We have all seen it. The rich and famous who boast luxury cars, and lavish homes, then, in what seems like the next day, they are M.C. Hammer broke.
How does one go through so much money, so quickly?
Tom Sirois of Berkshire Hills Financial will analyze their spending habits so you don’t make the same mistakes they did when you live the lifestyle of the rich and famous.
- Overestimating the market values of real estate.
The housing market is often not what it seems, and when the next big artist purchases 3 or more homes, overextending their credit or bank account, the market can fluctuate, further hurting the finances of the owner.
- Buying depreciating assets.
Boats, planes, cars. All of these items decrease in value every year, and even faster with use. You may as well be throwing nominal amounts of money down the toilet.
- Blindly investing in new technology.
Wanting to be the next Chris Sacca, artists and actors alike are guilty of blindly investing in quick-to-fizzle-out technology trends. When is the first or last time that you have used Google Glass?
- Taking investment advice from friends.
It’s kind of like taking dating advice from friends. Don’t do it.
- Investing in restaurants.
According to the National Restaurant Association, it’s one of the most risky investments. The United States sees around 60,000 new restaurants each year, with 50,000 closures. That’s around an 83 percent failure rate if you are keeping up.
- Selling stocks too quickly when they drop.
Just wait it out, markets fluctuate and next year you more often that not would see an exponential increase on your investment.
- Overestimating future earnings.
You have a prime of your life for a reason. Put some money back to rely on it after your fame and fortune fizzles out like a distant supernova.