The news has been filled lately with reality show stars, athletes, and other celebrities plagued with huge financial issues. There is either a problem with taxes, outstanding debts and liens, and/or bad credit. We have all wondered how they can receive such large amounts of money and still have these issues. The problem is these individuals have little or no money management skills and they trust individuals who lack the knowledge and skill sets to properly manage their assets and secure a sound financial future.
Below are a few suggestions to help reality show stars avoid money pitfalls:
Hire an accountant. Your childhood friend or your business manager is not qualified to handle your financial obligations. Make sure the accountant is not just involved in data entry, but someone who can truly assist you in directing your finances. A good accountant will not allow your finances to suffer and dwindle because of tax liens, outstanding debts, or bad credit.
Pay your financial and tax obligations. Know your financial obligations and make sure they are paid monthly, quarterly, or annually.
Budget your money. The entertainment business is extremely volatile, therefore, budget and invest to ensure you have money in the long run.
Review your finances on a monthly basis. Have prepared financial statements presented for your review. Ask questions about the items you do not understand.
Have a third party review your financials on an annual basis. You are a company, so do as companies do and have an independent party review your books for accuracy.
Explore your options and identify financial experts outside of the entertainment industry. Believe it or not they all have the same agenda — to make money off of you, not to generate income for you.
Develop additional streams of income. Nothing lasts forever. Develop business ventures that will grow the money you are making and possibly offset potential business losses.
It is important to remember that there are immediate financial obligations associated with being paid large sums of money. Being smart about your money early will allow your assets to work for you in the future.
Sherry Bryant is the principal consultant of Sherry Bryant & Associates, a full-service financial services and wealth management firm. You can visit the firm online at www.SherryBryantAssoc.com.
