Rich, famous, #blessed. We tend to idolise celebrities, believing that their success makes them immune to life hardships and that their wealth and resources shield them from making money mistakes. “Our faves could neva“…but then they mess up.
Tshego Bokaba, who oversees Consumer Financial Education at the Momentum Group, says those who are famous are equally vulnerable to financial missteps.
“When you have vast financial resources, you’re not forced to budget or be thrifty with your spending. You might feel invincible – that nothing bad will ever happen to you. Maybe you’re surrounded by those who don’t have your best interests at heart. These people won’t encourage you to slow down on spending, or to tell you that something is not a good idea.”
And the reality is, if even those with the most still experience massive financial setbacks, no one is safe. “The good news is that there is a great deal we can learn from the mistakes of celebrities, which will help us when it comes to our money,” she says.
Bokaba weighs in five big money mistakes made by celebrities – and what we can learn from these.
1. Not having a will – Riky Rick
When South African performer Riky Rick passed away in 2022, he reportedly did so without leaving a Last Will & Testament. This means that – despite the award-winning rapper amassing significant wealth during his career thanks to endorsements, album sales, and royalties – his partner was forced to go to court in an attempt to be legally recognised as a beneficiary in his estate.
Says Bokaba: “Estate planning is critical, as it helps inform what will happen to your assets upon your death. While dying is never fun to think about, should you pass away without leaving a will, you will make the lives of your loved ones enormously difficult. Not only will they be grieving your loss but they will also be left with the legal nightmare of trying to untangle your affairs. Ensure that you have a legally-recognised (more on that later!) will in place. Death is inevitable for all of us and we need to plan for this reality.
2. Not ensuring your will is signed correctly – Joost van der Westhuizen
When Joost van der Westhuizen passed away in 2017 after a long battle with motor neuron disease, his will was initially rejected as it was not signed by the former rugby star, but by a representative. While Van der Westhuizen was unable to use his hands at the time and therefore couldn’t have signed the document, his case highlights the importance of ensuring your will is drawn up and signed in accordance with the law.
“Wills are subject to stringent legal requirements. To be recognised by law – and to avoid the possibility of it being contested after your death – it must be drawn up in writing, wet-signed by you, and co-signed by independent witnesses. If you’re unsure, consult a professional.”
3. Sharing your valuables online – Kim Kardashian
In 2016, Kim Kardashian hit ‘post’ on a selfie where she was adorned in expensive diamond jewellery, which was shared with her millions of Instagram followers. Little did she know that among this audience was a criminal syndicate, tracking her every move. From her social media activity, they were able to identify her location and determine that she had her valuables on her, and later robbed her in the hotel room.
Says Bokaba: “If you like to share posts that show expensive items or depict a lavish lifestyle on social media, you may attract people who don't have your best interests at heart. These people might try to rob, kidnap, or extort money from you. Avoid boasting on social media and ensure your privacy settings are as tight as possible, to avoid becoming a target.”
4. Not living within your means or being careful with credit – Lindsay Lohan
Despite earning millions of dollars throughout her career, Lohan has allegedly battled with her finances for years, due to her lavish spending and credit card debt that have taken their toll on her bank balance.
“Not budgeting and living outside your means is the quickest way to get trapped by debt. Too many people want to portray and enjoy a lifestyle they cannot afford to live. Resist outside pressure to spend when you know you cannot afford it, and stop looking for validation in material goods,” she advises.
5. Not understanding or adhering to your tax obligations – Bonang Matheba
In 2018, South African media mogul Bonang Matheba was accused by the South African Revenue Service (Sars) of failing to file her personal and company tax returns for several years – which reportedly came as a surprise to her. While Matheba maintained that she had full respect for the law and would comply with Sars, her case highlights the importance of understanding your tax obligations.
“Sars doesn’t recognise ‘I didn’t know’ as a defence for not adhering to your tax obligations, says Bokaba. “While you might find the world of tax complicated, there are professionals you can lean on to guide you, like a financial adviser.”
PERSONAL FINANCE