Celebrity Cash: Financial lessons from the lives of an Oscar winner and a music mogul

Michelle Singletary
Thursday, January 28, 2010; 10:55 AM

It's been a while since we've discussed how the seemingly rich handle their dough.

Nicolas Cage is the latest example of the notion that it's not what you make that matters, but how you make do with what you have. (That's a saying from my grandmother, Big Mama, who never made more than $13,000 a year, yet knew how to manage her money.)

The Oscar-winning actor's Las Vegas mansion was recently foreclosed on and sold for nearly $5 million, reports the Associated Press. Cage has said his former business manager gave him bad advice and that allegedly led to his financial mess.

So, um, did the man advise him not to pay his mortgage? Did he have his mortgage payments invested? I understand some celebrities are busy acting or singing or playing ball, but just like the rest of us working folks, they have to take care of their own business. Even when you hire someone to help you with your money, you have to do your homework. You have to check up on what the adviser is doing.

Let that be a lesson to you. Watch your money!

Another big-spending celebrity

Do you think it's possible to raise a level-headed, unspoiled child when you give him a car worth more than what the average American pays for his or her home? (The average home price, by the way, was $290,600 in Dec. 2009, according to the U.S. Census Bureau.)

In her Celebritology blog, the Post's Liz Kelly reports that Sean "Diddy" Combs gave his 16-year-old son a $360,000 Maybach, a luxury sedan. Oh, and the kid doesn't even have a driver's license.

I have never heard of that model of car and even if I had it like that, I wouldn't give it like that. Would you? Let's talk celebrity cash. If you were loaded like Diddy, would you give your child a sweet sixteen party and car collectively worth what several households make in one year? Send your comments to colorofmoney@washpost.com. Put "Celebrity Cash" in the subject line.

Leftover Chat Questions

Q: I've completed the budget template from "The Power to Prosper" and realize that I'm spending over my means by about $200 a month. I don't use my charge card. What am I doing wrong? Where would you suggest the first place for me to cut back should be?

A: Without looking at your budget and talking to you, I can't say what you should cut out of your budget. That's a very personal thing. It all depends on what you value. But good for you to complete a budget and realize you are living above your means. That's one of the first steps toward getting your financial life together.

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