The Lessons of Michael Jackson's Life and Untimely Death
publication date: Jun 26, 2009
From time to time, I am drawn to write about something happening in our broader culture even though the financial ties and issues may not be obvious to others.
In the first 24 hours since his passing, the media coverage of Michael Jackson's death has been overwhelming. I suspect that this is only the beginning. And, I suppose perhaps I am guilty as well of joining the fray but I see some powerful financial and related life lessons that may well be lost in the hype and glitter.
During his career, which began while he was still an elementary school aged boy, Jackson enjoyed amazing success. His albums sold hundreds of millions of copies. And yet, at the time of his passing, Jackson was reported to be about $400 million dollars in debt. A sold-out 50-date London concert extravaganza was scheduled in part to pay down his enormous debts (and there were hopes for a world tour to follow).
Here are the lessons I see from Jackson's life all of which come right out of my all-time best-selling book, Personal Finance for Dummies:
* Invest in yourself and others. Invest in your education, your health, and your relationships with family and friends. Having a lot of money isn't worth much if you don't have your health and people with whom to share your life.
Despite Jackson's enormous career and financial successes, his health, family relations and financial situation were largely a train wreck. Over the years, Jackson chose to spend a lot of time and money on plastic surgery which ultimately horribly altered his face. He had gone through treatment for drug addiction (and admitted in court appearances to his addiction to pain killers and stress relievers) but is reported to have had problems with this again and again. His addictions may well have caused his untimely death. He had children from two, short-term failed marriages and yet couldn't get his personal and emotional life back on track. He clearly had the resources and time to do something positive but wasn't able to break the downward slide that became his life.
Jackson clearly was an enormously gifted, talented and accomplished entertainer (see videos below). I enjoyed his music during high school and college. But, he also was the embodiment of just about everything that is wrong with Hollywood's self-absorbed culture that too many Americans worship rather than question and scorn.
* Take charge of your finances. Procrastinating is detrimental to your long-term financial health. Don't wait for a crisis or major life event to get your act together.
Jackson's financial problems mushroomed over time. Unfortunately, it seems, that there were plenty of people around him (and looking to profit off of him) but not enough people looking out for his best interests. In his later years, Jackson became a prisoner of his huge debts and his growing financial problems greatly added to his life's stress and problems.
* Live within your means. Regularly save and invest at least 5 to 10 percent of your income. Don't buy consumer items that lose value over time on credit. Use debt only to make investments in things that gain value, such as real estate, a business, or an education. Of course, you can get too much of a good thing so always examine your monthly spending and see how taking on more debt will impact your situation.
Like other entertainers and successful people I worked with when I did financial counseling, it's clear that Jackson wasn't focused on his personal finances. He clearly loved spending money - his shopping sprees are legendary and well documented. Despite the responsibilities of his own children, he never got on top of his finances.
"I think that Michael never had any concept of fiscal responsibility, or logical fiscal responsibility. He was an individual that had been overindulged by those that represented him or worked for him for all of his life. There was no planning in terms of allocations of how much he should spend. As a businessman, you can forecast your spending for the next six months to a year. For Michael, it was whatever he wanted at the time he wanted," said Alvin Malnik, a former financial adviser to Mr. Jackson, in a 2006 interview with the New York Times.
* Invest the majority of your long-term money in ownership vehicles that have appreciation potential, such as stocks, real estate, and your own business. If you need help making a major decision, hire conflict-free advisors who charge a fee for their time. Work in partnership with advisors - don't abdicate control.
According to the 2006 Times article, "The leading drain on Mr. Jackson's ample resources may have been monumentally unwise investments that apparently produced equally colossal losses. Mr. Malnik estimates that some of Mr. Jackson's advisers squandered $50 million on deals that never panned out - what he describes as amusement-park ideas and ‘bizarre, global kinds of computerized Marvel comic-book characters bigger than life.' Mr. Malnik said that he had loaned Mr. Jackson $7 million, part of which was used to settle various lawsuits related to deals gone awry."