Famous and Breaking the Bank

Many aspiring artists have goals both professionally and personally that when met are often overshadowed with financial illiteracy. Fame and fortune have many costs but for the sake of this blog entry, let’s focus on the financial aspect. Too often we hear of musicians filing for bankruptcy due to various reasons. And in some cases musicians declare bankruptcy more than once. The most notable repeat offender, Toni Braxton, recently filed for bankruptcy a second time.

When Stanley Burrell, also known as MC Hammer, was signed to signed to Capitol Records in 1987 I am sure he was not thinking of the financial woes he would meet just years later. It was reported that Burrell spent an estimated $12 to $20 million on a custom-build mansion alone. Forbes estimated Burrell’s net worth at $33 million in 1991 but only 5 years later was claimed a debt of approximately $13 million. A lavish lifestyle with homes, furnishings, cars and an entourage without the proper financial aptitude is to blame for Burrell’s bankruptcy.

A record deal does not secure an artists’ wealth by no means. In fact, the artist only receives monies after the record label recoups the costs spent toward producing and marketing the recorded music. Whether it is a bad contract signed or the upkeep of celebrity image, poor financial management is to blame.

The Grammy Award winning Toni Braxton is known for a string of hits in the 90’s, her show in Las Vegas, Dancing With the Stars, and her financial failures. A repeat offender, Braxton declared bankruptcy first in 1998 and often the public rumored a bad recording contract was at fault. Later in 2010, Braxton filed for Chapter 7 bankruptcy protection. According to court documents, Braxton had debt ranging from $10 to $50 million while only holding $10 million of assets. Resilient, Toni Braxton continues to entertain. Braxton is currently working along side her family in Braxton Family Values airing on WE tv.

Big dreams and a record deal should not be synonymous with fame and fortune. Financial mismanagement will certainly have an artist dreaming of another chance at making it “big” someday.