athletes"
they're often in LA, NYC, and a handful of other places that are expensive to
live. They usually have to be near their projects, sets, studio, or team for a
significant part of the year.

We're not talking about remote software developers or launching a new startup
here.

~~~
charmides
I don't disagree, but you are having a conversation about something completely
different. This was my comment:

>I would guess that those clients are young and with high income, so their net
worth may not be that meaningful yet. Otherwise, they would be well-advised to
fire their financial manager, take their million dollars and live somewhere
less expensive.

When I say "otherwise," that means that you are either old or on a low salary.
Let's spell that out:

i) If you are young, on a low salary, but own a million dollars, you would be
well-advised to change careers and move somewhere else, otherwise that million
dollars won't last long, especially with an expensive financial manager.

ii) If you are old and own a million dollars, you may as well consider
retirement.

Thanks for your comment anyway, but since I don't feel super invested in this
argument, I'm going to end my participation here.

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iamtew
The cookie wall won't let me continue without agreeing to cookies. I can
reject them in the Cookie Policy, but that too is protected behind the cookie
wall.

Obviously, this doesn't comply with the GDPR, and makes the site unreadable
for some.

~~~
jgtrosh
These wall designs are really surprising; I would expect bad designs to come
from difficulty of implementing data collection management, not the wall UX.
Just imagine you're a user seeing this, do you not feel antagonized?

~~~
zeta0134
Since the data collection management would traditionally be stored as a
cookie... It's a bit of a chicken and egg problem. Without tracking, how do
you track that consent was revoked?

The cookie law bugs me because it's feels like it's being applied in
completely the wrong place. Isn't the browser perfectly capable of restricting
third party cookies and presenting the necessary legal warnings?

~~~
Fradow
The cookie law has exemptions for cookies that are there for technical
reasons. For example, your locale, and which cookies you agreed to.

The browser cannot differentiate first party cookies that are technical or for
tracking.

~~~
Cthulhu_
^ this; people for some reason still assume all cookies are banned. If that
was so, it'd be a feature removed from browsers already.

------
elgenie
The US does a terrible job of inculcating basic financial literacy in the
populace.

The only way that paying someone 5% of assets / income just to avoid ruination
can be a sound investment is if the person is utterly clueless about how money
in general, and compound interest in particular, works.

~~~
Retric
Depends on how much work these people put in. If they are going over every
contract including insurance etc it would be an extremely valuable service.

On to of that they are sorting all their mail, doing bill payments etc. 'I was
at his house every single day, helping to oversee contractors, pick out
windows, pick out drapes.'

~~~
walshemj
I think she also meant but didn't say stopped contractors ripping her client
off.

Charging for Italian Marble but actually using crap materials or billing for
more days worked than they did would be a couple of good examples.

~~~
saalweachter
Which might also indicate that good politics are a part of her job as well.

You don't want to tell the contractors who _aren 't_ trying to rip you off "I
need to stand here and stare at you so that you don't cheat me/steal
anything", but if you're always around to help "pick out windows" or "choose
drapes", you can keep an eye on things without being too obvious about it.

------
wrich5011
FIVE PERCENT FEES? After inflation that basically brings your ROI from holding
risky equities down to savings account rates.

She gets paid better than the world’s most successful hedge funds to be a
glorified baby sitter to grownups?

I picked the wrong career.

~~~
2muchcoffeeman
Seems reasonable considering the amount of babysitting they do.

Managing assets and making sure certain bills get paid on time seems
reasonable. But having to talk them out of impulse buys they may not be able
to afford sounds terrible.

It’s like these stars are not fully functioning human beings.

~~~
JumpCrisscross
> _It’s like these stars are not fully functioning human beings_

Or that the personalities that (a) go into low-probability high-payoff careers
like entertainment and (b) do well in entertainment (through further selection
or the perso al transformations necessary to succeed in Hollywood or the NFL)
are also bad at saying no to competitive luxuries and short-term impulses.

~~~
jpindar
And many of them work with people who make even more money than they do, which
can distort their idea of what lifestyle they can afford.

~~~
cpitman
I see this very much. Friends that are surrounded by dual income couples that
are lawyers/doctors/etc get convinced that 300k+ household incomes are "not
that much". This while being 97+% percentile for household incomes in the US.

------
zer00eyz
A long time ago, in a job (thankfully) far far away I had to have a fair bit
of interaction with famous people.

Some of them are crazy - one of the artists (now dead) demanded "more goat
heads" on his project. This was an actual client request.

I still do take pride in getting one of the most difficult clients in the
roster to admit we did a "good job".

Famous people can be weird, and some do really exist in their own special
bubble.

~~~
elgenie
Wealth/power/fame don't change who people are, they just allow them to express
it unconstrained.

For fame and fortune as an artist, though, the chances of "making it" are so
remote that the proportion of sober and rational people who choose to take the
first steps down that path has to be rather low, and that of the ones that
just keep going down the path even lower.

------
Zaheer
Mildly interesting article but mostly reads like an advertisement. Great
content marketing piece though!

~~~
bredren
Yes, the tone is well done. Sort of a “let me give this to you straight”
message. Sort of subtweety in referencing real clients.

------
Animats
A lot of people who are making $300K a year in Silicon Valley are going to be
in that situation around age 50.

~~~
ainiriand
That can be accurate, but keep in mind that the people ins Silicon Valley are
there using the brain and therefore more aware of the financials of their
lives. Artists and sportists on the other hand can be a bit more detached from
how much they make. I am not saying that this happens in 100% of the cases but
there is a correlation.

~~~
sh4z
I kind of agree with your sentiment but you make it sound a bit like artists
don't use their brain, or are outright stupid - which I don't think you meant
and I don't think is true.

~~~
jerf
There's going to be a lot of difference in practice between accumulating a lot
of money over the course of decades until you're in a pretty good place in
your 50s, and having all of that dumped on you in one fell swoop when you're
19.

Among the things that a SV engineer who manages that has to think about is if
they have children, what happens when they die. It's nice to pass some things
on to your children, but at the same time, plopping a million dollars in
assets down on your kid all at once may not be doing them favors. Best to look
at your options. (I'm not going into it here just because it's really more
than fits into an HN message, nor should you take the advice from me; I'm
aware that there are options.)

------
myroon5
"I charge a 5 percent commission rate, which is pretty standard"

5 percent of what?

~~~
nixgeek
I presume it’s their income, or assets under management. Pretty sweet deal if
so compared to the 2-and-20 a lot of investment managers make.

~~~
wrich5011
2 and 20 is what premier hedge funds make (many charge less nowadays). 1% is a
standard financial advisor fee.

~~~
JumpCrisscross
> _2 and 20 is what premier hedge funds make (many charge less nowadays). 1%
> is a standard financial advisor fee._

Hedge fund managers and financial advisors meet with their LPs/clients from
time to time. They don’t “get all of [their] clients’ mail — bills, fan mail,
business-related mail, everything” nor “oversee payments for their mortgages,
phone, rent, utilities, and all the little things that keep their lives going
and the lights on.”

------
omarchowdhury
The actor that "died suddenly" sounds like it might have been Anton Yelchin.

~~~
catsmat837
"I felt like I had failed him, or could have done more." \-- This sounds like
the actor died as a result of a wrong choice, not from a freak car accident.

~~~
omarchowdhury
Maybe she feels like she could have researched a better car for him? The
parents did sue the car manufacturer after all. Just speculating.

------
amelius
I wish there was a service like this for people with an average income.

There are lots of artists out there who are in this category, and who could
use such a service. Also, the typical "mad scientist" probably doesn't care
much for personal finance, so they could benefit as well. And lots of other
people.

~~~
JumpCrisscross
> _I wish there was a service like this for people with an average income_

I pay my accountant roughly $1,000 a year to, once a quarter, look over my
credit card and bank statements with me and talk about how much I should be
contributing to which accounts and where I may be spending too much. (This is
preferable, for me, to a financial advisor because I like to pick my own
investments.)

------
ambicapter
> It is easy to become enmeshed in clients’ lives. I had one client who was
> young and impressionable and became very successful very quickly, and he was
> getting pulled in different directions by the people around him. He and I
> clicked and became very close. He bought a house and was away a lot, so I
> was at his house every single day, helping to oversee contractors, pick out
> windows, pick out drapes. I was a big part of his life. He died suddenly,
> and it crushed me. I felt like I had failed him, or could have done more.

Pure speculation, but Anton Yelchin?

~~~
dljsjr
Contextually I wouldn't think so, his death was an accident caused by what
ended up being deemed really poor design of the shift interface of his
vehicle; the guilt implication from the author sounds more like maybe drugs or
falling in with the wrong crowd or something.

------
motohagiography
So she's a family office for single people.
([https://en.wikipedia.org/wiki/Family_office](https://en.wikipedia.org/wiki/Family_office))

The Varian Rule, which is about how the future resembles how the rich live
today, the middle and poorer classes will have tomorrow, may apply here.
Multi-family offices for middle net worth individuals seem like a plausible
future.

I can't seem to convince my lawyer and accountant friends that this is a
viable service because (I think) they are basically not entrepreneurial, and
big firms don't offer it because they are already fighting and maintaining
position in the HNWI market.

A one-stop shop that handles everything from taxes, to parking tickets, legal
advice, to investments, insurance, and even medical, could be worth it for a
lot of people.

What makes it viable now is that families with the kind of money worth
professional management are still actually working for it each day, that is,
still making this kind of money on their labor instead of returns on capital,
so they have the income (albeit less in assets), but not the time to manage it
properly.

I would look forward to using such a service...one day. :)

~~~
Invictus0
Lots of these services are being created piecemeal. Professional management
works for these people because the clients are overwhelmed and don't know what
they're doing. They don't know how to budget X million dollars for 4 years.

Most average people think that they do know what they're doing. They have a
few hundred in the bank, they're paycheck is the same and comes every 2 weeks,
and they know the price and value of the things they need. They don't suffer
from the illusion that they can buy jetskis on a whim without bankrupting
themselves.

~~~
motohagiography
Arguably, that Lamborghini is even a thing suggests otherwise. There is tons
of new and younger money out there that could be deployed to build real
lasting foundations for families, at least enough for grandchildren to have
private school and college taken care of.

------
troydavis
Here’s a detailed view of the outcome she’s trying to prevent:
[https://www.rollingstone.com/movies/features/johnny-depp-
law...](https://www.rollingstone.com/movies/features/johnny-depp-lawsuit-
marriage-w521671)

> It's estimated that Depp has made $650 million on films that netted $3.6
> billion. Almost all of it is gone.

------
Theodores
Is Mick Jagger primarily a musician or a businessman?

Rock and roll has always been a business - 'the music business' \- and usually
those that succeed have an excellent business partner that looks after the
books. You would be surprised at the property and stock portfolios of the
truly successful 'musicians'. Even John Lennon was a 'businessman'. Although
he did put peace and love first and foremost he made sure those Russians paid
him in furs when he sang a few ditties there.

The same goes in the 'art business'. Is Damien Hirst an artist or a
businessman, first and foremost? Again, an excellent business partner takes
care of business for him whilst the army of interns/students/wannabees do the
hard work of assembling the dead animals into 'art' (for the status-anxiety
celebrities to buy).

So-called 'celebrities' have to be smart otherwise they end up with
accountants skimming off '5%' of their earnings.

------
tempestn
Reminded me immediately of Ballers, and now I see the third season was
released—thanks!

------
consumethreads
"Some times my clients call me and ask 'What is my social security number'"

hollywood idiots

these must be models and actors

