I’ve interviewed 300 celebrities about money – these are their ten biggest mistakes

[ad_1]

For the writer Frank Cottrell-Boyce, it was turning down the chance to write a lucrative Hollywood blockbuster. For the tennis star Tim Henman, it was buying Porsches. For the comedian Lucy Porter, it was failing to save into her pension. For pop star Kerry Katona, it was spending too much on drugs – and for the former politician and bestselling author Jeffrey Archer, it was sinking a cool £1million into a West End musical.

Over the past eight years, while writing the weekly Me and My Money column for the Mail, I have had the pleasure and the privilege of asking more than 300 celebrities: What is the biggest money mistake you have ever made?

In response, and I have learned a huge amount from their answers. Not least the fact that, no matter how talented they are in their day jobs as entertainers or entrepreneurs, athletes or actors, when it comes to personal finance decisions, famous people often make exactly the same kind of mistakes as the rest of us. They waste money, spend frivolously, invest badly, fail to save for their retirement, buy the wrong cars, make bad property decisions and get into debt. The big difference is, they usually have a lot more money to lose – and, often, people around them they cannot trust.

However, there are some mistakes that stood out. Here’s a rundown of the ten worst mistakes the celebrities featured in Me and My Money have ever made:

Mistake number one: ‘Being too kind and generous’ – John Caudwell

One of the most common mistakes celebrities make is deciding to listen to – and, in many cases, trust – their friends with their money.

It is a strategy that rarely works out well, as the British billionaire philanthropist and Phones4U founder John Caudwell found to his detriment.

Billionaire John Caudwell says he was too generous when it came to giving money to friends

Billionaire John Caudwell says he was too generous when it came to giving money to friends

‘Being too kind and generous,’ was how he described his biggest money mistake in 2019: ‘I’ve bailed friends out of trouble and ended up with that backfiring on me. In terms of my wealth, I’ve lost relatively small amounts, but certainly I’ve lost well over £1m to friends.’

He added:’They are not friends any more.’

Ex-JLS boy band member Oritsé Williams and Kiss rock legend Gene Simmons also revealed they have lost thousands to friends and acquaintances. ‘I never saw that $400,000 again,’ said Gene, in 2018.

Mistake number two: ‘Taking a friend’s advice on investments’ – Pat Cash

In 2019, the tennis star Pat Cash told Me and My Money that after he got paid £180,000 for winning Wimbledon, he lost an even bigger sum, thanks to a friend. ‘My friend created these phenomenal designs for high-speed boats that are put on the back of superyachts. But the company never managed to actually make any and I lost £200,000,’ he said.

Tennis ace Pat Cash rues the day he lost £200,000 on a pal's scheme to sell high-speed boats

Tennis ace Pat Cash rues the day he lost £200,000 on a pal’s scheme to sell high-speed boats

In the 1980s, Hi-de-Hi! star Linda Regan was similarly persuaded by her friend, fellow actress Liz Fraser, to invest £5,000 in sex shops. ‘Of course, the shares crashed and I lost all my money in a few months. That was probably the most stupid thing I ever did,’ she said.

Other celebrities who have lost money after taking recommendations on investments from friends include fellow tennis player Andrew Castle, the boxer Johnny Nelson, the comedian Arthur Smith, the TV presenter and cleaning guru Aggie Mackenzie and even the money expert Alvin Hall.

Mistake number three: ‘Marrying three times’- Howard Blake

‘I’ve made three major money mistakes in my life. My first wife, my second wife and my third wife,” said Howard Blake, the composer of The Snowman. ‘All of them cleaned me out.’

Howard Blake, composer for The Snowman, said his three money gaffes were his three wives

Howard Blake, composer for The Snowman, said his three money gaffes were his three wives

Anthea Turner, who has been divorced twice, also described it as ‘a very expensive process… However you look at it, you’re going to halve your wealth,’ she said: ‘If you can avoid it, do.’

British ski legend Eddie the Eagle revealed most of the money he had made from his movie had gone on his divorce. ‘It was horrendously expensive,’ he said.

Mistake number four: ‘Not making a multi-million-pound investment when I had the chance’ – Linda Plant

In the 1980s, the entrepreneur John Hargreaves asked the multi-millionaire businesswoman and Apprentice interviewer Linda Plant whether she would invest £250,000 in his new venture Matalan. ‘I had the money but I decided to invest it in my own business,’ said Linda. ‘I had dinner with John last year and he reminded me that my £250,000 would now be worth £250million, if I had invested it back then in Matalan. So that was a pretty big mistake.’

Businesswoman and Apprentice star Linda Plant turned down the chance to invest £250,000 in setting up Matalan - losing out on a £250million pay day

Businesswoman and Apprentice star Linda Plant turned down the chance to invest £250,000 in setting up Matalan – losing out on a £250million pay day

Similarly, the tennis star John Lloyd wishes he had invested at least £50,000 or £100,000 in David Lloyd Leisure when his brother first offered the chance to do so. ‘I would have made millions,’ he said.

Instead, he wrote a cheque for the relatively ‘small amount’ of £20,000. ‘Some mornings I wake up and bang my head against the wall. If I had just put another £20,000 in, I would be on a beach in Barbados right now.’

Mistake number five: ‘Making a stupid joke’ – Gerald Ratner

Gerald Ratner’s biggest mistake is so famous that similarly disastrous public gaffes are now known as ‘doing a Ratner’. In 1991, when he was chief executive of the jewellery chain Ratners, he joked in a speech at the Royal Albert Hall that some of its products were ‘total crap’.

An off-the-cuff quip about 'crap' jewellery cost Gerald Ratner his salary, job and mental health

An off-the-cuff quip about ‘crap’ jewellery cost Gerald Ratner his salary, job and mental health

‘That speech cost me my salary, my job, my mental health, everything,’ he told Me and My Money in 2021.

But he also claimed the best money decision he ever made was going back to the Royal Albert Hall in 2003 to give another speech. ‘Ironically, that was the start of my lucrative speaking career,’ he said.

Mistake number six: ‘Trusting property investment scammers’ – Ollie Phillips

The biggest money mistake the former England rugby union player Ollie Phillips ever made, when he was in his mid-20s, was to trust fraudsters who were running a property investment company.

In 2007, £6.5million of mortgage debts were fraudulently taken out in his name by the scammers. The fraud cast a cloud over Ollie’s life for more than a decade and prevented him from accessing any credit, he told Me and My Money.

£6.5million of mortgage debts were fraudulently taken out in Ollie Phillips' name by scammers

£6.5million of mortgage debts were fraudulently taken out in Ollie Phillips’ name by scammers

‘I was just one of the victims of what ended up being the largest ever housing scandal in the North East, involving 2,500 homes,’ he said.

Thanks in no small part to Ollie, who was the lead witness for the prosecution, the fraudsters were put in prison in October 2015 but it wasn’t until 2019 that all the mortgage lenders removed the black marks from Ollie’s credit record and accepted that he owed them nothing. ‘It was massively stressful,’ he said.

Mistake number seven: ‘Investing in film tax schemes’ – Matthew Hoggard

Along with other high-profile cricketers, more than a decade ago, Ashes champion Matthew Hoggard invested in what he thought was a legitimate ‘film tax scheme’ to fund British films. If a film produced a loss, which often happens, investors could offset this loss against any tax owed on their other income.

Matthew Hoggard lost a six-figure sum after being advised to invest in a film tax scheme

Matthew Hoggard lost a six-figure sum after being advised to invest in a film tax scheme

‘We got encouraged by our financial adviser to do it, which we did in good faith, to the point where we borrowed money to invest,’ he said in his 2021 Me and My Money interview. ‘Now, HMRC has turned around and said we need to pay back all the money we invested. I’d rather not say how much money I’ve been asked to repay but it is a six-figure sum… It has been quite a blow to my finances.’

The court later ruled that HMRC could collect all the tax owed.

Mistake number eight: ‘Buying something I didn’t understand’ – Deborah Meaden

Dragon’s Den investor and multi-millionaire Deborah Meaden learned an important lesson when she allowed herself to be talked into buying a structured bond she didn’t understand, before the credit crunch. ‘I got a flippant call in 2007 from someone sitting in an office saying they’d lost me half a million pounds, as if it was nothing. It taught me a lesson: If you don’t understand it, don’t invest in it. I also realised I care more about my money than anyone else.’

Similarly, racing driver Ben Collins, aka ‘The Stig’ from Top Gear, said his worst mistake was ‘buying shares with no idea what I was doing’.

He lost several thousand pounds when the fund he’d put money into went down by 97 per cent.

‘All you can do is laugh and learn. It is a painful memory,’ he told Me and My Money last year.

Mistake number nine: ‘Going rogue’ – Nick Leeson

Nick Leeson, the rogue trader who brought about the collapse of Barings Bank, now earns thousands of pounds an hour speaking about his biggest money mistake.

He told Me and My Money: ‘As money mistakes go, I don’t think anything can rival my answer. Between 1992 and 1995, I ran up £862million of losses from unauthorised trading for Barings Bank – which in today’s money is the equivalent of £1.7billion. It caused the collapse of the bank.’

Nick Leeson ran up £862million of losses from unauthorised trading for Barings Bank

Nick Leeson ran up £862million of losses from unauthorised trading for Barings Bank

After accepting the prison sentence the judge gave him ‘without question’ and going through ‘a period of remorse’, he now earns £5,000 every time he makes a 45-minute speech about what happened at Barings, its impact on him and risk culture. ‘I have had to move on from it because, as much as I’d want to, I can’t undo the past.’

He added: ’It’s still embarrassing though. There’s absolutely no doubt about that.’

Mistake number ten: ‘Investing millions in property – just before a crash’ – Jimmy Osmond

In 2015, the former child pop star Jimmy Osmond told Me and My Money his biggest mistake was buying property in Branson, Missouri, in 2006, just before the US property crash. ‘The market just died. I lost $2million,’ he said.

Musician Jimmy Osmond lost $2million investing in property just before a crash in the US

Musician Jimmy Osmond lost $2million investing in property just before a crash in the US

Other celebrities who lost money in property crashes include the actress Joanna Scanlan, who bought in Leicester in the late 80s and then saw the value of her £32,000 home fall by 62 per cent. After deciding to sell it for far less than she had paid for it,

‘I made a deal with the mortgage company that I would carry on paying the mortgage,’ she said. She ended up paying £50 a week for ten years, with no asset to show for it. ‘If I had just held onto it, it would be worth at least £200,000 now.’

The radio host and former pop star the Reverend Richard Coles also failed to make money from property in the 1980s, even though he purchased in leafy North London. ‘I bought a house in Islington for £160,000 at the peak of the market, sold it during the trough and broke even. Now, according to Rightmove, that house is worth about £1.5million,’ he said.

TV presenter Steph McGovern said her biggest money mistake was buying a three-bed terrace in Middlesbrough, just before the 2008 financial crisis. ‘It will take a long time for it to be worth what I paid for it – it is still down by about 15 per cent,’ she said in 2016. ‘I should not have listened to everyone who kept saying to me: ‘You can’t go wrong with property’. I rushed into it. I did not need to buy and, in hindsight, I wish I had not.’

Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.

[ad_2]

Source link

Scroll to Top